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Indian Sugar Industry, analysis research report


By ChinaCCM Dated: Aug 17, 2010

Indian sugar industry has entered the strongest up cycle (lowest stock to use ratio) in the history of 50 years after witnessing supply glut in previous two sugar seasons in a row (SS 2006-08)...... Summary Indian sugar industry has entered the strongest up cycle (lowest stock to use ratio) in the history of 50 years after witnessing supply glut in previous two sugar seasons in a row (SS 2006-08). In SS2006-07, sugar production reached all-time high of 28.3 mn tonnes, registering a growth of 46.6% on yoy basis and it declined marginally by 7.1% to 26.3 mn tonnes in SS2007-08. Sugar production reached an all-time low of 14.7 mn tonnes during SS2008-09 due to sharp fall in the sugarcane acreage. However, sugar consumption continued to grow at a steady pace. It grew at a CAGR of 4% during SS 07-09. In SS2008-09, on account of a steep fall in sugar production and fall in the stock to use ratio, the average wholesale prices increased by almost 50% on yoy basis. This had a positive impact on the margins of sugar companies in the Q4FY09. The production of sugar is spread across the country. Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu, Gujarat and Andhra Pradesh are the major sugar producing states in the country. In SS2007-08, these six states together accounted for almost 92% of the total sugar produced in India. In SS2007-08, the State of Maharashtra produced the highest sugar at 9.1 mn tonnes followed by UP with 7.3 mn tonnes. These two states together account for almost 62% of the total sugar produced in India. Sugarcane is the primary raw material for the sugar industry. It accounts for almost 75%-80% the total operating cost of the sugar industry. UP is the largest sugarcane-producing state in the country and accounted for about 37% of the total sugarcane output in SS 2007-08 followed by Maharashtra with 24%. Even though, UP is the largest sugarcane-producing state in the country it is the second-largest sugar producer in India as drawal and recovery rates in UP are one of the lowest in India. We expect sugar deficit situation in India to continue in SS2009-10 and SS2010-11. We believe that India will bridge the gap between demand and supply through imports. We expect that sugar prices will continue to rise till SS2009-10 on account of tight demand and supply situation in country. Table of Contents Executive Summary Outlook Introduction ? Overview? *Structure of Industry *Contribution to Indian Economy *Evolution ? Characteristics?

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*Fragmented Industry *Regulated Industry *Raw Materials in Close Vicinity of Sugar Plants *Cyclical Industry *Seasonality *Working Capital Intensive *Geographical Spread Types of Sugar *Granulated Sugar *Brown Sugar *Liquid Sugar Government Regulations and Incentives ? Policies related to Sugarcane *Sugarcane Pricing *Sugarcane Procurement Policies Related To Sugar *Domestic Sales *Exports *Imports Demand & Supply Pre 1990 Era Post 1990s *Demand & supply scenario in SS 1990-91 to SS 2002 -2003Period? *Demand & Supply Scenario in SS 2003-04 *Demand & Supply Scenario in SS 2004-05? *Demand & Supply Scenario in SS 2005-06 *Demand & Supply Scenario in SS 2006-07? *Demand & Supply Scenario in SS 2007-08 *Demand & Supply Scenario in SS 2008-09? Demand Drivers *Growing Population & Per Capita income *Lower Per Capita Consumption ? Supply Drivers *Sugarcane Availability *Drawal Rate? *Recovery Rate *Political Factor State-wise Scenario ? State-wise Analysis

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*Maharashtra *Uttar Pradesh (UP) *Karnataka *Tamil Nadu *Gujarat *Andhra Pradesh Global Scenario? *The Brazil Impact By-Products *Bagasse *Molasses *Business Model Analysis Cost & Margin Analysis Cost *Sugarcane Production *Sugarcane Pricing ? Margins Sugar Prices Company Profile *Bajaj Hindusthan Ltd. *Balrampur Chini *Renuka Sugar Ltd. *Triveni Engineering & Industries Ltd. Annexures *Monthly Sugar Production Trend *Statewise Area under sugarcane in India *Statewise Duration of Crushing Season *Statewise Molasses Production Trend *Statewise Number Factories in Operation *Statewise Sugar Production Trend *Statewise Sugar Recovery Rate? *Statewise Sugarcane Crushed by Sugar Mills *Statewise Sugarcane Production Trend *Statewise Sugarcane Yield? *Statewise Utilisation Trend List of Tables Introduction structure of the industry during SS2007-08 Number of factories in operation and average capacity of mills Comparison of regulatory environment in top 4 sugar producing countries

