India has been known as the original home of sugar and sugarcane.

Indian mythology supports the above fact as it contains legends showing the origin of sugarcane. India is the second largest producer of sugarcane next to Brazil. Presently, about 4 million hectares of land is under sugarcane with an average yield of 70 tonnes per hectare. 30% of the total sugar produced goes for gur and khandsari, 45% goes for sugar production and 25% for alcohol production (ethanol). 6 states contribute more than 85% of total sugar produced in India. India is the largest single producer of sugar including traditional cane sugar sweeteners, khandsari and Gur equivalent to 26 million tonnes raw value followed by Brazil in the second place at 18.5 million tonnes. Even in respect of white crystal sugar, India has ranked No.1 position in 7 out of last 10 years. Traditional sweeteners Gur & Khandsari are consumed mostly by the rural population in India. In the early 1930’s nearly 2/3rd of sugarcane production was utilised for production of alternate sweeteners, Gur & Khandsari. With better standard of living and higher incomes, the sweetener demand has shifted to white sugar. Currently, about 1/3rd sugarcane production is utilised by the Gur & Khandsari sectors. Being in the small scale sector, these two sectors are completely free from controls and taxes which are applicable to the sugar sector. The advent of modern sugar processing industry in India began in 1930 with grant of tariff protection to the Indian sugar industry. The number of sugar mills increased from 30 in the year 1930 - 31 to 135 in the year 1935-36 and the production during the same period increased from 1.20 lakh tonnes to 9.34 lakh tonnes under the dynamic leadership of the private sector. The era of planning for industrial development began in 1950-51 and Government laid down targets of sugar production and consumption, licensed and installed capacity, sugarcane production during each of the Five Year Plan periods. The discovery of sugarcane, from which sugar as it is known today, is derived dates back unknown thousands of years. It is thought to have originated in New Guinea, and was spread along routes to Southeast Asia and India. The process known for creating sugar, by pressing out the juice and then boiling it into crystals, was developed in India around 500 BC. Its cultivation was not introduced into Europe until the middle-ages, when it was brought to Spain by Arabs. Columbus took the plant, dearly

which was arguably discovered thousands of years ago in New Guinea. Tamil Nadu. It was in 1950-51 the government of India made serious industrial development plans and set the targets for production and consumption of sugar. built in California. sugar factories closed down almost as quickly as they had opened. the industry was established by the 1830s. the largest sugar producer in the world. where it was planted in the southern climate of New Orleans. From there. At the end of that century. Sugar consumption rate is highest in India as shown in the statistics received from USDA Foreign Agricultural Service. and Andhra Pradesh.S. the route was traced to India and Southeast Asia. when the first factory was built. Karnataka. more than thirty factories were in operation in the U. Until 1872. did not fare well. was finally able to successfully produce sugar in a profitable manner. from the late 1830s. It was not until the eighteenth century that sugarcane cultivation was began in the United States. Types of sugar industry in India The sugar industry can be divided into two sectors including organized and unorganized sector. The Indian sugar industry uses sugarcane in the production of sugar and hence maximum number of the companies is likely to be found in the sugarcane growing states of India including Uttar Pradesh. It projected the license and instalment capacity for the sugar industry in its Five Year Plans. India has notched up 2nd position following Brazil. Gur and khandsari are the traditional forms of sweeteners. It was India which began producing sugar following the process of pressing sugarcane to extract juice and boil it to get crystals. where it began to thrive in a most favourable climate. as per production is concerned. Maharashtra. Earlier attempts to create a successful industry in the U. The very first refinery was built in New York City around 1690. Gujarat. However. to the West Indies. Beginning of Sugar Industry in India Sugar is made from sugarcane. Sugar factories belong to the organized sector and those who produce traditional sweeteners fall into unorganized sector.S. It was 1872 before a factory.held. . Uttar Pradesh alone accounts for 24% of the overall sugar production in the nation and Maharashtra's contribution can be totalled to 20%.

