Indian
sugar market
India’s total sugar production in
2010/11 is forecast at 24.7 million tons (including 435,000 tons of khandsari
sugar), up 27 % from the 2009/10, on expected improved sugarcane supplies due
to higher cane planting and yields. Relatively strong cane prices vis-à-vis
last year and also compared to competing food crops (rice, wheat, pulses)
during the ongoing 2009/10 will support higher cane acreage. The acreage
forecast for 2010/11 is increased by 13 % to 4.8 million hectares. Assuming
normal monsoon and subsequent weather condition, yields are expected to improve
over last year’s adverse weather impacted crop. Consequently, 2010/11 sugarcane
production is forecast higher at 325 million tons compared to 282 million tons
in 2009/10.
The sugar production estimate for 2009/10 is revised higher to 19.5 million tons due to lower diversion of cane for production of alternative sweeteners (khandsari and gur) and better than anticipated cane production.
The mill sugar production for 2009/10 up to March 15, 2010 is
estimated at 15.3 million tons (crystal weight basis) compared to 13.3 million
tons for the corresponding period of 2008/09.
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As history foretells, India had been
connected to sugar for a long time. In fact, it is known as the place of
origin of sugar. India maintains this reputation of sugar connection by
producing the second largest quantity of sugar in the world and also being
the largest consumer of sugar. Indian sugar industry is the largest
processing industry for agricultural products constituting of both organized
and unorganized sectors.
India had been the largest producer of sugar in the world for 7 out of
10 years but now Brazil has taken a lead from India. Indian production from
both the sectors sums up to 22 million tons. Indian share in the world’s
total production has shown an increasing trend in the past few years and
currently India is contributing to around 16%. The country has been indulged
in the production of cane sugar rather than beet sugar as India’s tropical
weather conditions support sugarcane production. Maharashtra holds the lead
in the production of cane and sugar in the country. The consumption level of
sugar in India reaches up to 18.5 million tons annually making India the
largest consumer of sugar in the world. This demand and consumption level is
still showing a rising trend. The government largely controls the demand and
supply of sugar in India and the prices fluctuate according to the government
releases of sugar.
India had been an exporter of sugar but the export-import policy
depends on the production-demand mismatch in the country. The crushing period
difference between India and other countries gives an advantageous edge to
Indian exports. Exports from India show a rising trend as a result of the
upcoming policies of free international trade. The trade figures of India
correspond to the mark of 1.5 million tons. The Indian sugar industry has
successfully satisfied the domestic demand till now. That is why India no
imports of sugar were done during the past few years.
Market Influencing Factors
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