Sugar prices below production cost, scope for hike: ISMA chief

ISMA DG Deepak Ballani highlighted that ex-mill sugar prices are below production costs, necessitating a hike for mills' viability and farmer payments. He also called for revising ethanol procurement prices due to increased feedstock costs.

Sugar Prices Below Production Cost, Hike Needed: ISMA

There is scope for improvement in sugar realisations as current ex-mill sugar prices in major producing states remain below production costs, Deepak Ballani, Director General of the Indian Sugar & Bio-energy Manufacturers Association (ISMA), said on Wednesday.

Speaking to ANI, Ballani said ex-mill sugar prices in Uttar Pradesh are around Rs 41-41.50 per kg, while prices in Maharashtra are close to Rs 39 per kg, against an estimated production cost of about Rs 42 per kg. "We still have scope of increasing the sugar price because unless the mill realises the right value of sugar, it will be difficult to pay farmers on time," Ballani said. He noted that sugar prices have remained largely stable despite restrictions on exports and added that sugar inflation over the past decade has been among the lowest compared to other commodities.

According to Ballani, retail sugar prices are currently hovering around Rs 46.50-47 per kg. He added that whenever the Fair and Remunerative Price (FRP) of sugarcane is increased, there should be a corresponding rise in sugar realisations to maintain the financial viability of mills and ensure timely payments to farmers.

No Concerns Over Sugar Availability

On sugar availability, he said ISMA expects closing stocks of around 42-43 lakh tonnes at the end of the 2025-26 sugar season, compared to an opening stock of about 50 lakh tonnes in the previous season. He said the industry does not foresee any major concerns over sugar availability as fresh supplies are expected to enter the market from the third week of October.

Ethanol Price Revision Sought

On ethanol, Ballani said the industry is seeking a revision in procurement prices as production costs have increased significantly over the past few years. "Since ethanol prices were last revised, the FRP alone has increased by nearly 20 per cent, raising feedstock costs substantially," he said.

He added that inflation, higher conversion costs and increased financing expenses have further raised the cost of ethanol production, making a price revision necessary for the sustainability of mills and distilleries. Calling it one of the sector's key pending policy issues, Ballani said the industry has urged the government to align ethanol procurement prices with rising sugarcane costs.

Flex-Fuel Vehicles and Ethanol Adoption

He welcomed Maruti Suzuki's launch of India's first flex-fuel vehicle, saying it would help boost ethanol consumption, reduce dependence on imported crude oil and strengthen energy security.

Ballani also advocated the adoption of ethanol-based cooking stoves to reduce LPG imports, adding that ISMA has submitted proposals to the government and sought regulatory approvals to encourage investment in the segment.

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)