Sugar production of India. Food and Agriculture Minister Sharad Pawar had said last week. The government requires 2. the government may cut the quantity of sugar that mills have to contribute for supply through ration shops to 12 per cent of country's total output from the current 20 per cent. At present. "We are seriously considering to cut the levy sugar obligation on mills from the current level to 12 per cent in anticipation of higher production in 2010-11 season. the world's second largest producer." a senior Food Ministry official said.Manufacturing process followed in sugar industry in India Several steps are usually followed to produce sugar.7 million tonnes of sugar for supply through ration shops. These steps can be mentioned as below: Extracting juice by pressing sugarcane • Boiling the juice to obtain crystals • Creating raw sugar by spinning crystals in extractors • Taking raw sugar to a refinery for the process of filtering and washing to discard remaining non-sugar elements and hue • Crystallizing and drying sugar • Packaging the ready sugar • NEW DELHI: Anticipating better production in 2010-11 sugar year starting next month.50 per kg to poor through ration shops. The revised levy obligation would be effective from the new season starting October 1. the official said. The sugar year runs from October to September. . the levy percentage of 12 per cent would be enough to meet the requirement of public distribution system (PDS). At projected production for the next year.8 million tonnes in the previous year. is expected to be more than 23 million tonnes in the 2010-11 against 18.06 a kg and selling the same at Rs 13. The government had raised the percentage of levy sugar to 20 per cent in 2009-10 in the wake of lower production. the government is buying levy sugar from mills at an average rate of Rs 17.

7 million tonnes from 26.8 million tonnes in 2009-10 sugar year ending this month. Sugar output may rise 28% to 24 mn tonnes in 2010-11 Press Trust of India / New Delhi September 23. production declined to 14. Higher output in the next season would enable the sugar mills to meet their export obligation of nearly one million tonnes. "Sugarcane area is much more than last year and production of sugar will be more than 23 million tonnes. Food and Agriculture Minister Sharad Pawar today said. The country has imported about five million tonnes of sugar since February 2009. Sugar production in India.3 million tonnes in the previous year. the world's second largest producer and biggest consumer. . The duty-free import is valid till December 2010 and the industry is demanding imposition of duty to check the sliding prices. According to the first advance estimate released by the government today.9 million tonnes in 2010-11 crop year. which has crashed by 40 per cent since mid-January when it reached a record Rs 48 per kg in the national capital.8 million tonnes.Sugar industry body ISMA have been demanding cut in levy sugar as this would result in more quantity for sale in the open market. Sugar year runs from October to September. Lower production forced the government to allow duty-free sugar import to boost domestic availability. In 2008-09 sugar year. I will not be surprised if it touches 24 million tonnes. sugarcane production is expected to rise 17 per cent to 324. is likely to outstrip annual demand of 23 million tonnes after a gap of two sugar year. 2010. The output has rebounded in the current year to 18. The country is estimated to produce 18. He noted that excess rains in northern India would affect the crop. rather it would boost yield. it is likely to put downward pressure on the prices." Pawar told reporters here. 18:54 IST Sugar production may increase by over five million tonnes to touch 24 million tonnes in 2010-11 sugar year starting next month owing to higher cane output. Besides.

especially in a year when a glut is expected to flood the market. ethanol. Jul 21. CDM. profitability is no more linked to production of sugar alone.Posted: Wednesday. While last year’s session dealt with the increasingly shorter crushing season. Titled ‘Sugar Tech 10: Integrated approach towards sustainable development’. 2010 at 0136 hrs IST Lucknow: Riding on the back of its highly successful seminar on sugar last year. Sugar cane accounts for two-third of the raw material used for sugar production in the world and beet root one third balance of the world production. instrumentation and automation for optimising capacity utilisation has become a norm for the industry. adding that the industry has been upgrading technologies at all fronts to make itself competitive in the market. “Mill managements need to adopt a combination of by-products such as power/co-generation. the problem of plenty and the ways of tackling it are expected to rule. farmers.” he added. both produce identical refined sugar. . “Application of energy efficient equipment.” added Shukla. Sugar is extracted from two raw materials beet root and sugarcane.” said Anil Shukla. to make significant contribution to the bottom lines and also add to the income of the farmers. consumers and the government alike. head of CII northern region. paper and cardboard. the Confederation of Indian Industry (CII) is planning a sequel to it this year. It is important that the leaders of industry consider development of integrated sugar complexes from a new perspective and identify opportunities to generate additional surplus to feed the economy and benefit the industry. “Season after season the sugar industry has been encountering unique challenges and with the advent of newer product lines in the sector. spirits and alcohols. 2010 at 2152 hrs IST Updated: Wednesday. and combination of by-products and superior understanding of cutting edge contemporary state policies are also likely impact the bottom line. India is the second largest producer of sugar in the world with 10 to 12% production of the world after Brazil. this year. Jul 21. inclusion of cost effective technologies. the day-long seminar would work on creating and sustaining an environment which is conducive to the growth of the industry in India. Prudent management decision to promote improved varieties of sugarcane.

