Sugar selling below cost of production; hike minimum selling price: AISTA to govt.

‘Fair price of sugarcane has been revised consistently since 2019 while that for sugar has remained stagnant in the same period’

April 12, 2023 06:49 pm | Updated 08:45 pm IST - New Delhi

Photo used for reprsentational purposes only.

Photo used for reprsentational purposes only.

Sugar trade body AISTA on Wednesday demanded that the government should increase the minimum selling price of sugar as the sweetener is being sold at prices lower than the cost of production in the country.

The minimum selling price of sugar has been kept unchanged at ₹3,100 per quintal since 2019 even though the fair and remunerative price (FRP) of sugarcane has been increased every year.

The All India Sugar Trade Association (AISTA) has made a representation in this regard to Food Secretary Sanjeev Chopra.

"Sugar was sold as low as ₹3,100-3,200 per quintal in Maharasthra and Karnataka during November-March period of the current 2022-23 season, which is 10% lower than that of cost of production," AISTA Chairman Praful Vithalani said.

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The minimum selling price should be more than the cost of production, which ranges from ₹3,400 to ₹3,600 per quintal, he said.

In the representation, AISTA said the government had increased the FRP of sugarcane in the last four sugar seasons (October-September), but there has been no corresponding increase in the minimum selling price.

"Therefore, the government may consider increasing the minimum selling price of sugar, which will also encourage farmers to increase sugarcane plantation in the country," it said.

That apart, the trade body has urged the government to extend the benefit of RODTEP (Remission of Duties, Taxes On Export Products) scheme to sugar.

Under RODTEP scheme, duties and taxes are remitted at a fixed rate on export products under 'free category' only. Since sugar was kept under the 'restricted' category, traders are not getting the benefit at present.

AISTA said the benefits should be extended as sugar was placed under 'restricted category' not because of the shortage but for regulating exports. "Due to technical reasons, the RODTEP benefits to sugar should not be withdrawn," it added.

India is the second largest sugar producer after Brazil in the world. The government has allowed export of 6 million tonnes in the current 2022-23 season.

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