India is planning an 8% increase in the floor price for sugar cane in the upcoming 2024/25 season, beginning October 1, as part of efforts to boost sugar production. The Fair and Remunerative Price (FRP) for cane, revised annually by the federal government, is currently under consideration to be set at 340 rupees per 100 kg, up from the current year's 315 rupees, assuming a basic recovery rate of 10.25%. While the government traditionally announces the FRP a few months before the start of the crushing season, there is speculation that this year's announcement might be made earlier, possibly before general elections, to appease farmers.
However, some industry officials express concerns over the proposed 8% increase, stating that sugar prices have remained stagnant for a few years, and mills may find it challenging to afford such an increase unless sugar prices witness a corresponding rise. India's sugar output for the current crop year is anticipated to fall short of consumption, influenced by weak rains, marking the first such occurrence in seven years. Lower plantings may even compel the world's second-largest sugar producer to resort to imports in the following year.