Sugar Industry of India

Sugar Industry of India

India is the world’s largest producer of sugarcane and second largest producer of sugar after Cuba. But India becomes the largest producer if gur and khandsari are also included.

Historical background

India has a long tradition of manufacturing sugar. References of sugar making by the Indians are found even in the Atharva Veda. India is rightly called the homeland of sugar. But in ancient times, only gur and khandsari were made and modem sugar industry came on the Indian scene only in the middle of the 19th century, when it was introduced by the Dutch in North Bihar in about 1840.  Unfortunately, this attempt could not succeed. The first successful attempt was made by the indigo planters at the initiative of Britishers in 1903 when Vacuum pan mills were started at Pursa, Pratabpur, Barachakia and Marhowrah and Rose in north-eastern U.P. and the adjoining Bihar.

This happened when demand for indigo ceased to exist due to the introduction of synthetic blue in the market. In the early years of the 20th century, the industry grew rather sluggishly and there were only 18 mills in 1920-21 and 29 mills in 1930-31. The industry got a great fillip after the fiscal protection in 1931 and the number of mills rose to 137 in 1936-37. The production also shot up from 1.58 lakh tonnes to 9.19 lakh tonnes during the same period.

Localisation of Sugar Industry

Sugar industry in India is based on sugarcane which is a heavy, low value, weight losing and perishable raw material. Sugarcane cannot be stored for long as the loss of sucrose content is inevitable. Besides, it cannot be transported over long distances because any increase in transportation cost would raise the cost of production and the sugarcane may dry up on the way.

It is estimated that 50 per cent cost of production is accounted for by sugarcane alone. Normally, it requires about 100 tonnes of sugarcane to produce 10-12 tonnes of sugar. Even today most of sugarcane is transported with the help of bullock carts and cannot be carried beyond 20-25 km.

Difference between the Sugar Industry of Northern and Peninsular India

There are marked differences between the sugar industry of the northern and the peninsular India. As a result of better conditions prevailing in the peninsular India, the sugar industry is gradually shifting from north India to the peninsular India.

This is evident from the fact that previously north India used to produce about 90 per cent of India’s sugar which is reduced to 35-40 per cent now. A brief description of differences between the sugar industry of the northern and peninsular India is given below:

  • Peninsular India has tropical climate which gives higher yield per unit area as compared to north India.
  • The sucrose content is also higher in tropical variety of sugarcane in the south.
  • The crushing season is also much longer in the south than in the north. For example, crushing season is of nearly four months only in the north from November to February, whereas it is of nearly 7-8 months in the south where it starts in October and continues till May and June.
  • The co-operative sugar mills are better managed in the south than in the north.
  • Most of the mills in the south are new which are equipped with modern machinery.

Problems of Sugar Industry

Sugar industry in India is plagued with several serious and complicated problems which call for immediate attention and rational solutions. Some of the burning problems are briefly described as under:

Low Yield of Sugarcane

Although India has the largest area under sugarcane cultivation, the yield per hectare is extremely low as compared to some of the major sugarcane producing countries of the world. For example, India’s yield is only 64.5 tonnes/hectare as compared to 90 tonnes in Java and 121 tonnes in Hawaii.

This leads to low overall production and results in short supply of sugarcane to sugar mills. Efforts are being made to solve this problem through the introduction of high yielding, early maturing, frost resistant and high sucrose content varieties of sugarcane as well as by controlling diseases and pests which are harmful for sugarcane.

Short crushing season

Manufacturing of sugar is a seasonal phenomena with a short crushing season varying normally from 4 to 7 months in a year. The mills and its workers remain idle during the remaining period of the year, thus creating financial problems for the industry as a whole. One possible method to increase the crushing season is to sow and harvest sugarcane at proper intervals in different areas adjoining the sugar mill. This will increase the duration of supply of sugarcane to sugar mills.

Fluctuating Production Trends

Sugarcane has to compete with several other food and cash crops like cotton, oil seeds, rice, etc. Consequently, the land available to sugarcane cultivation is not the same and the total production of sugarcane fluctuates. This affects the supply of sugarcane to the mills and the production of sugar also varies from year to year.

 Low rate of recovery

It is clear from Table 27.29 that the average rate of recovery in India is less than ten per cent which is quite low as compared to other major sugar producing countries. For example recovery rate is as high as 14-16 per cent in Java, Hawaii and Australia.

High cost of Production

High cost of sugarcane, inefficient technology, uneconomic process of production and heavy excise duty result in high cost of manufacturing. The production cost of sugar in India is one of the highest in the world. Intense research is required to increase the sugarcane production in the agricultural field and to introduce new technology of production efficiency in the sugar mills. Production cost can also be reduced through proper utilisation of by- products of the industry.

Old and obsolete machinery

Most of the machinery used in Indian sugar mills, particularly those of Uttar Pradesh and Bihar is old and obsolete, being 50-60 years old and needs rehabilitation. But low margin of profit prevents several mill owners from replacing the old machinery by the new one.

Regional imbalances in distribution

Over half of sugar mills are located in Maharashtra and Uttar Pradesh and about 60 per cent of the production comes from these two states. On the other hand, there are several states in the north-east, Jammu and Kashmir and Orissa where there is no appreciable growth of this industry. This leads to regional imbalances which have their own implications.




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