Sugar industry in india

Sugar Industry in India: Growth; Problems
and Distribution
Sugar Industry in India: Growth, Problems and Distribution!
Sugar can be produced from sugarcane, sugar-beet or any other
crop having sugar content. But in India, sugarcane is the main
source of sugar. At present, this is the second largest agro-based
industry of India after cotton textile industry.
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. This
industry involves a total capital investment of Rs. 1,250 crore and
provides employment to 2.86 lakh workers. In addition, 2.50
crore sugarcane growers also get benefit from this industry.
Growth and Development:
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.
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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.
The industry passed through an uncertain phase during and after
the World War II and some stability was experienced only after
1950-51. There were 139 mills producing 11.34 lakh tonnes of
sugar in 1950-51. After that, the plan period started and the
industry made rapid strides. In the year 1994-95, there were 420
mills producing 148 lakh tonnes of sugar.
Table 27.28 shows that the year to year figures reveal great
variations in production although there has been a steady increase
in production on the long term basis
Table 27.28 Production of Sugar in India (lakh tonnes):

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.
The introduction of tractor- trolleys, trucks and even railway
wagon have increased the distance covered by sugarcane to 70-75
kms. beyond which the transportation cost would increase
exorbitantly. Therefore, the sugar industry is established in areas
of sugarcane cultivation.
Distribution:
Figure 27.17 and Table 27.29 make it amply clear that sugar
industry has two major areas of concentration. One comprises
Uttar Pradesh, Bihar, Haryana and Punjab in the north and the
other that of Maharashtra, Karnataka, Tamil Nadu and Andhra
Pradesh in the south.
Table 27.29 Distribution of Sugar Industry in India, 2002-03:

Maharashtra:
Maharashtra has progressed a lot and captured first position from
U.P. to emerge as the largest producer of sugar in India. Large
production of sugarcane, higher rate of recovery and longer
crushing period are some of the factors which have helped the
state to occupy this enviable position.
The state has one-fourth of the total sugar mills and produces a
little more than one-third of the total sugar of India. Sugar mills
of Maharashtra are much larger as compared to the mills in other
parts of the country. The major concentration of sugar mills is

found in the river valleys in the western part of the Maharashtra
Plateau. Ahmednagar is the largest centre. The other major
centres are in the districts of Kolhapur, Solapur, Satara, Pune and
Nashik.

Uttar Pradesh:
Uttar Pradesh is the traditional producer of sugar and has been
occupying the first rank among the major sugar producing states
of India. However, its relative importance has been reduced
during the last few years and the state has conceded the top
position to Maharashtra and now occupies the second position.
Uttar Pradesh has more mills than Maharashtra but they are of
comparatively smaller size and yield less production.
Presently, the state accounts for about 24 per cent of the total
production of sugar in India. There are two distinct regions of
sugar production in this state. One region consists of Gorakhpur,
Deoria, Basti and Gonda in eastern Uttar Pradesh and the other
lies in the upper Ganga Plain consisting of Meerut, Saharanpur,
Muzaffamagar, Bijnore and Moradabad.
Tamil Nadu:
Tamil Nadu has shown phenomenal progress with regard to sugar
production during the last few years. High yield per hectare of
sugarcane, higher sucrose content, high recovery rate and long
crushing season have enabled Tamil Nadu to obtain highest yield
of 9.53 tonnes of sugar per hectare in the whole of India.
As a result of these advantages, the state has emerged as the third
largest producer of sugar, contributing over nine per cent of the
total sugar production of India. Most of the 32 mills of the state
are located in Coimbatore, North Arcot Ambedkar, South Arcot
Vallalur and Tiruchchirapalli.
Karnataka:
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Karnataka has 30 mills producing 1,151 thousand tonnes or over 6
per cent of the total sugar of India. Belgaum and Mandya districts
have the highest concentration of sugar mills. Bijapur, Bellary,

Shimoga and Chittradurga are the other districts where sugar
mills are scattered.
Andhra Pradesh:
Andhra Pradesh has more mills (35) than the neighbouring
Karnataka but produces only 6.01 per cent of India’s sugar. This
means that the mills are comparatively smaller. Majority of the
sugar mills are concentrated in East and West Godavari, Krishna,
Vishakhapatnam, Nizamabad, Medak and Chittoor districts.
Gujarat:
Gujarat’s 16 mills are scattered in Surat, Bhavnagar, Amreli,
Banaskantha, Junagarh, Rajkot and Jamnagar districts. The state
produces about 5.56 per cent of the total sugar produced in India.
Haryana:
Haryana has only 8 mills but their large size enables the state to
contribute 1.91 per cent of the total sugar production. Sugar mills
are located in Rohtak, Ambala, Panipat, Sonipat, Kamal,
Faridabad and Hissar districts.
Punjab:
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Punjab has a total of 13 mills which are located in Amritsar,
Jalandhar, Gurdaspur, Sangrur, Patiala and Rupnagar districts.
Bihar:
Bihar was the second largest sugar producing state next only to
Uttar Pradesh till mid- 1960s. Since then the state has been
experiencing sluggish growth and consequently lost its prestigious
position to the peninsular states like Maharashtra, Tamil Nadu,
Karnataka and Andhra Pradesh.
Its 28 mills make an insignificant contribution to the production
of sugar. The belt of eastern Uttar Pradesh extends further east in

Bihar and the districts of Darbhanga, Saran, Champaran and
Muzaffarpur are included in this belt.
Others:
Among the other producers are Madhya Pradesh (8 mills in
Morena, Gwalior and Shivpuri districts), Rajasthan (5 mills in
Ganganagar, Udaipur, Chittaurgarh and Bundi districts), Kerala,
Orissa, West Bengal and Assam.
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:
1. Peninsular India has tropical climate which gives higher yield
per unit area as compared to north India.
2. The sucrose content is also higher in tropical variety of
sugarcane in the south.
3. 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.
4. The co-operative sugar mills are better managed in the south
than in the north.

5. 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:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
For example, bagasse can be used for manufacturing paper pulp,
insulating board, plastic, carbon cortex etc. Molasses comprise
another important by-product which can be gainfully used for the
manufacture of power alcohol.
This, in its turn, is useful in manufacturing DDT, acetate rayon,
polythene, synthetic rubber, plastics, toilet preparations, etc. It
can also be utilised for conversion into edible molasses and cattle
feed. Press-mud can be used for extracting wax.
6. Small and uneconomic size of mills:
Most of the sugar mills in India are of small size with a capacity of
1,000 to 1,500 tonnes per day. This makes large scale production
uneconomic. Many of the mills are economically not viable.

7. 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.
8. Competition with Khandsari and Gur:
Khandsari and gur have been manufactured in rural India much
before the advent of sugar industry in the organised sector. Since
khandsari industry is free from excise duty, it can offer higher
prices of cane to the cane growers.
Further, cane growers themselves use cane for manufacturing gur
and save on labour cost which is not possible in sugar industry. It
is estimated that about 60 per cent of the cane grown in India is
used for making khandsari and gur and the organised sugar
industry is deprived of sufficient supply of this basic raw material.
9. 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.
10. Low per capita consumption:
The per capita annual consumption of sugar in India is only 16.3
kg as against 48.8 kg in the USA., 53.6 kg in U.K., 57.1 kg in
Australia and 78.2 kg in Cuba and the world average of about 21,1
kg. This result in low market demand and creates problems of sale
of sugar.

Sugar industry in india

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