Government hikes sugarcane support price to Rs107.76 per quintal
25 June 2009
The cabinet committee on economic affairs has approved an increase of around 32 per cent in the statutory minimum price (SMP) of sugarcane for 2009-2010 sugar season at Rs107.76 per quintal from the current Rs81.18 per quintal.
The SMP or the minimum price that mills must pay to farmers for sugarcane is applicable to sugarcane where the recovery rate is higher than 9.5 per cent, with a premium of Rs1.13 for every 0.1 percentage point increase in recovery.
The SMP of sugarcane for 2008-2009 sugar season of Rs81.18 per quintal was linked to a basic recovery of 9 per cent subject to a premium of Rs0.90 for every 0.1 per cent increase in the recovery above that level.
India, the world's biggest consumer and the second-biggest producer of sugar, is expected to end the current season with a buffer stock deficit.
The decision to kike the MSP of sugarcane is aimed at encouraging farmers to plant sugarcane instead of other crops.