Union Government increases FRP for sugarcane by ₹15 per quintal; Rs 305 per quintal for 2022-23 season

New Delhi: The government have increased the minimum price that mills have to pay to sugarcane growers by Rs 15 to Rs 305 per quintal for 2022-23 marketing year starting October.

The Cabinet Committee on Economic Affairs (CCEA) have approved the Fair and Remunerative Price (FRP) of sugarcane for sugar marketing year 2022-23 (October-September) at Rs 305 per quintal for a basic recovery rate of 10.25 per cent.

The decision will benefit around 5 crore sugarcane farmers and their dependents, as well as about 5 lakh workers employed in sugar mills and related ancillary activities.

A premium of Rs 3.05 per quintal will be provided for each 0.1 per cent increase in recovery over and above 10.25 per cent, while there will be a reduction in FRP by Rs 3.05 per quintal for every 0.1 per cent decrease in recovery, sources said.

However, there would not be any deduction in case of sugar mills where recovery is below 9.5 per cent. Such farmers are likely to get Rs 282.125 per quintal for sugarcane in 2022-23 as against Rs 275.50 per quintal in current sugar season 2021-22, they added.

The cost of production of sugarcane for 2022-23 marketing year is Rs 162 per quintal.

Recently, ISMA said that the India's sugar production could fall slightly to 355 lakh tonnes in the 2022-23 marketing year starting October, due to diversion of sugarcane towards ethanol manufacturing.

As per the ISMA, the sugar production in 2022-23 is estimated at 355 lakh tonnes as against 360 lakh tonnes in the current marketing year ending September.

Before considering diversion towards ethanol, net sugar production is estimated to be higher at 399.97 lakh tonnes in 2022-23 as against 394 lakh tonnes in the current 2021-22 marketing year.

ISMA estimates that the diversion of cane juice and B-molasses to ethanol will reduce sugar production by about 45 lakh tonnes in the next marketing year. In the current 2021-22 marketing year, about 34 lakh tonnes diversion has been estimated.

The annual domestic demand is seen at around 275 lakh tonnes in the 2022-23, which will leave a surplus of about 80 lakh tonnes for exports.

In May, the Centre capped sugar exports at 10 million tonnes in the current 2021-22 marketing year to maintain the domestic availability and price stability.