1. GLOBAL SCENARIO
Sugarcane is cultivated in 20.5 million ha in 121 countries.
15 countries such Brazil, India, China, Pakistan, Mexico, Cuba,
 Australia, Argentina occupy 86% of area with 87% of
production.
 Brazil (22%) is the major producer followed by India (15%) and
EU (11%).
Brazil, India and the EU control over 48% of the global sugar
production.
India is the largest consumer of sugar in the world

3. World Sugar Production
• India is the largest consumer and second largest producer of sugar in the world
with an annual turnover of more than ~USD 16 bn and capital investment of over
USD 20 Billion.
India Vs World Sugar Production (Mio Tons)
200 50.0%
180
160 40.0%
140
120 30.0%
100
80 20.0%
60
40 10.0%
20
0 0.0%
2011-12
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 (E)
World Sugar Production 141.1 151.4 167.4 166.6 154.9 160.5 168.9 173.34
India Sugar Production 12.69 19.26 28.36 26.35 14.53 18.91 24.52 26
India as % of world production 9.0% 12.7% 16.9% 15.8% 9.4% 11.8% 14.5% 15%
Source: Indian Sugar Mills Association,Handbook-09-10

5. Indian Sugar Industry – Overview
• Located in rural heartland, directly contributes to rural
economic development
 .Sector supporting 50 million farmers & their families –
around Rs. 55,000 crores cane price paid in 2010-11
 .Generates employment for around 12% of the entire rural
population (in major 9 sugar producing States)
• .One of the most environment friendly industry serving
several requirements
 .Supplying eco-friendly bagasse based energy for consumption
– approximate potential: 4000-5000 MW
 .Mainstay of alcohol industry and eco-friendly Ethanol
blending policy
• .Significant position in the global sugar space
 .Largest consumer and second largest producer in the world
 .World sugar prices impacted by India’s Export/Import
decisions

6. Indian Sugar Industry – Overview Contd.
World’s second largest sugar producer (24 million tonnes) with a total
investment of $11000 million. Around 4 million hectares of the country (around
2.7% of the total cultivated area) is under sugarcane production with an
average recovery around 10%.
 Country’s sugar production has been driven by factors like cane acreage,
yield, drawl recovery percentage, rainfall and the competitive advantage to
farmers over other crops

7. Indian Sugar Industry – Overview Contd.
The Indian sugar industry remains the second largest rural agro-
industry, with a Rs. 700 billion annual turnover, contributing almost
Rs. 22.5 billion to the central and state exchequer as tax, cess, and
excise duty annually..
 Besides, the industry employs around 2 million rural skilled/semi-
skilled workers, among others (Source: ISMA).
The Indian sugar industry is classified into organised and
unorganised sector. Sugar factories belong to the organized sector
and those who produce Gur and khandsari fall into unorganized
sector which accounts for 20% of the total production.

8. Indian Sugar Industry – Overview Contd.
There are 664 sugar factories in India widely dispersed over UP, Maharashtra
and in other States
Ownership of sugar sector –50% private sector and 50% in co-operative &
Govt. Sector
Average crushing capacity about 3500 TCD
Uttar Pradesh and Maharashtra produce 60% of sugar in India
Cultivation of cane largely monsoon dependent.
Sugar industry is seasonal where crushing season begins in October /
November and ends in April/May
Sugar industry has potential to play a major role in development of rural India.

9. Sugar Mills Composition
No. of factories in operation
• No of Sugar Mills = 634
- Private = 282 600
- Public = 64 501 516
488
– Co-operative = 288 500
437 453
• Mills operating = 503 (current) 385 453
• State wise distribution 400
315
412
- UP = 132 300
– MAH = 147 215
– KAR = 50 200 174
– AP = 35
– TN = 38 100
• Contribution by 5 states 82% of the
0
total production. 60-61 70-71 80-81 90-9196-97 00-01 05-06 06-0707-08 08-09 09-10
• The growth in the Indian sugar industry has been more driven by horizontal growth (increase in
number of units) rather than vertical growth ((increase in average capacity).
• The number of factories has increased from 29 in 1930-31 to 488 in 2008-09; while the average
capacity of the sugar mills has moved up from 644 ton per day in 1930-31 to ~3183 ton per day.
• The mills have capacity varying from 1,500 to 10,000 TCD. The capacities cannot be compared
with international average capacities due to the Indian sugarcane industry structure.
Source: Indian Sugar Mills Association,Handbook-09-10,Lakshya Analysis

