General Awareness

April 04, 2017 @ 01:15 PM

The Bitter pill of Sugar Industry

Published : Saturday, 30 August, 2014 1:40 PM
Dreaming for bright career is the first priority of a young student and rightly so; you have taken a right decision to do MBA but you are expected to know and understand or at least have some idea of different markets.
The Bitter pill of Sugar Industry
The Worth of Sugar Industries of India can be estimated to be around Rs.75000 crores. The sugar industry is the second largest agro –based industry with millions of people like farmers, middlemen, sellers, buyers, wholesalers, agents involved either directly or indirectly. India has around 660 sugar factories with an estimated annual sugar production of 30 million tons of sugar. India also accounts for around five million hectares of agricultural land under sugarcane cultivation. In terms of Sugarcane mills, India is placed first out of the world total of 2500.
What ails the sugar industry?
Domestic issues:
In India, about one third of the sugar cane productionsis utilized for domestic consumption, namely to make Jaggery for their own use, this causes shortage of raw materials for the sugar mills. The output of sugar is also influenced by the relationship between cane prices and jaggery price.
The Sugar industry has a seasonal character and the crushing season is about four to seven months a year, thus the mill and the workers involved in Sugarcane cultivation, production remain idle for the remaining term. This creates a financial burden on these workers. They in turn migrate to other places, seeking greener pastures while the mill owners might be forced to sell off his property to sustain himself.
Most of the mills, especially mills belonging to Uttar Pradesh and Bihar are very old. These mills are working with outdated and ancient machinery leading to low production of molasses. The low production reduces the amount of profit, the diminishing returns do not allow for the upgradation of machinery which again leads to lower profits. This vicious cycle continues making the unit sick.
Other Key Issues:
The inefficient and uneconomic nature of production in sugar mills coupled with low yield, heavy excise duties levied by the government are responsible for the high cost of production of sugar in India. Manipulation of stocks by sugar factories, hoarding by unscrupulous traders, black marketeering of sugar are choking the sugar production in India.
The low yield of sugar cane, short crushing season and unsatisfactory location of sugar mills creates low milling efficiency and the recovery of sugar from sugarcane is quite low. The reason is not only short crushing seasons , the sugar mills do not possess their own sugar cane plantation as is the case with the west indies nor are they situated nearby sugarcane plantation. The sugar cane most often dries up before getting transported to the sugar mill.
The sugar mills do not have control over quantity or quality and have to make do with whatever is brought to them by sugarcane farmers.The sugar industry is highly controlled one. There is a statutory minimum price (SMP) fixed by the central government, there is a state advised price fixed by State governments, which is in addition to the central government’s SMP. There is a levy to be paid. The government fixes export quotas.
This whole scheme of government control is not good for the health of the sugarcane industry. The government must review its policies in order to make sugar industry a globally competitive unit.
Stay informed, Stay ahead and stay inspired with 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