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Top 5 Sugarcane and Sugar producing states in India in SS 2007-08 Government Regulations and Incentives Trend in Statutory Minimum Prices Trend in State Advised Prices Sugarcane pricing policy Demand & Supply Statement showing area under sugar cane production, yield and sugar production Demand-Supply Trend Statement showing area under sugar cane production, yield and sugar production Demand-Supply Trend Yield rates in major sugar producing states drop in the sugarcane yields and increase in the utilisation of sugar for Gur and Khandsari Area under sugarcane cultivation in top 5 sugarcane producing states Comparison of SMP on Wheat and Sugarcane Sugarcane scenario: Top 5 states Steady growth in sugar consumption and population Trend in Recovery rate State-wise Scenario Sugarcane & Sugar production trend of top 6 states Statement showing area under sugar cane production, yield and sugar production the capacity expansion of few UP based companies Statement showing area under sugar cane production, yield and sugar production in UP Statement showing area under sugar cane production, yield and sugar production? Statement showing area under sugar cane production, yield and sugar production in TN Statement showing area under sugar cane production, yield and sugar production Statement showing area under sugar cane production, yield and sugar production in AP Global Scenario Top 10 sugar producers in SS 2007-08 Global Demand-Supply Trend Crushing update of Central-South region SS 2009-10 By-Products State-wise annual co-generation capacity in India ethanol requirement at 5% blending programme vs. 10% blending programme Non Integrated Model: Sugar +Molasses +Bagasse Partially Integrated Model: Sugar + Ethanol +Bagasse Partially Integrated Model: Sugar + Molasses +Power Fully Integrated Model: Sugar + Ethanol +Power Cost & Margin Analysis Company-wise Raw material cost in FY 09 major sugarcane producing states in tropical and sub-tropical regions Company-wise sugarcane cost List of Figures Introduction

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Domestic Demand and Supply trend Major Sugarcane and Sugar producing states in India in SS 2007-08 Sugar production cycle Closing stock as percentage of domestic consumption Month-wise production trend of sugar Trend in Net working capital to Net sales Ratio of the sugar industry Demand & Supply Sugar production trend in pre 1990 era Sugar production trend during 1991-2008 Increase/Decrease in SMP prices of various crops Demand & Supply Scenario in 2008-09 Steep fall in sugarcane acreage led to sugar crisis Consumption Pattern Per capita consumption of sugar Trend in drawal rate Monthly release order of non-levy sugar State-wise Scenario Share of top 6 sugar producing states Sector wise distribution of sugar production capacity Trend of sugar crushing season Trend of recovery rate Sector wise distribution of sugar capacity trend of sugar crushing season in the state vis a vis all India crushing season Trend of recovery rate Global Scenario Global Sugar Production Trend Top 5 sugar exporting countries in SS 2007-08 Top 5 sugar importing countries in SS 2007-08 International Raw sugar Prices Brazil- Sugarcane Production Trend Brazil- Sugar Production Trend Brazil-Sugar Exports trend By-Products Fully/ Partially Integrated players vs Non integrated players Cost & Margin Analysis Sugarcane Components Sugarcane production trend Trend of sugarcane arrears Trend of PBDIT and PAT Margin ### ChinaCCM.com is China's leading industry consultancy expert offering industry intelligence and research solution, ChinaCCM Market Research Centre is a research division focusing on professional market survey and industry research.

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Category Tags Email Phone Fax State/Province Zip Country

Sugar Indian, sugar, Research, Report Click to email author 86-10-58303339 86-10-58303388 Beijing 100022 China

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