India to decide sugar selling price and ethanol consumption soon

India will take a decision in the coming days on the sugar industry’s appeal to raise the minimum selling price (MSP), a senior government official said on Saturday, adding that the ethanol policy would be decided before the start of the next season. India, the world’s largest sugar consumer, has imposed restrictions on the use of sugar in ethanol production in the 2023/24 financial year that ends on September 30, and also banned exports to keep domestic prices in check.

“We are discussing the MSP (proposal). We hope to take a decision in the coming days,” Food Secretary Sanjeev Chopra told reporters at a conference.

The sugar processing industry is demanding an increase in the minimum selling price, saying the government has raised the mandatory purchase price of sugarcane in recent years, while the minimum price has not changed since 2019.

Industry officials say the higher minimum wage will enable them to make timely payments to millions of sugarcane farmers for the upcoming season starting October 1.

Chopra said production prospects for the next season had improved thanks to good monsoon rains and increased cane area, which allowed the government to formulate policy for the coming year. The area under cane rose to 5.77 million hectares (14.3 million acres) from 5.7 million hectares (14.1 million acres) a year ago, agriculture ministry data showed. “We should have very healthy stocks at the end of the current sugar season, which would allow us to better plan for its diversion next year,” Chopra said, referring to the use of sugar in ethanol production.

India is expected to start the new marketing year with stocks of 8 million to 8.5 million metric tonnes, he added.

(Reporting by Rajendra Jadhav; Editing by Helen Popper)