Maharashtra and Uttar Pradesh account for majority of produce of sugar in India. 1998 with regards to licenses for new factories. the global demand would be more than the supply in 2008/2009 by 1. Sugar industry is the 2nd largest agro-processing industry in India accounting for 1 % of India s GDP for fy2005. According to Dow Jones’s report. the country wise sugar production is as: Initiatives The following policy initiatives are taken to boost the Sugar industry:  Government declared the new policy on August 20.7% cropped area. .5 million tonne over the 19 million tonne consumption for the year 2005-06 a factor leading to in Indian Government on Sugar Industry.In India. India’s cultivation area of 4-4. According to the International Sugar Organization (ISO).  Setting up of Indian Institute of Sugar Technology at Kanpur is meant for improving efficiency in the industry. The production of sugar has always been in deficit over the demand with production of only 17.5 million hectare accounts for India’s 2. which shows that there will be no sugar factory in a radius of 15 km. sugarcane accounts for the key raw material for production of sugar.6 million tonne.

From 1998-03 good monsoon resulted a larger production of sugar in the country.9 8.21 0. Major sugar producers. Sugar Production In states The following table shows level of sugar production (In Lakh Tonnes) in Indian States: State Uttar Pradesh Maharashtra Karnataka Tamil Nadu Andhra Pradesh Gujarat Haryana Uttaranchal Punjab Bihar Madhya Pradesh Other 2002-03 58. the sugar development fund was set up with a view to avail loans for modernization of the industry.58 The sugar production in the states largely depends upon monsoon.77 0.59 5.38 5.86 3.99 4.91 2003-04 46.93 3.98 17.37 2. .29 13 9.11 4.88 2.32 22. In the year 1982.77 5.57 11.99 11.94 1.08 31.82 3.77 0.04 11.85 1.84 9.85 0.88 12.32 4.81 10.64 17.75 8.09 2004-05 Estimated 50.74 61.03 3.

 Like in the past planners/policy makers/farmers producers . mostly from rural areas. if the Government designs and develops sugar industry-oriented policies.sugar cane has to be compete and compete on its own.Problems Sugar is the second largest agro-based industry in India. strong possibilities exist for counter trade.should get together to form a policy also acceptable to politicians. it is plagued with a number of problems such as cyclical fluctuations. the industry has good growth potential due to steady increase in sugar consumption.  There exists a potential in terms of increase in productivity. retail boom and diversification into areas such as power generation and production of ethanol.5% . The following steps should be taken for the improvement in sugar industry and are:  Agriculture growth pegged at 3. Steps need to be taken India is one of the largest producers of sugar in the world and so also the consumer. Though the industry contributes a lot to the socioeconomic development of the nation. It can manage its inventory to its advantage by rotating the same through imports and exports. high support prices payable to farmers. The industry provides employment to about two million skilled and semi-skilled workers besides those who are employed in ancillary activities. extraction and production. In addition to this. lack of adequate working capital. . Despite the problems. partial decontrol and the uncertain export outlook.

