India is the largest manufacturer of sugar in the universe and produces about 18.5 million dozenss of white plantation sugar per annum. Sugar industry is the 2nd largest fabrication industry in India after cotton. About 500 thousand people are straight employed in the sugar industry. Including husbandmans and their household members, around 45 million people representing 7.5 % of the rural population of India, depend on sugar industry for their support. The industry contributes about Rs. 16 billion ( $ 328.5 manganese ) to the Central and State treasuries.
India is besides the largest consumer of sugar and consumes around 16 million dozenss of sugar per annum. There are 525+ runing sugar Millss India. Sugarcane bring forthing provinces are U.P, Maharashtra, Karnataka, Tamil Nadu etc.
Major Players – Balrampur Chini Mills, Bajaj Hindustan, Andhra Sugars, Thiru Arooran Sugars, Dhampur Sugar, Shree Renuka Sugars, Godavari Sugar Mills.
Sugar in India
As per the map of India in front, Uttar Pradesh and Maharashtra are the largest manufacturers of Sugar in India. Availability of H2O and moderate climatic conditions are the biggest success factors behind such production degrees. Gujarat and Southern provinces of Karnataka, Andhra and Tamil Nadu are average manufacturers of sugar in India. The eastern, cardinal, northern and north western parts contribute really small to entire sugar production.
Largest Sugarcane Turning States in the state – Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu and Andhra Pradesh
These 6 provinces contribute 85 % of the entire sugar production in India
UP and Maharashtra together contribute somewhat more than 57 %
Growth in production
As per the undermentioned saloon diagram production of sugar declined in the twelvemonth 2008-09 to a meager 15 manganese tones from record degrees of 26 manganese tones in old twelvemonth 2007-08 due to unfavourable climatic conditions but recovered in 2009-10 and is projected to traverse 2007-08 degrees in 2010-11 to 28 million tones.
But the undermentioned diagram reveals a really different image. The production of sugar in 2009 is more than 2008 degrees but land used in cultivation is more in 2008 and less in 2009. This can be due to following factors:
In 2009 husbandmans shifted to some other harvests due to high volatility in sugar market and unfavourable clime.
Existing husbandmans went for more scientific methods of cultivation which despite retrenchment led to a higher production.
The clime was so unfavourable in 2008 that despite a larger country production was short of 2009 degrees.
Projection for 2010-11 is disposed as per country under cultivation which rose from 4200000 hectares to 4800000 hectares.
Export Import Analysis
Over the old ages the sugar production fluctuated perceptibly. During the old ages of deficits India turned a net importer. Thus the overall scenario has been that of fringy export of sugar. A High Powered Committee was constituted to analyze the affair and after analyzing the affair in deepness, it recommended entire liberalisation of the sugar sector to guarantee steady and stable growing in production. Government of India has accepted this recommendation and stairss are being taken in this way.
The above tabular array shows that despite a immense shutting stock of sugar every twelvemonth the exported sum is really less. This can be attributed to the fact that the authorities wants to maintain a buffer stock for the following twelvemonth so that if production slowdowns behind ingestion the trim stock can be used as can be seen in twelvemonth 2002-03 and 2003-04 where ingestion is manner high than production as depicted by the graph below. But what needs to be seen that despite immense stocks why is the authorities importing sugar? The reply lies in the volatility of sugar market where right sum of green goods ca n’t be predicted so sugar is imported to control short term supply deficit.
The exports of sugar rose from twelvemonth 2006-07 but have seen a worsening tendency from 2007-08.
Equally far as imports are concerned their relation with exports is inverse of it i.e. imports rose when exports declined.
Jawaharlal Nehru Port in Mumbai holds the maximal quantum of sugar to be exported whereas Kandla in Gujarat holds the lower limit. JNPT is closely followed by Vizag/Vishakhapatnam in Andhra Pradesh as per harvest seasons of 2003-04. Mumbai port has shown the maximal diminution from 639 metric dozenss to a meager 45 metric dozenss followed by Tuticorin from 393 to 39 metric dozenss due to lesser production due to harvest failure and hereafter domestic demands.
Indian Exports: Destination-wise
The following tabular array shows India ‘s export spouses on metric dozenss footing. Indonesia, Sri Lanka and Bangladesh hold the maximal portion. A batch of African states like Tanzania, Uganda, Ghana etc. besides characteristic in the list.
