Sugar Industry in India

India is the largest producer and consumer of sugar in the world after Brazil. India is not a net exporting country for sugar. The major sugar producing states of India are Uttar Pradesh, Bihar, Maharashtra, Tamil Nadu, Karnataka, and Andhra Pradesh, Sugar moves from the surplus states to the deficit states of India. Sugarcane is a raw material for the sugar industry and the end products are raw sugar, white sugar, molasses and bagasse. From molasses the rectified spirit is produced for alcohol industry and for chemical industry. While from bagasse the electricity is generated through boilers. Raw sugar is also known as brown sugar which is directly consumed or further refined to produce white sugar. White sugar in India is sold on the basis of its grain size and colour. Normal grain size in India is medium known as M grade and small known as S grade.

Consumption of sugar is currently estimated to be 22 to 23 million tonnes. Hypothetically, it was assumed that consumption will grow with a growth in population but with a change in eating habits of middle class and with an improvement in per capita income people have become health conscious. Thus the demand in India for sugar has stagnated from 22 to 23 million tonnes for last 5 years whereas production in this crop year (October 12 to September 13) is estimated at 25 million tonnes. However the production in India has fluctuated for eg: in year 2009-10 the production of sugar was 19 million tonnes, it is said that after every three years India has shortfalls or surpluses in production. When we have surpluses we take out the surplus through export route and the case of shortfall we import sugar. In year 2009-10 India had imported 4 million tonnes of sugar. In current crop year there is over supply in the market that is demand Is less than the production. Out of the total demand in India approximately 60-70 % is demanded by the institutions and 10 % by the state government for public distribution system. Rest is supplied to the traders (for the retail market) and exports.

In India, government policies, both at the Centre and State level, had played a crucial role in the development of the sugar industry. Earlier the sugar industry in India was highly regulated, starting from sugarcane to the end-product sugar but now it is de- controlled. However, the cane pricing is still controlled by state and central Govt.. The main objective of national policies are to ensure a fair price to sugarcane growers, adequate returns to industry and a supply of sugar to consumers at reasonable prices.