The Narendra Modi government has hiked the Centre’s FRP (fair and remunerative price) for sugarcane payable by mills in the ensuing 2017-18 crushing season to Rs 255 per quintal. This price, linked to a basic sugar recovery rate of
9.5 per cent, marks a 10.9 per cent increase over the FRP of the last two seasons, which had been frozen at Rs 230 per quintal and raised marginally by Rs 10/quintal in 2014-15.
The FRP has relevance in states such as Maharashtra, where average sugar recovery is high at around 11.3 per cent. A base FRP of Rs 255 for 11.3 per cent recovery would, in this case, translate into a cane price of 303 per quintal at e mill-gate.
On the other hand, in Uttar Pradesh, the average recovery is only 10.6 per cent. The base FRP of 255 based on the Centre’s formula would, then, work out to Rs 284.5 per quintal. This is way below the UP government’s state advised price (SAP) — which mills in the state are bound to pay — of Rs 305 per quintal for normal cane and Rs 315 per quintal for early-maturing varieties in 2016-17 (the sugar season extends from October to September). It remains to be seen what SAP the new Yogi Adityanath-led BJP administration will announce for the coming season beginning October.
The decision to fix the new FRP was taken at a meeting of the Cabinet Committee on Economic Affairs on Wednesday. A statement released after the meeting said that the government had addressed the current season’s production shortfall by allowing import of raw sugar at zero duty. However, such imports were limited to only 5 lakh tonnes. Further, there were zonal restrictions imposed on such imports, with this sugar being made available only in deficient areas in order to “safeguard the interest of cane farmers”.