Major Sugar manufacturers of the World
Largest Producer of Sugar in the universe
Expected Production in 2008 – 09: 30.8 Million Tonss
3rd Largest Sugar Producing state
Expected Production: 13 Million Tonss
4th Largest Producer of Sugar
Expected Production: 7.78 Million Tonss
Production: 4.73 Million Tonss
Chiefly Domestic Consumption
5th Largest Producer of Sugar
Production of 5.01 Million Tons up to May 2008 – Addition of 6.3 % over the old twelvemonth
The above tabular array shows that those states which produce maximal sugar are non needfully the maximal exporters besides. Out of the top 7 manufacturers merely Brazil and Australia characteristic in the list. India though the 2nd largest manufacturer besides holds the 2nd largest population so is placed at 10th topographic point every bit far as exports are concerned. China the 3rd largest manufacturer does n’t calculate in the list at all.
Concept of Command Area which binds Cane husbandmans and Sugar Millss to sell and purchase from each.
Sugar Millss have to buy all the Cane sold to them, even if it exceeds their demand.
In instance of capacity enlargements at bing Sugar Millss, there is uncertainness sing allotment of extra Area based on the expanded capacity.
Sugar gross revenues
Government mandates 10 % of sugar to be sold as levy quota sugar at monetary values much lower than the market. The authorities besides specifies monthly release quotas for free sale sugar
Capacity and Production
Sugar manufacturers are non allowed to have cane Fieldss in India.
New sugar Millss can non be set up within 15 kilometers of bing units.
Exports & A ; Imports
Imports of both natural and white sugar pull a basic responsibility of 60 % and a offseting responsibility of Rs. 910 per ton.
In periods of sugar deficit, under the Advanced License Scheme ( ALS ) , license holders can import natural sugar without paying any responsibility, capable to the status that they re-export white sugar within a fixed period.
Sugarcane pricing policy
The Cardinal Government fixes the SMP of sugar cane in footings of Clause 3 of the Sugarcane ( Control ) Order, 1966 for each sugar season. The SMP is fixed on the footing of the recommendations of the Commission for Agricultural Costs and Prices ( CACP ) and after confer withing the State Governments and associations of sugar industry and cane agriculturists. The SMP is fixed holding respect to the undermentioned factors: –
a ) Cost of production of sugar cane ;
B ) Tax return to the agriculturists from alternate harvests and the general tendency of monetary values of agricultural trade goods ;
degree Celsius ) Availability of sugar to consumers at a just monetary value ;
vitamin D ) Monetary value at which sugar produced from sugar cane is sold by sugar manufacturers ; and
vitamin E ) Recovery of sugar from sugar cane.
Statutory minimal monetary value ( SMP ) of sugar cane
The Cardinal Government has fixed the Statutory Minimum Price ( SMP ) of Sugarcane for the 2006-07 sugar season at Rs. 80.25 per quintal linked to a basic recovery of 9.0 % , capable to a premium of 88 paisa for every 0.1 % point addition in the recovery above that degree. The SMP of sugar cane collectible by sugar mills for each sugar season since 2000-01 has been shown in the undermentioned tabular array: –
Sugar Monetary values
Under the proviso of sub-section 3 ( degree Celsius ) of subdivision 3 of the Essential Commodities Act, 1955, the ex-factory monetary values of the levy sugar requisitioned from the sugar Millss is fixed holding respect to: –
( a ) The minimal monetary value, if any, fixed for the sugar cane by the Cardinal Government ;
( B ) The fabricating cost of sugar ;
( degree Celsius ) The responsibility or revenue enhancement, if any, paid or collectible thereon ; and
( vitamin D ) The sensible return on the capital employed in the concern of fabrication sugar.
Sugar Millss are paid the levy sugar monetary value on zonary footing. However, the Central Government besides determines the mean all-India levy sugar monetary value. For the sugar season 2003-04, the mean all-India levy sugar monetary value has been determined at Rs.1305.92 per quintal as against Rs.1259.99 for the preceding sugar season.