meaning monthly inflow to market to be regulated by Government. 67 in the public sector. o Govt.7 by 2010. 252 are in the cooperative sector.e.07 million tones.3 MMT for 2007-2008. . The past five years it exported 4. Pakistan.K and U. 136 units are in the implementation stage. World Consumption of sugar 150. The major importing countries of India are Bangladesh. the rate of export is expected to come down. farmer and the mills sugar price should move in a band. There are 453 sugar mills in the country.A. • The demand is ever lasting.K.S. India has an average exportable surplus of 6. 134 in the private sector. India produces 26 metric tones on an average but the production for the financial year 09.23 million tones every year. it is a must for PDS. Cuba. U. o  Mills and farmers should work together to improve yield and extraction through better harvesting. India can be a regular player in the international market. brazil alone does 36% and other countries give a total of 45% and the rest is done by China. Swot Analysis Strengths • Global prices to move up-incremental positive. o For the good of consumer. Global contribution is 3% by India. cost effective and quality producer. projected to become 160.  To become internationally competitive the same time dual pricing policy has to go to provide level playing field for all sweeteners. With consistent policy and competitiveness.i. to hedge on futures. Japan.  To be ready for free marketing i. o Balanced export/import policy. can procure sugar from market and subsidies in case. it is expected to go below by 20%.  Pricing Decontrol may not be the answer . Optimisation of sugar mill capacity . Indonesia. South Korea and the new ones are Khazakistan and Iran. Thailand.vertical growth need of the day. U. Since domestic prices are higher than international.

The key players in sugar industry: • BAJAJ HINDUSTAN LTD. • Some of the government policy that adhere the growth of the sugar industry. Threats • Less rainfall in the highest sugarcane cultivating region. gur and khandari which are mainly for the domestic industry. Opportunities • Prices to rise by 25% in financial year 09 and more in 2010. • The sugar industry also includes alcohol. • Sugar production being more volatile than cane production. lower cyclicality driving shifts towards integration.819) • SHREE RENUKA SUGARS LTD. wheat. • Higher margins. • Due to government policies selling of sugar cane by farmers to private sectors. (ENTERPRISE VALUE: Rs mn 62. • Due to water shortage shift of farmers to multiple crop cultivation. • Due to rise in domestic consumption the export is likely to fall. • Shift of the farmer from cane to paddy. • Obsolete technology. Weaknesses • Production to decline by 20-25% in financial year 09. • The ignorance in the residual sugar market.136).• Environmental conditions suitable for the growth of sugar cane. pulses and oilseeds.283) Conclusion . • The ongoing increase in demand year after year. (ENTERPRISE VALUE: Rs mn 32.7% cultivable land is used for the cane production. • Shortage in the sugar cane supply. • BALRAMPUR CHINNI MILLS LTD. (ENTERPRISE VALUE: Rs mn 43. • About 2. • The greater diversion of cane to un-organised sector. • The shift of Brazil from white sugar to production of ethanol.

the government would not allow unrestricted wheat exports until the end of the monsoon season. is likely to exceed its annual demand of 22-23 million tonnes for the first time in three years as farmers are planting more cane and normal June-September monsoon rainfall is forecast. from an estimated 18.9 percent in March. India allowed exports of 400.000 tonnes of wheat to neighbouring Bangladesh.7 million tonnes after a drought. 14 MAY. we will give more. 12. the world's top consumer. In 2008/09. But as prospects of supplies improved and import demand from large buyers like India weakened. but officials say the government would assess the progress of monsoon rains before taking a decision. "Definitely. Earlier. Pawar said the government was collecting information about sugar production and observing the progress of cane planting. the worst monsoon in 37 years damaged farms. This was advised by the foreign ministry. prices plunged to a one-year low this month after an unprecedented 12th weekly loss. India includes sugar as an essential commodity and it has become more liberal in this sector. "Definitely the worst is over.India is lacking due to its policy. India will export (sugar) next year. encouraging India to ease import controls and restrict exports of a number of food products. . sugar output fell 44 percent to 14. On Wednesday.5 million tonnes in the current year." he said when asked if more such deals were in the offing. Sugar and edible oils producers are demanding a tax to prevent a flood of cheap imports which would hurt local producers. he said.13PM IST. However. Sugar output in India. he said. 2010. The Indian government has struggled to control inflation. India has the potential to become the world’s biggest exporter by removing the missing leads." Pawar said. methods and lack of knowledge for this only government can make a big change. the world's biggest consumer. which soared to a 17-month high of 9. it had allowed small exports to Nepal. "Yes. Sugar output in India. signalling improving food supplies squeezed by last year's drought. But the government is still adopting a cautious approach. the farm minister said on Thursday. and Pawar said India was in no hurry to impose a tax on imports of sugar or refined vegetable oils. but Pawar said the outlook for food supply and prices was improving.40 cents per lb in February. encouraging the government to allow limited exports of the grain to some countries. An economist at the International Sugar Organization on Wednesday forecast a global sugar surplus of 2-3 million tonnes after a deficit of 8 million tonnes in 2009/10. was likely to rise to 2425 million tonnes in 2010/11. making the country a big importer and proving a key factor that propelled benchmark New York futures to a 29-year high of 30. "These are under diplomatic channels. Last year.REUTERS India to export sugar in 2010/11: Govt NEW DELHI: India will export sugar in 2010/11 and ship out more wheat in diplomatic deals." he said." Sharad Pawar told reporters at the Indian Women's Press Corps. But the wheat harvest in 2010 is set to rise to a record. exceeding demand for the fourth straight year. India became a sugar importer last year after a severe drought hit cane output and triggered a rise in food prices.

