India is one of the largest producers of sugar, just after Brazil. Economic growth and urabanisation have both increased the consumption of the sweetener.
In the last couple of years, the sugarc
ane production has been on the rise. Cultivating sugarcane is lucrative as the gross return per hectare is among one of the highest at Rs 50,000 per hectare, partly due to firm prices of both cane and sugar, making sugarcane production profitable. Production in 2003-04 fell post-drought but this was temporary.Production, Demand and Supply of sugar in India
Sugar production in India is cyclic but last two season saw and unimaginable jump in sugar production. Suitable weather and healthy cane realization led to huge jump in sugarcane production.
Sugar exports and imports
Ø A recent survey estimates that approximately 4 million tones will be exported in this period of glut and low prices.
Ø Last year about 1.5 million tonne of sugar was exported.
Ø This year, 1.7 mmt has already been contracted and is due to be exported during Jan-April 2008. Most of it is raw sugar and predominant buyer is Al-khaleej of Dubai.
Ø Some sugar (Plantation white) is expected to move to Middle East, Bangladesh, Indonesia and Sri Lanka.
Ø More than sugar prices, it’s the freight factor, which is making Indian sugar competitive in the global market inspite of Rupee appreciation. Low price of Brazil is nullified which even lower freight from India to main destination markets like Middle East and Africa. However quality buyer are sticking to Brazilian sugar only.
Ø India’s biggest market Pakistan is less likely to import due to sufficient domestic production (3.6 mmt).
