Literature review

india has been known as the original home of sugar and sugarcane. Indian mythology supports the above fact
as it contains legends showing the origin of sugarcane. India is the second largest producer of sugarcane next
to Brazil. Presently, about 4 million hectares of land is under sugarcane with an average yield of 70 tonnes per
hectare.

India is the largest single producer of sugar including traditional cane sugar sweeteners, khandsari and Gur
equivalent to 26 million tonnes raw value followed by Brazil in the second place at 18.5 million tonnes. Even in
respect of white crystal sugar, India has ranked No.1 position in 7 out of last 10 years.

traditional sweeteners Gur & Khandsari are consumed mostly by the rural population in India. In the early
1930’s nearly 2/3rd of sugarcane production was utilised for production of alternate sweeteners, Gur &
Khandsari. With better standard of living and higher incomes, the sweetener demand has shifted to white
sugar. Currently, about 1/3rd sugarcane production is utilised by the Gur & Khandsari sectors. Being in the
small scale sector, these two sectors are completely free from controls and taxes which are applicable to the
sugar sector.

The advent of modern sugar processing industry in India began in 1930 with grant of tariff protection to the
Indian sugar industry. The number of sugar mills increased from 30 in the year 1930 - 31 to 135 in the year
1935-36 and the production during the same period increased from 1.20 lakh tonnes to 9.34 lakh tonnes under
the dynamic leadership of the private sector.

The era of planning for industrial development began in 1950-51 and Government laid down targets of sugar
production and consumption, licensed and installed capacity, sugarcane production during each of the Five
Year Plan periods. The targets and achievements during various plan periods are given below.

The discovery of sugarcane, from which sugar as it is known today, is derived dates back unknown thousands
of years. It is thought to have originated in New Guinea, and was spread along routes to Southeast Asia and
India. The process known for creating sugar, by pressing out the juice and then boiling it into crystals, was
developed in India around 500 BC. Its cultivation was not introduced into Europe until the middle-ages, when it
was brought to Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to
thrive in a most favorable climate.

It was not until the eighteenth century that sugarcane cultivation was began in the United States, where it was
planted in the southern climate of New Orleans. The very first refinery was built in New York City around 1690;
the industry was established by the 1830s. Earlier attempts to create a successful industry in the U.S. did not
fare well; from the late 1830s, when the first factory was built. Until 1872, sugar factories closed down almost
as quickly as they had opened. It was 1872 before a factory, built in California, was finally able to successfully
produce sugar in a profitable manner. At the end of that century, more than thirty factories were in operation in
the U.S.

The Indian sugar industry uses sugarcane in the production of sugar and hence maximum number of

the companies is likely to be found in the sugarcane growing states of India including Uttar

Pradesh, Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Andhra Pradesh. Uttar Pradesh

alone accounts for 24% of the overall sugar production in the nation and Maharashtra's

contribution can be totaled to 20%.

There are 453 sugar mills in India. Co-operative sector has 252 mills and private sector has

134 mills. Public sector boasts of around 67 mills.

Sugar consumption rate is highest in India as shown in the statistics received from USDA

Foreign Agricultural Service. However, as per production is concerned, India has notched up

2nd position following Brazil, the largest sugar producer in the world.

Beginning of Sugar Industry in India

Sugar is made from sugarcane, which was arguably discovered thousands of years ago in New Guinea. From
there, the route was traced to India and Southeast Asia. It was India which began producing sugar following
the process of pressing sugarcane to extract juice and boil it to get crystals.

It was in 1950-51 the government of India made serious industrial development plans and set the targets for
production and consumption of sugar. It projected the license and installment capacity for the sugar industry in
its Five Year Plans.

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 followed in Sugar Industry 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

NEW DELHI: Anticipating better production in 2010-11 sugar year starting next month, the
government may cut the quantity of sugar that mills have to contribute for supply through ration
shops to 12 per cent of country's total output from the current 20 per cent.

"We are seriously considering to cut the levy sugar obligation on mills from the current level to 12
per cent in anticipation of higher production in 2010-11 season," a senior Food Ministry official
said.

The revised levy obligation would be effective from the new season starting October 1, the official
said. The sugar year runs from October to September.

The government had raised the percentage of levy sugar to 20 per cent in 2009-10 in the wake of
lower production.

Sugar production of India, the world's second largest producer, is expected to be more than 23
million tonnes in the 2010-11 against 18.8 million tonnes in the previous year, Food and
Agriculture Minister Sharad Pawar had said last week.

The government requires 2.7 million tonnes of sugar for supply through ration shops. At projected
production for the next year, the levy percentage of 12 per cent would be enough to meet the
requirement of public distribution system (PDS).
At present, the government is buying levy sugar from mills at an average rate of Rs 17.06 a kg and
selling the same at Rs 13.50 per kg to poor through ration shops.

Sugar industry body ISMA have been demanding cut in levy sugar as this would result in more
quantity for sale in the open market.

Sugar output may rise 28% to 24 mn tonnes in 2010-11

Press Trust of India / New Delhi September 23, 2010, 18:54 IST
Sugar production may increase by over five million tonnes to touch 24 million tonnes in 2010-11 sugar year
starting next month owing to higher cane output, Food and Agriculture Minister Sharad Pawar today said.

The country is estimated to produce 18.8 million tonnes in 2009-10 sugar year ending this month. Sugar year
runs from October to September.

"Sugarcane area is much more than last year and production of sugar will be more than 23 million tonnes. I
will not be surprised if it touches 24 million tonnes," Pawar told reporters here.

He noted that excess rains in northern India would affect the crop, rather it would boost yield.

According to the first advance estimate released by the government today, sugarcane production is expected
to rise 17 per cent to 324.9 million tonnes in 2010-11 crop year.

Higher output in the next season would enable the sugar mills to meet their export obligation of nearly one
million tonnes. Besides, it is likely to put downward pressure on the prices, which has crashed by 40 per cent
since mid-January when it reached a record Rs 48 per kg in the national capital.

Sugar production in India, the world's second largest producer and biggest consumer, is likely to outstrip
annual demand of 23 million tonnes after a gap of two sugar year.

In 2008-09 sugar year, production declined to 14.7 million tonnes from 26.3 million tonnes in the previous
year. The output has rebounded in the current year to 18.8 million tonnes.

Lower production forced the government to allow duty-free sugar import to boost domestic availability. The
country has imported about five million tonnes of sugar since February 2009. The duty-free import is valid till
December 2010 and the industry is demanding imposition of duty to check the sliding prices.
http://www.scribd.com/doc/14120220/SUGAR-PPT

http://economictimes.indiatimes.com/markets/commodities/Govt-mulls-cuts-in-sugar-
mills-contribution-towards-PDS/articleshow/6593812.cms
1. www.sugarindustry.com/
2. www.business.mapsofindia.com/sugar-industry/
3. http://www.business-standard.com/india/news/sugar-output-may-rise-28-to-
24-mn-tonnes-in-2010-11/109713/on