Sugar Industry in India

The sugar industry in India acts as a source of livelihood for 50 million farmers and their families The sugar industry in India acts as a source of livelihood for 50 million farmers and their families

The sugar industry in India is a regulated sector and acts as a source of livelihood for 50 million farmers and their families. It provides direct employment to over 5 lakh skilled labourers. These industries also employees semi-skilled labourers in sugar mills and allied industries across the nation.

As per a report published by credit rating agency Infomerics Valuation and Rating, the sugar industry in India looks very encouraging but might have some persisting concerns that need urgent attention. The focus needs to shift towards providing solutions in regard to Fair and Remunerative Price (FRP), Minimum Support Price (MSP) and cane arrears.

The report highlighted that the sugar production for the sugar season 2021 was 310 lakh metric tonnes (LMT). State-wise mill sugar production in India also increased from 27 million metric tonnes in 2019-20 to 31 million metric tonnes in 2020-21. Here is the list of states where sugar mills are present:

Serial No. States
1 Andhra Pradesh
2 Bihar
3 Gujarat
4 Haryana
5 Karnataka
6 Kerala
7 Madhya Pradesh
8 Maharashtra
9 Punjab
10 Rajasthan
11 Telangana
12 Tamil Nadu
13 Uttar Pradesh
14 Uttarakhand
15 Assam
16 Orissa
17 Nagaland
18 West Bengal
19 Goa
20 Chattisgarh
21 Puducherry

Sugar exports surpassed the 5 million tonne mark in early August with Indonesia being the biggest buyer. The report added that the Fair and Remunerative Price (FRP) increased to Rs 290 per quintal for sugar season 2022.

While the sugar industry is growing and reforms are being made, yet there is a difference between the Sugar Industry of Northern and Peninsular India. As the conditions are better in peninsular India, the sugar industry is gradually shifting from north India to peninsular India.

Some of the major observations are:

  1. Peninsular India has a tropical climate that gives a higher yield per unit area than north India.
  2. The sucrose content is also higher in the tropical variety of sugarcane in the south.
  3. The crushing season is also much longer in the south than in the north. For example, the crushing season is for nearly four months only in the north from November to February, whereas it is for nearly 7-8 months in the south where it starts in October and continues till May and June.
  4. The co-operative sugar mills are better managed in the south than in the north.
  5. Most of the mills in the south are new which are equipped with modern machinery.

Apart from the shift, there are certain challenges also which need to be addressed:

  1. Low Yield of Sugarcane
  2. Short crushing season
  3. Fluctuating Production Trends
  4. Low rate of recovery
  5. High cost of Production
  6. Small and uneconomic size of mills
  7. Old and obsolete machinery
  8. Competition with Khandsari and Gur
  9. Regional imbalances in the distribution
  10. Low per capita consumption

Future of Sugar Industry in India

As per the reports, the sugar market is projected to achieve a 4.3% Compound annual growth rate(CAGR) between 2020 and 2025. Government policies are changing as per the situation and helping the sector grow. India is expected to witness a peak in its sugar production during the forecast period.

While sugar production is growing, the selling of sugar cane in mandis have also increased. To manage this high demand and simultaneously generate bills, managing inventory and keeping a check on payments is a challenge. Understanding the concerns of commission agents and turning them into an opportunity, Bijak which is India’s Number 1 Agritrading App, came up with a solution called ChargeERP.

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