Governmet to increase FRP
News: The central government has increased sugarcane FRP by Rs 15/quintal to Rs 305/ quintal pegged at recovery of 10.25%. Earlier FRP for sugarcane was Rs 290 / quintal pegged at recover of 10%. So the effective increase in sugarcane price is only Rs7.5 / quintal, which is 2.5%.
View: The FRP for sugarcane is not applicable for UP based sugar mills given State Advised price, which is decided by state government is effective in the state. Except for Dalmia Bharat Sugar, which has 30% of its crushing in Maharashtra, no other company would have any implication from this decision. Moreover, effective increase in sugarcane price is minimal for Dalmia Bharat Sugar as well. On the other hand, with the increase in sugarcane FRP, there is a possibility of further increase ethanol prices in October-November by 1-2%.