Food ministry asks states to act against sugar mills selling sugar below MSP

March 25, 2019

The food ministry has asked states to ensure that sugar mills are not selling the sweetener at below the minimum selling price (MSP), which has been increased recently to Rs. 31/kg from Rs. 29.  All mills have to sell sugar at Rs. 31/kg plus GST and transportation charges. Action may be taken against mills selling sugar below floor price

 In a communication to all the principal secretaries of sugar-producing states, the ministry said mills must follow the Sugar Price (Control) Order, 2018, which directs them to sell sugar at the MSP. 

  Food ministry the department had found that some mills were selling sugar either at below MSP or at MSP inclusive of GST to liquidate their stock. This is against the directives of the government and is in violation of the Sugar Price (Control) Order, 2018. 

 The government, in February this year, increased the MSP of sugar to 31 for the year 2019-20. The higher MSP would provide more liquidity to sugar Mills, which can then be able to pay arrears on sugarcane to farmers. As on February 13, mills’ arrears to farmers amounted to Rs. 20,167 crore. 

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