India sugar ex-mill prices fall about 30%, mills press for MSP hike to Rs45/kg
Ex-mill sugar prices in India have dropped roughly 30% from their August peak to about Rs4,450 per quintal, while retail prices are down 11–12% to around Rs57.50 per kilogram. Mill associations ISMA and NFCSF have renewed their demand for the minimum sale price to be raised to Rs45 per kilogram, as NITI Aayog recommends an immediate increase to Rs40 from the current Rs31.
Sugar prices in India have fallen sharply across the value chain in September, with ex-mill prices down about 30% from their recent peak and retail prices 11–12% lower, according to Business Standard. Against that backdrop, mills have renewed their call for the central government to raise the minimum sale price (MSP) of sugar to Rs45 per kilogram.
The decline follows tighter government supervision of the market. With ample stocks in the system and stricter rules on mill sales, prices are expected to stay contained through the festive season. The new cane crushing season is also about to begin, which is expected to add further downward pressure on quotations.
Ex-mill prices retreat from the August peak
In a joint statement, the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories (NFCSF) said prices rose modestly between 17 and 31 August. During that window mills sold only 722,000 tonnes of sugar, at an average ex-mill price of Rs4,996.98 per quintal, or roughly Rs50 per kilogram. That average has since fallen to about Rs4,450 per quintal, which the associations describe as around 30% below the peak.
The two bodies argue the rally was both short-lived and narrow. The volume sold at the highest prices amounted to less than 2.5% of India's annual domestic consumption of about 28.5 million tonnes. The increase lasted only seven to eight days, and according to the associations neither cane growers nor mills captured the gain. More than 97.5% of the country's annual requirement was sold at normal or lower prices, which the industry cites as evidence that it should not be held responsible for the spike.
Retail prices down 11–12%
Retail sugar reached Rs65 per kilogram last month before falling back. The associations put the nationwide retail average at roughly Rs57.50 per kilogram after a decline of about 11–12%. State-level retail averages reported by the industry bodies are as follows.
- Uttar Pradesh: Rs55.09 per kilogram
- Delhi: Rs55 per kilogram
- Maharashtra: Rs56.74 per kilogram
- Karnataka: Rs56.19 per kilogram
- Tamil Nadu: Rs57.45 per kilogram
A decade without an MSP revision
NFCSF president Harshvardhan Patil said the sugar industry is under financial strain because the MSP has not been raised for close to a decade, and repeated the federation's demand that it be set at Rs45 per kilogram. He added that the brief price upturn brought no benefit to the industry and that a durable, stable pricing mechanism for sugar is needed.
Alongside the MSP demand, the federation has asked for financial support for cooperative sugar mills, restructuring of their debt, and the launch of a new soft loan scheme.
NITI Aayog proposes Rs40 per kilogram
NITI Aayog has sent a policy recommendation to the central government covering the economic future of the sugar industry and the country's 50 million cane farmers. In its latest report submitted to the Ministry of Food and Public Distribution, the think tank's agriculture task force proposed raising the minimum sale price of sugar immediately from the current Rs31 per kilogram to Rs40 per kilogram.
Mills and farmer organisations point to the widening gap between input and output prices. The government has raised the fair and remunerative price (FRP) for cane from Rs275 to Rs365 per quintal since 2019, an increase of 33%, while the minimum sale price for sugar has been held at its 2019 level of Rs31 per kilogram.
