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CCEA fixes MSP of white, refined sugar at Rs 29 per kg

08 Jun 2018 Evaluate

The Cabinet Committee on Economic Affairs (CCEA) has fixed the minimum selling price (MSP) of white/refined sugar at Rs 29 per kg. It also imposed stock holding limits on sugar mills for the current sugar season (up to September 2018) as a safeguard mechanism to keep retail sugar prices range bound. These decisions are aimed at helping cash-starved industry to clear cane arrears which have crossed Rs 22,000 crore.

No producer of sugar shall sell or agree to see or otherwise dispose of or deliver or agree to deliver white or refined sugar in the domestic market or remove white or refined sugar from the godowns of the factory in which it is produced for sale in the domestic market at a rate below Rs 29 per kg till further orders. The ministry also issued an order directing the quantity of white/refined sugar stock that every producer of sugar shall hold at the end of June 2018.

The food ministry notified the Sugar Price (Control) Order, 2018 to empower itself to fix the MSP of the sweetener. While fixing the price, the Centre will take into consideration the Fair and Remunerative Price (FRP) of sugarcane, conversion cost to produce sugar and realisation of profit from bye-products. This order empowers the government to inspect records, enter and conduct searches in factories, and seizure of stocks.

The Centre has come out with a bailout package of Rs 8,500 crore to boost farmers’ incomes by creating a buffer stock for sugar, enhancing ethanol production capacity and fixing a minimum selling price to cut mill losses. The Cabinet approved Rs 4,440 crore soft loan for building ethanol production capacity to absorb the cane and a buffer stock of 3 million tonnes, besides for the first time fixing Rs 29 per kg as the minimum price below which mills cannot sell sweetener. 

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