The government is likely to increase the selling price of sugar by Rs 1-2 per kg, said sources familiar with the matter.

However, it is less than the industry demand for price increase up to Rs 35 per kg.

A cabinet meeting is not required for any price increase decision and that the food ministry can issue a notification for sugar price rise.

Throwing further light, Praful Vithalani, chairman, All India Sugar Trade Association (AISTA) said as of now they have not received any confirmed news of price rise.

However, diversified companies like Balrampur Chini, Dalmia, Dhampur etc which also manufacture ethanol, co-gen besides sugar will get good bottom if MSP is hiked, he said.