Levy sugar supply under PDS
The population base for supply of levy sugar under the PDS was changed from 1991 nose count population to the projected population as on March 1, 1999 with consequence from March 1, 2000. With consequence from February 1, 2001, the population base for supply of levy sugar under the PDS has been changed to the projected population as on March 1, 2000.
In order to guarantee better targeting, levy sugar supply under the PDS has been restricted merely to the BPL households in all provinces /UTS except the North Eastern States, Hill States and Island Territories, with consequence from 01.02.2001.The minimal per caput per month quantum of levy sugar allotted under the PDS was increased from 425 gram to 500 gram with consequence from February 1, 2001.
The Monthly levy quota under the PDS for assorted provinces /UTS with consequence from 01.02.2001 is 2.16.Lakh Tones.The retail issue monetary value of levy sugar under the PDS has been fixed at Rs. 13.50 per kilogram. w.e.f March 1, 2002, which is go oning.
Sweeping monetary value of non-levy sugar
160.20 Lakh tones of non-levy free sale sugar was released for sale in the unfastened market during 2005-2006 sugar season as compared to 146.00 hundred thousand tones during the old sugar season, 2004-2005. The scope of sweeping monetary values of non-levy sugar in the four metropolitan metropoliss ( Delhi, Mumbai, Kolkata and Chennai ) during 1998-99 to 2006-07 ( upto 30th November, 2007 ) sugar seasons were as follows:
Retail monetary values of non-levy sugar
The scope of retail monetary values of non-levy sugar in the four metropolitan metropoliss ( Delhi, Mumbai, Kolkata and Chennai ) during 1998-99 to 2006-07 ( upto 30th November, 2007 ) sugar seasons were as follows: –
Sugar Portals and Futures Trading.
India is presently the largest manufacturer and consumer of sugar in the universe. In the twelvemonth 2001 it produced 18.50 million dozenss of sugar as against 12.05 million dozenss in 1991. Sugar industry is the 2nd largest fabrication industry in India, following merely to fabrics. It is amongst the cost effectual industries in the universe with a turnover of about Rs. 2000 billion. The industry supports about 30 % of the Indian population straight or indirectly.
With such voluminous trades it is natural that everyone connected with it, be he a jobber, retail merchant, transporter or purchaser, faces some obstructions straight or indirectly. To take these obstructions some Sugar Portals have come up in India. Trade through a sugar Portal increases the propinquity and helps in finalising a trade from the remotest comers of the Earth. Deals can be concluded quicker through the portals which aim at B2B and B2C e-commerce. Processing of sale-offers and purchase offers, order verification, charge and payments are made online. With the aid of the promotions in information Technology a new dimension is being given to the normal sugar trade pattern by switching the scene from the traditional Auction Halls, Mandis and Bazaar to the online shelf and doing this trade good easy low-cost.
In April 2001, the Government of India ‘s Cabinet Committee on Economic Affairs ( CCEA ) and the Ministry of Food permitted hereafters merchandising in white sugar to stabilise the market and safeguard the involvement of husbandmans, stockists and exporters.
Sugar was approved for hereafters merchandising in May, 2001. At present, three national exchanges viz. National Commodity and Derivative Exchange Ltd. ( NCDEX ) , Mumbai, Multi Commodity Exchange Ltd. , ( MCX ) , Mumbai, National Multi Commodity Exchange ( NMCE ) , Ahmedabad and E sugar India Ltd. , Mumbai & A ; E-Commodities Ltd. , Delhi have been given acknowledgment for future trading in sugar. Except, E-Commodities Ltd. , Delhi, trading in sugar is taking topographic point in all other exchanges. Bulk of the hereafters trading in sugar takes topographic point at NCDEX. The volume of trading in sugar during the last three old ages is as given below:
Increasing sugar production – cut downing inefficiencies, likely consolidation in industry.
Addition in cane production – inducements to husbandmans – shift to other harvests.
Restriction in cane production – Output, Climate.
Adding capacities – new refineries.
The above figure shows the tendency of universe sugar future monetary values from December 2010 to projected figures for October 2011. It shows a worsening tendency which means supply of sugar will be more due to good climatic projections in major bring forthing states taking to lift in stocks and therefore lowering of monetary values. But seeing the volatility of market they can turn out incorrect as any climatic or authorities break can take to a deficit in supply and therefore gyrating up the monetary values.