Sugar prices spike up to Rs 340 per quintal as the center increases fair prices

The government’s announcement on February 22 that the fair and remunerative price (FRP) of sugarcane will increase to Rs 340 a quintal from Rs 315 for the 2024–25 season caused sugar stockpiles to turn sour and trade negatively. This pricing is around 8% more than what it will be for the sugar season of 2023–2024.

Sugar mills will pay FRP of sugarcane at Rs 340/quintal at recovery of 10.25 percent with this sanction. Farmers will receive an extra Rs 3.32 for every 0.1 percent gain in recovery, while the same amount would be withheld for every 0.1 percent decrease in recovery, according to a statement from the Center.

Because of the lower rainfall this year, which has resulted in fewer sugarcane plantations, the overall production of sugar is predicted to be much lower than it was last year. AISTA projects that this year’s sugar production would be 316 lakh tonnes, down from 329 lakh tonnes in 2022–2023.

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