5UPPLY CHAIN OF 5UGAR

Scheme
Agriculture perspective
ndustrial Perspective
Use:
Molasses: alcoholic origin
Ethanol
Scheme
Agriculture perspective
ndustrial Perspective
Use:
Molasses: alcoholic origin
Ethanol
Agricultural perspective
Sugar is extracted from two different raw materialssugarcane and beet.
Both produce identical refined sugar.
Sugarcane is grown in semi-tropical regions, and accounts for around two-thirds of
world sugar
production. Beet is grown in temperate climates, and accounts for the balance one
third of world production.
n ndia, sugarcane is the key raw material for the production of sugar.
Most of the sugarcane produced in ndia is a 10-12 month crop planted during January
to March. n northern Maharashtra and parts of Andhra Pradesh and Karnataka, there
is also an 18 to 20 month crop. n most areas, the 12-month crop is followed by just
one ratoon crop, that is, a new crop grown from the stubble of the harvested crop.
At present, sugarcane is being cultivated throughout the country except in certain hilly
tracts in Kashmir, Himachal Pradesh, etc.
The sugarcane growing areas may be broadly classified into two agro-climatic
regionssubtropical and tropical.
The major sugarcane producing states in the sub-tropical areas include Uttar Pradesh
(UP), Uttaranchal, Bihar, Punjab, and Haryana. n tropical areas of ndia, sugarcane is
grown primarily in Maharashtra, Andhra Pradesh (AP), Tamil Nadu (TN), and Gujarat.
Agricultural perspective
India - origin of Sugar & Sugarcane
Indian sugar industry - important agro based industry
Second Iargest producer of Sugarcane, next to BraziI
Dependents - 45 MiIIion peopIe (7.5% of ruraI popuIation)
35 miIIion farmers &
Area under Sugarcane: 4.5 M Ha (2.2 % of India's totaI cropped area)
70 tonns per hectare ( Around 355,520,000 tonns per year )
Sugar industry accounted for 1.91% of industry GBC of SCBs.
46 % - White CrystaI
34 % - Khandsari / Gur
10 % - Juice
In India it is the second Iargest agricuIturaI industry after textiIe industry
EmpIoys 0.5 M skiIIed & semi skiIIed workers
Total cane produced in the country value at about Rs.30000 crores per year
1% Of GDP
Rs.1650 crores to the Central Exchequer as excise duty and other taxes
Rs.600 crores is realized by the State Governments annually through purchase tax
and cess on cane
10 miIIion empIoyment generated
2006 - 08, 9.5 miIIion tonnes of sugar exported
Average capacity of miII 3200 tons per day
Sector Number
Co operative 317
Private 229
PubIic 62
TotaI 608
ndustrial perspective
. ndia has 20% of the total sugar mills in the world and accounts for about 15% of the
global production.
ear Area (M Ha)
Cane Production
( M Tons)
2001-02 4.41 297
2002-03 4.36 282
2003-04 3.99 236
2004-05 3.75 232
2005-06 4.14 267
2006-07 4.25 280
2007-08 4.5 290
2008-09
2009-10
2010-11
Growth of Indian Sugar Industry
Sugar Production
( M Tons)
Process of refining
"sugar is produced in the fieId and extracted in the sugar factory"
1. Pressing of sugarcane to extract the juice.
2. Boiling the juice until it begins to thicken and sugar begins to crystallize.
3. Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar.
4. Shipping the raw sugar to a refinery where it is washed and filtered to remove
remaining non-sugar ingredients and color.
5. Crystallizing, drying and packaging the refined sugar
In fact, sugar recovery mainIy depends upon foIIowing three factors
1. Sucrose content in sugarcane
2. Cane suppIy arrangement &
3. PIant and machinery.
Capacity utilization Sugar industry depends on
1. Volume of cane crushed in a day
2. Recovery rate which generally depends on the quality of the cane and
3. Length of the crushing season
varlous roducLs from Suaarcane
Sugarcane
Gur
Molasses Baggasses
-Most popular in
ndia
- Larger part of the
sugar cane was used
for making Gur .
- ts used in Ayurvedic
medicine
- Used as cattle food
- Used in alcohol
industries
- Used in production of
ethanol
-Used as replacement
-of coal in specialized
boilers
- Used to produce elctricity
- Used for producing paper
and ceiling
2006-
07
2007-
08
2008-
09
Per
head
use
MiIIion Tonns Kgs
UP 5.4 6.3 9.65 35.2
MH 2.2 5.2 9.3 40.9
KA 1.1 1.9 2.4 23.3
TN 1.1 1.8 2.6 29.1
AP 0.9 1.2 1.4 40.9
GUJ 0.8 1.1 1.4 68.5
PUN 0.3 0.3 0.5 71.5
Sugar Map of ndia
6 states contribute to
85% of production
Sugar is produced in 122 countries ( 67 from Cane, 55 from Beet )
78 % of sugar is produced from Cane, baIance from Beet
2007-08 2006-07 2005-06 2004-05 2003-04
BraziI 34.2 32.6 32.6 27.7 26.1
India 28.5 30.7 21 14 14.8
EU 17.5 17.4 21 22 20
China 13.6 13 10 10 11
USA 7.6 7.6 6.7 7 8
ThaiIand 7.9 7 5 5.4 7
Mexico 5.6 5.5 5.5 6 5.3
Others 68 68.3 67.1 65.1 64.3
TotaI 182 182 169 157 156
Global Production
World consumption of cane sugar 160 mt estm
Productivity
ndian Sugar Balance
SS05E SS06E SS07E SS08E SS09E SS10E SS11E SS12E
miIIion tonnes
OPENING STOCK 8.5 4.9 3.4 9.2 8.7 3.2 2.9 3.3
PRODUCTION 12.7 19.3 28.4 26.4 14.5 18.5 25 29
IMPORTS 2.1 0 0 0 3 5 0 0
CONSUMPTION 18.5 19.6 20.8 22 23 23.8 24.6 25.3
EXPORTS 0 1.1 1.7 4.9 0 0 0 0
CLOSING STOCK 4.9 3.4 9.2 8.7 3.2 2.9 3.3 7
World Sugar Balance
Competitive Edge
MARKET PRICE M S P
RICE WHEAT COTTON SUGAR RICE WHEAT COTTON
SUGAR
CANE
Rs/
QuintaI
Rs/
QuintaI
Rs/kg
Rs/
QuintaI
Rs/
QuintaI
Rs/
QuintaI
Rs/
QuintaI
Rs/
QuintaI
1999-00 914 742 34
2000-01 909 846 31
2001-02 897 1008 36
2002-03 859 1126 39
2003-04 920 1107 41 1356
2004-05 1061 962 42 1681
2005-06 981 1074 37 1848 570 650 1760 80
2006-07 1040 1496 40 1755 580 750 1770 80
2007-08 1226 1435 47 1384 645 1000 1800 81
2008-09 1417 1571 70 1788 8550 1080 2500 81
2009-10 1599 1650 67 2994 950 1100 2500 108
5yrs
GROWTH 61 65 55 62 60 59 70 74
World Sugar Balance
2008/09
(min tonne, raw
vaIue)
2007/2008
(min tonne, raw
vaIue)
Production 161.527 168.611
Consumption 165.801 162.241
sLaLlsLlcs
Ethanol in Brazil
n 2008 Brazil produced 24.5 billion litres of ethanol
Brazil is 2nd largest producer of ethanol.
37.3% of world's total ethanol used as fuel.
45% Brazilian vehicles uses ethanol.
Ethanol made from sugar cane would be "100% green".
Ethanol reduces emissions of carbon monoxide, toxic chemicals - resulting in better
overall air quality. With second largest in sugarcane ndia can produce around 4476
gallons per year. But....ndia imports 70% of its annual crude petroleum required which
is approx. 110 million tons. Expenditure on crude purchase is in the range of Rs 1600
billion per year.
Country 5ugarcane
product|on |n tonnes
roduct|on of
Lthano| |n ga||ons
razll 314 4
ndla 3333
Strengths:
Socio economic development in rural ndia.
Diversified crops and cropping patterns.
Favourable environmental conditions
2.7% of land is used in Cane Production
4
th
lowest cost sugar producers 1/4
th
of that in Europe
Strong Govt support
Ever lasting demand Global prices to move up
incremental positive
Weaknesses:
Obsolete technology & Lack of professionalism
Old and inefficient methods of cane production.
Shortage of cane supply
Unreliable weather - sometimes
Diversion of cane to unorganised sector
Farmer shift to paddy, wheat, oil seeds, puses...
Transport delay
S W O T
A
N
A
L
Y
S

