India's sugar industry has revived its demand for a dual pricing system, arguing that industrial users account for nearly 60-65% of the country's sugar consumption but continue to pay the same price as retail consumers. According to Prakash Naiknavare, Managing Director of National Federation of Cooperative Sugar Factories Limited (NFCSF), separate pricing for industrial and domestic users would better reflect changing consumption patterns and improve sugar mill realisations. The proposal was discussed during a high-level meeting held on May 27 in Delhi, where Union Home Minister Amit Shah assured decisions would be communicated within 10 days.
The sugar industry's concerns were addressed in a joint meeting on May 27 in Delhi, lasting nearly one and a half hours. The meeting included Union Food Minister Prahlad Joshi, Agriculture Minister Shivraj Singh Chouhan, and Union Home Minister Amit Shah, along with secretaries from food, agriculture, cooperation and petroleum ministries. On the Maharashtra side, the Chief Minister, both Deputy Chief Ministers, around 12 senior ministers and several senior officials participated. As reported by CNBC TV18, the Home Minister took note of every point raised and addressed each issue in his concluding remarks.
Among the major issues raised during the meeting were upward revision in sugar MSP and sugar-based ethanol prices, equitable allocation of ethanol opportunities between sugar and grain industries, rescheduling of outstanding loans, availability of fresh credit, and issues related to Sugar Development Fund (SDF) loans. The industry also discussed the OTA scheme, requesting that at least 50% of the principal interest burden be addressed, even though penal interest has already been waived. Another new issue was the proposal to bring jaggery units with production capacities above 100 tonnes under the Sugarcane Control Order.
Historically, the dual pricing concept was not seriously considered due to concerns about possible black marketing and misuse of price differentials. However, given the changing structure of the market and the growing role of industrial consumption, the industry believes it is time to revisit this framework. According to CNBC TV18, Naiknavare called for greater policy support, including higher sugar and ethanol prices, stating such measures along with the rollout of flex-fuel vehicles could strengthen the financial health of sugar mills and support the sector's long-term growth.
