Alarmed over sugar mills intentionally selling sugar below the government specified Minimum Selling Price (MSP) of Rs 3,100/- per quintal, the central government has warned of stringent action against errant mills. In a letter to cane commissioner of the major sugar producing states, Jitendra Juyal, joint director, ministry of consumer affairs, food and public distribution has asked for names of such mills to be intimated to the central government for further action.
Four months into the sugar season of 2020-21, sugar mills in Maharashtra and Karnataka had started selling sugar below the MSP. This was mostly to generate quick funds to clear their dues in way of payment of the Fair and Remunerative Price (FRP) for cane procured from farmers as well as other running cost. This phenomenon of price cutting was rampant in Solapur where almost all the mills were indulged in the same, Marathwada and Ahmednagar where half of the mills were doing so.
Back in 2018, the central government had fixed the MSP of sugar at Rs 3,100/- to prevent millers from selling the same at costs far below the cost of production. This move was needed to stabilize the market in a year when excess sugar production had seen millers selling the sweetener at prices as low as Rs 2,500-2,600.Along with the MSP, the mils were given fixed monthly quota for sale to keep sugar from flooding the markets.