Sugar Stocks Fall as Government Announces Hike in Sugarcane Fair Price

The government announced an increase in the fair and remunerative price (FRP) of sugarcane for the 2024-25 season.

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This caused sugar stocks to drop as it raised concerns about the industry’s profitability. The new FRP, which will be applicable from October 1, 2024, will be set at Rs 340 per quintal from Rs 315.

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The government made the decision to increase the FRP to improve the sugarcane farmers’ income. However, this decision may impact sugar mills’ profitability as they will have to pay more for sugarcane.

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The government said in a statement, “With this approval, sugar mills will pay FRP of sugarcane at Rs 340/quintal at a recovery of 10.25 percent.

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The Sugarcane (Control) Order of 1966 requires sugarcane farmers to receive FRP instead of the minimum support price for other crops.

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Experts predict that lower rainfall may decrease the overall sugar production in 2023-24 as it has impacted sugarcane plantation.

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The FRP hike may cause sugar prices to increase in the coming months. The industry is urging the government to take measures to mitigate the impact on sugar mills and ensure a stable sugar supply in the country.

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This research serves educational and informational purposes only. It is not to be considered as a portfolio management service, basket recommendation, or investment advisory.
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