7% hike in sugar MSP to put pressure on private mills to clear arrears

While the hike improves the realisation of beleaguered mills, with outstanding for current 2018-19 crushing season rising to almost Rs 22,000 cr, it remains below average production cost

While the hike of Rs 2 a kg in the minimum selling price (MSP) of sugar to Rs 31 a kg is unlikely to have any medium-term impact on the domestic sugar sector, bogged down by a global glut and rising inventories, the central government’s deft move would nonetheless exert pressure on the private sugar mills to clear farmers’ arrears. Now Rs 31 a kg ex-mill becomes a benchmark for wholesale market price.

In the crucial election year, with the Lok Sabha polls merely a few weeks away, the extra elbow room provided to mills in the form of the