Sugar Industry in India

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After Brazil, India is the largest sugar producer in the world and it leads in sugarcane production. However, if alternative sweeteners such as khandsari (sort of raw sugar) and gur (jaggery) are included in the fold, then India would be the largest overall producer of sugar. Brazil accounts for approximately 22 percent of the global sugar production and India contributes almost 14 percent.

In all, approximately Rs. 1,250 crore is invested in this industry and it also provides livelihood for close to 2.86 lakh workers. The industry also benefits the nearly 2.5 crore people who grow sugarcane in India. In India, the major sugar producing states are Maharashtra, Gujarat, Uttar Pradesh, Haryana, Tamil Nadu, Punjab, Karnataka, Bihar and Andhra Pradesh.

As may be seen from the list above, sugar production is practised all across India. However, the peninsular region has been a better performer than the north Indian states and there has also been a gradual shift from north to south for the sugar industry. One of the major reasons is the better conditions available for cultivation in the peninsular part. The sugar industry in India is also highly localized owing to problems in transporting sugarcane.

Types of Sugar Industry in India

The sugar industry can be divided into two sectors including organized and unorganized sector. Sugar factories belong to the organized sector and those who produce traditional sweeteners fall into unorganized sector. Gur and khandsari are the traditional forms of sweeteners.

Manufacturing Process of Sugar in India

Several steps are usually followed to produce sugar. 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

Sugar Production in India

In the 2014-15 crushing season, the sugar production of India has seen an increase of 11.5 percent. The Indian Sugar Mills Association (ISMA) says that as of 31st March, India had produced 24.72 million tonnes of sugar and this was an addition of 2.84 million tonnes to the sugar production of 2013-14. It is estimated that in the 2015-16 season, 24.8 million tonnes of sugar will be consumed. ISMA estimates that due to the increased production in the year gone by, there will be a carryover stock of 8.5 million tonnes. There will be 2.5 million tonnes more than what is thought to be the standard requirement in these cases.

It is expected that in 2017, Indians will be consuming almost 28.5 million tonnes of sugar. Maharashtra is traditionally the leader when it comes to sugar production in India. Before Maharashtra, Uttar Pradesh was the leader. There are several reasons as to why Maharashtra occupies this place in the pantheon of Indian states that produce sugar. The state has a longer crushing period compared to other states and its rate of recovery is also significantly higher.

Maharashtra currently has almost 25 percent of the sugar mills operating in India and it accounts for nearly 30 percent of the entire sugar produced in India. In fact, the sugar mills in Maharashtra are supposed to be the biggest in the country. Most of these mills are located at the river valleys in the western stretches of the Maharashtra Plateau. Ahmednagar is among the leading centre of sugar production along with Kolhapur, Pune, Satara, Nashik and Solapur.

Import and Export of Indian Sugar Industry

The Indian government has a rather strict policy when it comes to import of sugar. During 2014, it has raised the import duty from 15 percent to 40 percent with a view to discourage this side of the sugar trade and promote exports. Thanks to the increased import duty, refiners find it rather hard – economically unfeasible to be precise – to bring in sugar especially from countries such as Brazil, Pakistan and Thailand.

The Indian government provides a subsidy amounting to Rs. 4,000 per tonne with the aim to promote exports. This is provided for raw sugar shipments, where the volume is around 1.4 million tonnes. However, in spite of that, of late, Indian sugar industry has had a hard time in exporting raw sugar owing to the fact that prices have been consistently on a downward spiral. The situation is especially precarious at the market in New York, which is regarded as a benchmark.

Indian Sugar Industry Consumption

Consumption of sugar and related sweeteners in India has increased in the last few years. One of the major reasons for the increasing demand for sugar is the growing population of India as well as improving economic conditions. Majority of the consumers of the sugar that is produced directly by mills are bakeries, local sweets and candy manufacturers. Together with the soft drink makers, they comprise almost 60 percent of the clientele. The major consumers of khandsari are locally operating sweets establishments. Gur is also used in the rural areas in its normal form as a sweetener as well as feed. Biscuit manufacturers, food products companies, pharmaceutical setups, and hotels and restaurants also consume fair quantities of sugar.

Indian Sugar Industry Consumption – Impact on Indian Economy

As has been said already, almost 2.6 lakh people are directly dependent on the sugar industry for their livelihood. Sugar industry is an agricultural industry that still provides the maximum amount of employment in India. The sugar industry in India also happens to be the second biggest agro-based economic activity – a fact that goes on to show how important it is to sustain the national economy.

Last Updated on May 21, 2015