The Government will be bearing in mind the price rise of essential commodities in the country when it fixes the support price for sugarcane for the coming season beginning from October.
The issue is likely to be taken up at the meeting of the Cabinet Committee on Economic Affairs tomorrow.
The Statutory Minimum Price (SMP) for sugarcane for 2005-06 stood at Rs 79.5 per quintal for sugar at an assumed 9 per cent recovery rate.
The sugar millers, who will be paying the SMP to the farmers, perceive the SMP as a floor price as the sugarcane growing states have the power to fix even higher sugarcane price, which is known as State Advised Price.
In fact, some major southern states growing sugarcane not only fix the price much before the start of the season, but also pay 50 per cent advance to the farmers, thereby taking the risk of overpayment.
With Agriculture Minister Sharad Pawar expecting a high sugar output of about 220 lakh tonnes next year, the sugar mills would be looking forward to high and uninterrupted supplies of sugarcane for enhancing output.
Sugar output is expected to touch 192 lakh tonnes during the 2005-06 sugar season as against the annual consumption of 185 lakh tonnes.
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