Minimum Selling Price (MSP) on Sugar

Published on 11 Sep 2025

• Sugar mills have requested a hike in the minimum selling price (MSP) of sugar due to rising costs.

• The Minimum Selling Price (MSP) of sugar is the floor price at which sugar mills must sell their sugar to wholesalers or retailers. 

• It was introduced in 2018 by the Centre under the Sugar Price (Control) Order, 2018 issued under the Essential Commodities Act, 1955.  

• It seeks to ensure that mills cover their cost of production and can pay Fair and Remunerative Price (FRP) to farmers.

• FRP on the other hand is the price that sugar mills must pay the farmers for the sugarcane.

• FRP is decided based on recommendations of the Commission for Agricultural Costs and Prices (CACP) in consultation with State governments and the sugar industry. 

• However, some States like Uttar Pradesh, Haryana and Punjab offer higher prices for sugarcane under State Advised Price (SAP), which mills in those States must abide by.

• The MSP was introduced by the Centre to ensure that the industry gets at least the minimum cost of production of sugar, allowing them to clear sugarcane dues of farmers. 

• MSP is determined by taking FRP and adding minimum conversion cost (sugarcane to sugar) incurred by sugar mills running at highest efficiency. 

Keywords:

Minimum Selling Price on Sugar MSP Sugar Minimum selling price Agriculture Farmer suicides Sugar mills Fair Remunerative Price FRP Commission for Agricultural Costs and Prices CACP State Advised Price SAP Essential Commodities Act 1955 Sugar