General Awareness

April 04, 2017 @ 01:15 PM

Indian Sugar Industry-Key driver of Rural India and job provider for Urban India

MBA aspirants must be updated with General Awareness on current topics. General awareness topics With analytically drawn conclusions will benefit You in WAT / Extempore Speech / Essay / GD & PI 

Today, you will read General Awareness Topic:
"Indian Sugar Industry-Key driver of Rural India and job provider for Urban India"
The Indian sugar industry is a key driver of rural development, supporting India's economic growth. The industry is inherently inclusive supporting over 50 million farmers and their families, along with workers and entrepreneurs of almost 500 mills, apart from a host of wholesalers and distributors spread across the country. 
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 jaggery Gur equivalent to 26 million tonnes raw value followed by Brazil in the second place at 18.5 million tonnes.
Indian sugar mills association has estimated around 24 million tones sugar production in 2012-13 seasons. Indian sugar industry is highly fragmented with organized and unorganized players. The unorganized players mainly produce Gur and Khandari, the less refined forms of sugar. The government had a controlling grip over the industry, which has slowly yet steadily given way to liberalization. The production sugarcane is cyclical in nature. Hence the sugar production is also cyclical as it depends on the sugarcane production in the country.
At present, the government controls the sugar industry right from fixing the support price of sugarcane and allocating the monthly quota for mills to sale in the open market. The government levies a fee of Rs.240 per ton of sugar produced by mills to raise a Sugarcane Development Fund (SDF), which is used to support research, extension, and technological improvement in the sugar sector. The SDF is also often used to support sugar buffer‐stocks operations, provide a transport subsidy for sugar exports, and provide an interest subsidy on loans for the installation of power generation and ethanol production plants.
Moreover, currently, sugar mills are obliged to sell 10 per cent of their produce at a regulated price for the government’s public distribution system. Currently, the average open-market price of sugar is Rs 36,000 a tonne, while the government pays only Rs 19,050 a tonne to the mills for levy sugar. This does not even cover the cost of sugarcane, the raw material, above which mills have to incur processing costs, interest cost and wages Moreover; cane price has been going up sharply year-on-year, while there has been no corresponding increase in levy price. While imposing a levy obligation, the government also follows a hawkish strategy towards open market sugar prices. Every time prices go beyond a certain level, the government intervenes with additional sale quota. Under release mechanism, it is the government that decides the quantity each mill can sell every month.
So, on the one hand the central and state governments increase sugarcane price every year, on the other the Centre does it bit to keep sugar prices under check even though several studies have pointed that more than 60 per cent of sugar is consumed by bulk buyers like beverage manufacturers, pharma industry and confectioners. 
Not just the price of sugar, but the price of sugar-cane is also regulated by the government through Statutory Minimum Price (SMP) which mill owners pay to the farmers. Thus, neither the price of sugar cane nor the price of sugar is determined by market forces leaving a very little elbow space for the industrialists. Since SMP determines the level of income of sugar-cane farmers, too low price of sugar cane may risk the lives of farmers, but somehow government may determine the price of sugarcane on the lines of minimum support price where if the market price of a crop falls below a certain level, government will buy any amount of crop at MSP. Though it may provide additional fiscal burden on the government but it may be instrumental in reforming the sugar industry. 
India is located close to major sugar deficient markets. The Indian Ocean countries of Indonesia Bangladesh, Sri Lanka, Pakistan, Saudi Arabia, UAE and some East African countries are sugar deficient and import sugar regularly. India has a natural freight advantage to these countries due to its geographical proximity. Historically, India has exported sugar to the identified deficient countries. In case of surplus domestic production, India can expect to export to these geographies. At present, these countries import primarily from Brazil, Thailand, EU and Australia. Thailand, Australia and South Africa are present in only a few of the target countries, while Brazil and EU supply sugar to most of these deficient markets. These geographies would be the key competitors for India in the future.
At the current cost of production and world raw sugar prices, the Indian exports of raw sugar looks unviable. However, the reduced cost of production and a sustainable cane price can improve India's competitiveness for global trade. To be able to export to the target markets, India would need to improve its cost structure through productivity and efficiency improvements in the long term. In addition, to export raw sugar, mills would need to make the necessary investments.
Currently, India only produces plantation white sugar. Considering that export demand for raw sugar and refined sugar will increase going forward, India would need to develop the capability to produce these varieties in order to leverage the export opportunity.
Update your GK and read General Awareness Topics, Stay informed and inspired at MBA Rendezvous

Crucial Dates, You Should not Miss

TAPMI, Manipal
Admission Application closes on January 16, 2018 for 2018-20
BIMTECH, Greater Noida
Admissions open for PGDM Programmes at BIMTECH. Apply Now !
Lal Bahadur Shastri Institute of Management
Admissions are Open at LBSIM, Delhi. Apply Now !
FORE School of Management
Apply for PGDM & PGDM-IB Programmes. Application Deadline is December 22, 2017.
Goa Institute of Management
PGDM Admissions Open at GIM. Apply Before January 5, 2018
Last Date to Apply for MBA (Full Time) Programme at NIRMA is January 09, 2018
XAT 2018
Application Last Date 30th November 2017
IMI New Delhi
Application closes 4th December 2017
XIM Bhubaneshwar
Last Date 8th December 2017
SIBM Bengaluru
Apply for SNAP 2017 to be held on Dec 17 and apply for SIBM-Bengaluru through the SNAP Form
Institute of Rural Management Anand
IRMASAT will be conducted on February 4,2018, Apply Before December 31,2017
IBSAT 2017
Last date for IBSAT registration is December 12 , 2017
Last date to register for SNAP is 24th November, 2017. Last date for SSBF is 2nd January 2018
SIBM Hyderabad
Apply for SNAP 2017 to be held on Dec 17 and apply for SIBM-Hyderabad through the SNAP Form
K J Somaiya Institute of Management Studies & Research, Mumbai
Last date for Application is 31st Jan, 2018
Application for PGDM 2018-20 at SDMIMD is open till February 28, 2018
Institute of Management Technology
Application closes on November 24, 2017
MDI Murshidabad
Application for PGPM 2018-20 at MDI Murshidabad is open till November 24, 2017

Admission Open Now

Following Colleges are accepting applications.


Admissions open for 2018-20

PGDM, PGDM (HRM), PGDM(B & FS), Executive PGDM

Apply Online