10. WORKING SUGAR MILLS IN INDIA
(No of Installed mills 664)
Season/Details 2010-2011 2011-2012
Expected No. of 524 528
working sugar mills

11. → →
Surplus Lower
Higher Cane
Sugar Sugar
Availability
Production Price
↑
↓
Farmers
shift to
cane
Mills
↑
delay
SUGAR INDUSTRY payment
CYCLE to farmers
Mills
promptly
pay Farmers
↓
↑
Farmers
Sugarcane
Higher Sugar Sugar production shift to
← ← Availability ←
Realisation drops other
dims
crops 11

12. Classical Indian Sugar Cycle
NATURAL CYCLICALITY + INDUCED CYCLICALITY
• Rain & Drought Decline in
Higher sugar
• Pest and disease sugar prices
lower
production
Profitability
High
Higher
Sugarcane
sugarcane
Arrears
production
Improved Decline in area
profitability under cultivation
low lower sugarcane
sugarcane
arrears
production
Lower
sugar Lower
availability sugar
Increase in production
sugar
prices
Sugarcane payment arrears trigger the decline in sugar production and have a catalyzing
effect on cyclicality.

13. The Indian Sugar Cycle
(Figs in lakh tons)
SUGAR CANE SUGAR
YEAR PRODUCTION PRODUCTION
2000-01 2960 185.2
Cane Vs Sugar Production
4000 300
2001-02 2972 185.3
3500
250
2002-03 2874 201.4 3000
200
2003-04 2339 135.5 2500
2000 150
2004-05 2371 126.9
1500
2005-06 2812 192.7 100
1000
2006-07 3555 283.3 50
500
2007-08 3482 263.7
0 0
2008-09 2850 145.4
2009-10 2777 189.0
CANE PRODUCTION SUGAR PRODUCTION
2010-11 3404 245.2
2011-12(E) 3494 260
Source: Indian Sugar Mills Association,Handbook-09-10

14. Exports & Imports Sugar Cycle - A Continuous Phenomenon
Export Mn T
5.0
5.0
4.0
3.0
2.0 1.7
1.5
1.0 1.0 1.1 1.1
1.0 0.6 0.4 0.4
0.2 0
-
-0.1 -0.8 -1.0 -0.2 -1.3
-1.0 -0.3
-2.0
-3.0 -2.0 -2.1
-4.0
Import Mn T -4.1
-5.0
India contributes to the World Sugar Trade consistently in the last 20 yrs in the form of Imports or Exports
Source: Indian Sugar Mills Association,Handbook-09-10.

15. Sugar Production and Consumption
Sugar Production Vs Consumption
300 300.00
283.61 263.57 260
245.2
250 250.00
189.11
201.42
192.67 230.00 225.00 225
200 185.27 220.00 200.00
172.85 201.60
189.45 210.00
183.84 185.00
150 167.81 150.00
145.38
135.46 126.91
100 100.00
50 50.00
0 0.00
Year
Production Consumption
Source: Indian Sugar Mills Association,Handbook-09-10

16. India - Production Growth
Year Production Growth Consumption Growth
(Mn Tons) (CAGR) (Mn Tons) (CAGR)
1930-31 to 0.12 to 3.02 11.8% 0.12 to 2.09 10.4%
1960-61
1960-61 to 3.02 to 12.04 4.9 % 2.09 to 10.71 5.8%
1990-91
1990-91 to 12.04 to 25 3.9% 10.71 to 22 3.9%
2010-11
Source: Indian Sugar Mills Association,Handbook-09-10,Lakshya Analysis

17. Sweeteners Consumption
PER CAPITA CONSUMPTION
Year Sugar Gur & Total CAGR - Shift from Gur &
(Kg) Khandsari (Kg) Total Khandsari to Sugar
(Kg)
1960 - 61 to 4.8 to 15.2 to 20 to 23.8 0.6% 3.5%
1990 -91 12.9 10.9
1990 - 91 - 12.9 to 10.9 to 4.2 23.8 to 0.3% 2.6%
2010 - 11 21 25.2
GDP growth influence the life style and hence shift from Gur & Khandsari to Sugar.
So far, the increase in consumption largely addressed by horizontal growth but the
Scenario is changing from here and now.
Source: Indian Sugar Mills Association,Handbook-09-10,Lakshya Analysis