The ISMA urged the CACP to revise the minimum selling price for sugar and ethanol procurement

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) recently appealed to the government to revise the minimum selling price (MSP) of sugar and ethanol procurement prices, aligning them with the fair and remunerative price (FRP) of sugarcane. The association pointed out that ethanol prices derived from sugarcane juice and B-heavy molasses (BHM) had remained unchanged since 2022.

While the price of ethanol from C-heavy molasses had been raised to Rs 57.97 per litre for the 2024-25 ethanol supply year (ESY), up from Rs 56.58 per litre the previous year, the rates for ethanol from B-heavy molasses and sugarcane juice remained stagnant at Rs 60.73 per litre and Rs 65.61 per litre, respectively, since November 2022.

ISMA approached the Commission for Agricultural Costs and Prices (CACP), which operates under the Ministry of Agriculture and Farmers’ Welfare, urging a reassessment. The CACP recommends the FRP for sugarcane, which is then finalized by the Cabinet Committee on Economic Affairs (CCEA).

In a letter to the CACP chairman, ISMA Director General Deepak Ballani emphasized that since sugarcane costs were a major input for the sugar industry, it was essential to synchronize the FRP with sugar MSP and ethanol procurement prices. The government currently sets ethanol prices in three categories: ethanol from C-heavy molasses, B-heavy molasses, and sugarcane juice/sugar/sugar syrup.

ISMA data revealed that ethanol prices from C-heavy molasses had risen from Rs 49.41 per litre in 2022-23 to Rs 57.97 per litre in 2024-25. Similarly, ethanol produced from damaged foodgrains saw an increase from Rs 55.54 per litre to Rs 64 per litre, while maize-based ethanol prices rose from Rs 56.35 per litre to Rs 71.86 per litre. However, ethanol derived from surplus rice remained unchanged at Rs 58.50 per litre since 2022-23.

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Ballani noted that the FRP for sugarcane had been revised twice since 2022-23, increasing by Rs 350 per tonne to reach Rs 3,400 per tonne for the 2024-25 season—an 11.5% rise. He argued that ethanol procurement prices should be adjusted proportionately to ensure fair compensation for the sugar diverted to ethanol production. Without such revisions, he warned, ethanol production could become financially unsustainable, disrupting industry stability and delaying payments to farmers.