Food Secretary Sanjeev Chopra has said that the government is actively considering a revision in the minimum support price (MSP) for sugar and other relief measures as the industry warns of a sharp rise in cane arrears from mid-January. The Indian Sugar & Bio-energy Manufacturers Association (ISMA) said cane arrears are building up and stood at Rs 2,000 crore in Maharashtra as on November 30. Mills are facing a liquidity crisis owing to surplus stocks, high cost of production, lower ethanol allocation, fall in domestic prices and a global glut.
The government is exploring all options -- revision in MSP, allowing more exports beyond the current level of 1.5 million tonnes, and higher ethanol allocation. The sugar MSP has remained changed at Rs 31 per kg since February 2019. ISMA has demanded revising it to Rs 41.66 per kg. The country's sugar production is pegged at 34.3 million tonnes for the 2025-26 season (October-September) on higher cane production. Since ethanol allocation from sugarcane-based or sugar-based molasses has been only 28 per cent, about 3.4 million tonnes of sugar will be diverted for ethanol.
The government has already allowed 1.5 million tonnes of exports to help the industry. Sanjeev Chopra said that while export parity is currently an issue, it is expected to improve after Brazil's sugar season ends next month, allowing mills to dispose of stocks profitably. The secretary also highlighted sweet sorghum as a new generation bioenergy crop that can be grown in rain-fed conditions without much water. The yield is around 45-50 tonnes per acre with ethanol production of roughly 43-50 litres per tonnes.
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