The government has decided to increase the minimum price sugar mills pay to cane growers by Rs 20 per quintal, with the new price being Rs 275 per quintal for the next marketing year starting October. The decision to increase the Fair and Remunerative Price (FRP) of sugarcane for the 2018-19 marketing year was taken by the Cabinet Committee on Economic Affairs (CCEA).
The FRP, which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season. At present, the FRP price is linked to a basic recovery rate of 9.5%, subject to a premium of Rs 2.68 per quintal for every 0.1% increase in recovery rate.
The increase is also likely to result in states like Uttar Pradesh, which do not follow the centrally-announced FRP, raising their own advisory prices. Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called ‘state advisory prices’ (SAPs), which are usually higher than the Centre’s FRP.