FRP fixed at ₹365/qtl for SS 2026-27; marginal hike, cost pressure persists on mills
05-May-2026 08:22 PM
The Cabinet Committee on Economic Affairs has fixed the Fair and Remunerative Price (FRP) of sugarcane at ₹365 per quintal for the 2026-27 sugar season (October–September).
The FRP is based on a 10.25% recovery rate, with a premium or deduction of ₹3.56 per quintal for every 0.1% change in recovery. The government has retained the provision of no deduction for recovery below 9.5%, ensuring a minimum payable price of ₹338.3 per quintal.
The new FRP is 2.81% higher than the 2025-26 season, indicating a moderate increase largely in line with market expectations. With the cost of production (A2+FL) estimated at around ₹182 per quintal, the FRP provides over 100% margin to farmers, supporting cane production and acreage stability.
From a trade perspective, the decision keeps cost pressures elevated for mills.
Cane dues clearance remains strong, with around 99.5% payments completed for the 2024-25 season and about 88.6% paid so far in the ongoing 2025-26 season, indicating relatively stable liquidity in the sector.
The FRP hike is seen as neutral to slightly supportive for the market. However, with no major relief in cane costs, future market direction will depend on sugar prices, ethanol blending dynamics, and export policy.
FRP fixed at ₹365/qtl for SS 2026-27; marginal hike, cost pressure persists on mills
The Cabinet Committee on Economic Affairs has fixed the Fair and Remunerative Price (FRP) of sugarcane at ₹365 per quintal for the 2026-27 sugar season (October–September).
The FRP is based on a 10.25% recovery rate, with a premium or deduction of ₹3.56 per quintal for every 0.1% change in recovery. The government has retained the provision of no deduction for recovery below 9.5%, ensuring a minimum payable price of ₹338.3 per quintal.
The new FRP is 2.81% higher than the 2025-26 season, indicating a moderate increase largely in line with market expectations. With the cost of production (A2+FL) estimated at around ₹182 per quintal, the FRP provides over 100% margin to farmers, supporting cane production and acreage stability.
From a trade perspective, the decision keeps cost pressures elevated for mills.
Cane dues clearance remains strong, with around 99.5% payments completed for the 2024-25 season and about 88.6% paid so far in the ongoing 2025-26 season, indicating relatively stable liquidity in the sector.
The FRP hike is seen as neutral to slightly supportive for the market. However, with no major relief in cane costs, future market direction will depend on sugar prices, ethanol blending dynamics, and export policy.