S
Opportunities:
Rising prices & Huge export orders
Ongoing increase in demand year after year
Upgraded technology fullest By-product utilization
New varieties
Shift of Brazil to ethanol production
ndia includes Sugar as essential commodity
Threats:
Political interests
Sugar production being more volatile rather cane production
Ground water availability (farmers shifted to multiple crops)
Droughts
Pest & diseases
S W O T
A
N
A
L
Y
S

S
Due to heavy government intervention over price fixation Sugar has never been a
profitable product and the main source of profiteering for the sugar mills comes
from selling byproduct likes molasses, ethanol
Good Agricultural Practices
Water is major problem.
25,000 kg of water to produce 100 kg of sugarcane.
n Maharastra - 60% of water is used to irrigate 500,000 hectares
of sugarcane
- This means other crops get little water or no water at all.
Sustainable Sugarcane nitiative (SS)
mproving the productivity of land, water, and labour
Reduce crop duration, providing factories a longer
crushing season
Produce at least 20% more sugarcane while
reducing water by 30% and chemical inputs by 25%.
Growing sugar cane amongst paddy and vegetable crops
Developed a way to open up canes to allow more light ,
plus increase production for a smaller plant out.
Decrease water wastage, kill monoculture, provide extra
income.
Growing Biodynamic Sugar cane in ndia
Factors affecting productivity
Low cost management practices
Water management
Dearth of good quality saplings
Drainage raised beds
mproved timeliness of operations
Field preparation
Variety selection
Weed control
Balanced Fertilization
Harvesting
Crop rotation including legumes reduce N input after Soyabean
Need demand driven production
Supplying higher value markets
Value add to existing enterprises
ntroduce other enetrprises
Easy to say, but difficuly to implement
ntroduce other enterprises
water channels (three)
water channels (six)
water channels (two)'
Farmers nnovation
75% water reduction, without use of chemicals and pesticides.
4 Lonnes per acre can be ralsed Lo Lonnes
Major Strategies & their Impact on Indian sugar Industry:
Sugarcane Pricing poIicy
Govt ControI on Sugar
Govt poIicies
Govt reIief to sugar industry & farmers
CentraI govt announces support measures for sugar miIIs.
Government declared the new policy on August 20,1998
licenses for new factories, which shows that there will be no
sugar factory in a radius of 15 km.
Setting up of ndian nstitute of Sugar Technology at Kanpur
n 1982, the sugar development fund was set up for
modernization of the industry.
ndia has the potential to become world's largest exporter by
removing the missing leads.
ndian Government on Sugar ndustry
Thank you