Sugar SMP likely to be higher at Rs 107/qtl

The Prime Minister’s Economic Advisory Council (PMEAC) is believed to have suggested sugarcane support price to be fixed at Rs 107 a quintal for 2009-10 season, same as proposed by the food ministry.

The food ministry will move the Cabinet with the PMEAC recommendation soon after the new government is formed, a senior government official said on Wednesday.

The ministry had recommended the Statutory Minimum Price (SMP) be increased to Rs 107.76 a quintal for the next season, beginning October, from Rs 81.18 a quintal in 2008-09 season (October to September).

On February 23, the Cabinet had referred the sugarcane SMP matter to PMEAC after some ministers raised their concerns over the proposed hike. Sources had earlier said that the Prime Minister’s Office was not in favour of the proposal to raise SMP by 33 per cent, arguing that prices of most of the inputs have not increased.

That apart, PMO had pointed out that if the SMP is hiked at this juncture, wholesale prices of sugar would increase further, forcing the government to make provisions for subsidising imports.

The Commission for Agricultural Costs and Prices, which recommends support price for agricultural crops, had suggested SMP to be raised to Rs 125 a quintal.

The Indian Sugar Mills Association (ISMA) has urged the government to notify the SMP for the 2009-10 season soon due to apprehensions that farmers may otherwise shift to other crops, affecting the output of the sweetener.

Due to shortage of sugarcane, some mills in Uttar Pradesh are reported to have paid Rs 155-160 a quintal, much more than the state advisory price (SAP) of Rs 140 a quintal, to buy the cane this season itself.