India considers raising minimum selling price of sugar to boost local production

INDIA – India is considering raising the minimum selling price (MSP) of sugar and reviewing its sugar export policy as the country seeks to boost local supplies.  

Food and Consumer Affairs Minister Pralhad Joshi revealed that a committee of secretaries is deliberating on a proposal to increase the sugar MSP, which has remained at Rs 31(US$0.37) per kilogram since February 2018.  

The decision comes in response to growing demands from the sugar industry, which is pushing for the MSP to be increased to at least Rs 39 (US$0.46) per kilogram. 

The Indian Sugar Manufacturers Association (ISMA) has expressed concerns over the stagnant sugar prices, urging the government to raise the MSP and allow the export of 2 million tonnes of sugar.  

ISMA President M. Prabhakar Rao emphasized the need for exports given the good harvest expected for the 2024-2025 season. 

India is currently facing a potential drop in sugar production for the 2024-2025 season, with output expected to fall to 32 million metric tonnes, down from this year’s 34 million tonnes.  

The decline is largely attributed to the adverse impact of patchy rains in key sugar-producing states, Maharashtra and Karnataka.  

Despite the anticipated drop, the association estimates a production of 333 lakh tonnes for the upcoming season, down from an earlier projection of 340 lakh tonnes. 

India’s sugar export ban, initially implemented in 2023 due to lower cane output, is also under review.  

The government is expected to take a decision on whether to lift the ban after assessing next year’s sugar production and availability.  

Association Vice President Gautam Goel argued that exports should be allowed immediately to capitalize on the recent increase in global sugar prices, driven by likely production declines in Brazil. 

India, the world’s largest sugar consumer and second-largest producer, holds significant influence over global sugar markets.  

In 2023, the country was appointed as the Chair of the International Sugar Organisation (ISO) for 2024, marking its pivotal role in the global sugar sector. 

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