Rise in retail sugar prices is "inevitable" due to 11 per cent hike in fair and remunerative price of sugarcane announced by the government for the 2017-18 season, industry body NFCSF said today.
Sugar is retailing at Rs 40-45 per kg, showed official data.
Yesterday, the Cabinet Committee on Economic Affairs (CCEA) approved Rs 255 per quintal fair and remunerative price (FRP) of sugarcane for 2017-18 season (October-September), up Rs 25 from the current Rs 230.
The National Federation of Cooperative Sugar Factories (NFCSF), which represents cooperative sugar mills, welcomed the government's decision to hike sugarcane FRP for the next season, but alluded to its impact on retail sugar prices in coming days.
"This rise in raw material (prices) is bound to push up the cost of production of sugar and thereby retail price of sugar may show increase in coming days," NFCSF MD Prakash Naiknavare said in a statement.
But this is inevitable because the farmers must get the remunerative price commensurate with their expenses in growing sugarcane, he said, adding that "this alone will encourage them to continue growing sugarcane which will help the industry sustain".
Naiknavare further said states like Maharashtra, Karnataka and Gujarat have already appointed cane price fixation boards in line with the Rangarajan Committee recommendation.
In light of these developments, the selling price of not only sugar, but its byproducts namely bagasse, press-mud and value-added products like ethanol, and co-generation need to be at a reasonable high level, he noted.
"This inevitable fact also needs to be recognised, understood and appreciated by all the stakeholders... And the government for ensuring a healthy sugar sector," he noted.
Sugar prices have increased this year due to estimated fall in production of the sweetener at about 20 million tonnes in 2016-17 season, from 25 million tonnes in the previous year.
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