Sugar Stocks saw selling pressure today (February 22) amid rising input costs after the government announced a hike in the fair and remunerative price (FRP) of sugarcane.
Shares of Shree Renuka Sugars, KCP Sugar, Mawana Sugars, Rana Sugars and others fell more than 3% on Thursday at their daily low levels. Balrampur Chini Mills, EID Parry and Triveni Engineering also saw a more than 2% drop in the early morning trades. Dalmia Bharat Sugar, Dhampur Sugar Mills and Dwarikesh Sugar witnessed their shares slip as much as 1.8%.
On Wednesday, the Cabinet Committee on Economic Affairs, chaired by PM Narendra Modi, approved a hike in the fair and remunerative price (FRP) of sugarcane to Rs 340 per quintal with a sugar recovery rate of 10.25% for the 2024-25 season.
The FRP has been determined based on recommendations of the Commission for Agricultural Costs and Prices (CACP) and after consultation with state governments and other stakeholders.
The revised FRP, a nearly 8% or Rs 25 hike from the FRP of sugarcane for the current season 2023-24, will be applicable from October 1, 2024. The committee said in a press release that the new FRP will ensure the prosperity of sugarcane farmers.
At 107% higher than A2+FL cost of sugarcane, the new FRP will ensure prosperity of sugarcane farmers. It is noteworthy that India is already paying the highest price of sugarcane in the world and despite that Government is ensuring the world’s cheapest sugar to domestic consumers of Bharat. This decision of Central Government is going to benefit more than 5 crore sugarcane farmers (including family members) and lakhs of other persons involved in sugar sector. It re-confirms fulfilment of Modi ki Guarantee to double farmers’ income.
With this approval, sugar mills will pay FRP of sugarcane @ ₹ 340/quintal at recovery of 10.25%. With each increase of recovery by 0.1%, farmers will get additional price of ₹ 3.32 while the same amount will be deducted on reduction of recovery by 0.1%. However, ₹ 315.10/quintal is the minimum price of sugarcane which is at recovery of 9.5%. Even if sugar recovery is lesser, farmers are assured of FRP @ ₹ 315.10/quintal.
In last 10 years, Modi Sarkar has ensured that farmers get Right Price of their Crop in Right Time. 99.5% cane dues of previous sugar season 2022-23 and 99.9% of all other sugar seasons are already paid to farmers leading to the lowest cane arrears pending in history of sugar sector. With timely policy interventions by the Government, sugar mills have become self-sustainable and no financial assistance is being given to them by Government since SS 2021-22. Still, Central Government has ensured ‘Assured FRP and Assured Procurement’ of sugarcane to farmers.