160 152.425 mln tonnes as against 7.247 mln tonnes projected in November. The ISO does not anticipate that the projected renewed global economic growth will significantly stimulate sugar consumption in the course of 2009/10.09 Production Consumption Surplus / Deficit Import demand Export availability End Stocks Stocks/Consumption ratio 31. The lower growth is attributed to soaring world market prices as well as some lingering impacts of the 2008/09 global recession on sugar consumption growth rates.070 2. raw value) in mln t in % 157.78 in% Source: ISO quarterly market outlook.068 60.281 50.213 8.WORLD SUGAR MARKET REVIEW The second revision of the world sugar balance forecast for the period from October 2009 to September 2010 shows a widening gap between world consumption and global output. Russia. particularly taking into account high world market prices.160 mln tonnes. and.48 -9.World production is now put at 157.368 -7.156 50.300 -12.86 36.07 166.432 1.153 2. India – are now likely to be lower than expectations at the beginning of the season.48% and 2.17 53.66%. will rise 17% this year . up by 4.585 164. The world sugar economy is facing the second consecutive year of a significant gap between world consumption and production. World Sugar Balance 2009/10 2008/09 Change (mln tonne. the growth in global production is far too small to cover anticipated increases in sugar consumption.585 mln tonnes.678 3. global use of sugar is expected to reach 166.671 54. Therefore. probably. Even so.425 -11.41 52. respectively). and the world statistical deficit is expected to reach 9. the world’s biggest producer.086 4. February 2010 SUGAR ABROAD BRAZIL Sugar output in Brazil . World consumption is expected to grow at a rate significantly lower than the long-term 10 year average (1.482 4. raw value.068 4.678 mln tonnes or 3.07% from the last season. Generally sugar crops in the world’s leading producing countries – with the exception of the EU. A summary of the revised world sugar balance in 2009/10 is provided in the table below.

Mills will process 54. Mills will process a record 664. the ministry’s crop-forecasting agency Conab.8 million tons.5 million tons last year.9 million euro subsidy. Saint Louis Sucre (143. came before the harvesting season this year. The rainy period in the Center South.2 million euros). InFrance . while France is fighting to retain them. a . up from 33. which has delayed the publication of its list until after the country's general election on May 6. the sugar sector benefited from the aid for exporting. Brazilian mills will produce 38. Britain wants to put an end to direct subsidies. are the two main protagonists in the hotly debated reform of the CAP. The CAP aid for exports allows European exporters to remain competitive by compensating for the EU's higher prices compared with world markets. with the aim of using the information to debate the future of the policy. in the year between October 2008 and 2009. with Azucarera Ebro receiving 119.3 million tons of sugar-cane into sweetener and ethanol. For the 2009-10 period.1 mln in 2008/09. In March. where about 90% of Brazil ’s sugar is made. the world’s second largest exporter. EU EU sugar companies were among the largest beneficiaries last year of Europe 's Common Agricultural Policy (CAP) payments. As a result. sugar exports are expected to drop to around 4. taking into account a negative impact on cane by a serious drought in the northern part of the country.4% into sugar. three sugar companies received the top subsidies: Tereos (117.6% of their cane into ethanol and 45. according to statistics made public recently by most EU member countries.9 million euros). helping the plants develop. France and Britain .7 mln tons for the season.7 million tons of the sweetener in 2010. THAILAND The export availability in Thailand . down from 5.8-6.7 million euros) and Cristal Union (57.In Spain a sugar company also occupied first place.4 million euros. is likely to be further reduced. The world's leading sugar company Sudzucker came second in Germany 's list with its 42. AUSTRALIA Australian sugar production in 2010-2011 is projected at 4. Last year excess rains during the AprilNovember season led mills to halt output several times because humidity reduces sugar cane’s sucrose. up from 604. It is the second year running that EU countries have had to publish by April 30 the full list of beneficiaries of CAP drier weather will favour harvesting and after cane growers increased planting.1 million tons last year.9 mln tons of sugar. the Office of Cane and Sugar Board downgraded the2009/10 crop projection to 6. said. Each year there are special payments.

