sugar mills: Improve in FRP to reasonable profitability of sugar mills from Maharashtra, Karnataka, says ICRA

The rise of FRP from Rs. 315 per quintal to Rs. 340 per quintal will assist the 5 crore cane farmers will result in an extra fee of greater than Rs. 10,000 crores to the cane farmers by way of the sugar business.

Trade physique Indian Sugar Mills Affiliation (ISMA) has mentioned that the rise in FRP will assist farmers. “The rise will assist the farmers to satisfy the growing expenditure for rising cane and may make sugar cane retain its competitiveness towards different crops like rice, maize and so on. This may result in an extra Rs. 10,000 crore plus fee to the cane farmers by way of the sugar business.”

ISMA has additionally demanded commensurate will increase in costs of sugar and ethanol. “The Fee of Agricultural and Prices Costs (CACP) can also advocate the MSP of sugar which as per business estimates can be at about Rs. 3,900 per quintal based mostly on the FRP of Rs. 340 per quintal of sugarcane. Equally, the costs of ethanol shall even be revised based mostly on the upper FRP and elevated prices to make it viable for the sugar business,” mentioned ISMA.

If the sugar costs rule within the vary of Rs 36/kg, then the sector analysts anticipate discount within the earnings of the sugar mills. Girishkumar Kadam, Senior Vice President & Group Head, ICRA mentioned, “With the latest resolution of the federal government relating to enhance in FRP of sugarcane for Sugar Yr 2025 (October 2024-September 2025), the price of sugar manufacturing is prone to enhance by about Rs.2.4/kg for the states following FRP comparable to Maharashtra and Karnataka. ICRA expects the profitability of sugar mills in Maharashtra and Karnataka to reasonable by 80-100 bps given the home sugar costs stay at Rs. 36-36.5/kg.”

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