000-tonne sugar import quota earlier this year.80 billion. INDONESIA Indonesia is set to import sugar as local sugar mills are unable to meet growing demand. after Brazil .1 million tons per annum. The Mexican government opened a 250.231 million tons of sugar this year.571 tons of sugar in March.000 tons of sugar next month. by almost 300 dollars. The company agreed to supply a ton of sugar for 565.7 million tons. Guatemala . In addition to this.400 tons of sugar at 831 dollars per ton. In 2009/10. It noted that the UAE is ranked amongst the top ten white sugar exporting countries globally and came in the fourth place. the agency will float a tender to buy 60. 2010.52 million tons in the previous season. The delivery of the sugar from the UK company is planned to arrive in May and June. where the crop is expected to fall short. than the price of the contract awarded to the UKcompany and Louis Dryfus of Sweden . compared with estimated exports this year at 3. This is lower.5 dollars. Accumulated sugar exports for the 2009/10 season which began in November were 878. all sugar mills in the country could only produce 2.4 million tons. more than double the 176.45 million tons valued at A$1. UAE The UAE is the world’s second biggest re-exporter of cane sugar after Uganda . up 79% from the same period a year ago. Thailand andIndia . ETHIOPIA The Ethiopian Sugar Development Agency is expected to sign an agreement on April 27.rise of 6. for the supply of 50. GUATEMALA Guatemala exported 360.326 tons. with the UK based ED&F Man Sugar for the supply of 40.7 million tons. This year sugar consumption has even been projected to run into 4 million tons with sugar output estimated at 2.000 tons of sugar. Guatemala is exporting more sugar to Mexico . with regards to its volume . with a total of 15. the biggest sugar producer in Central America .000 (nearly US$1) a kilogram this year. four months ago. High sugar prices would result in a 7% increase in the cane area harvested in Australia in 2010-11.2% from 4. is expected to produce 2. unveiled a recent study by the Ministry of Foreign Affairs. It is very difficult to raise sugar production to up to 4 million tons and therefore sugar imports will be inevitable.206 tons exported in the same month a year ago.25 million tons valued at A$1.88 billion. reversing a decline that began in 2002-03. while sugar demand was projected to reach 3. Sugar exports were pegged at 3. It is estimated that domestic sugar price would increase to more than Rp9.

*************** . According to UAE data.5% ) in 2008. sugar and sugar derivative exports reached 63 countries around the world in the year 2009 with a total value of approximately US$ 472 million and a growth rate of 36. to Thailand in 2009. The value of the UAE’s imports of Sugar and Sugar Derivatives reached approximately US$ 225 million in 2009.of exports of this commodity. down from 328 million (31. The majority of the imports into the UAE of this commodity shifted from India in 2008. compared with the year 2008.7%. mulls-cuts-in-sugar-mills-contribution-towardsPDS/articleshow/6593812.cms . http://economictimes.Bibliography 1.

indiatimes. 4.financialexpress.htm ustry-analysis/the-sugar-industry-in-india/msg10314/? PHPSESSID=8ba0f97d5d4e910386ca5969a420c5a7#msg10314 . 6.2. http://www.

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