Sugar industry is an important agro-based industry that impacts the rural livelihood of about 50 million sugarcane farmers and around 5 lakh workers directly employed in sugar mills. The sugar industry is the second largest agro-based industry in India after cotton.

Geographical Conditions for the Growth of Sugar

• Temperature: Between 21-27°C with hot and humid climate.
• Rainfall: Around 75-100 cm.
• Soil Type: Deep rich loamy soil.
• Top Sugarcane Producing States: Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Bihar.
• India is the second largest producer of sugarcane after Brazil.
• It can be grown on all varieties of soils ranging from sandy loam to clay loam given these soils should be well drained.
• It needs manual labour from sowing to harvesting.
• It is the main source of sugar, gur (jaggery), khandsari and molasses.
• Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) and National Policy on Biofuels are two of the government initiatives to support sugarcane production and the sugar industry.

Key Points

Production: Last year, our country achieved a record-breaking sugarcane production of over 5000 Lakh Metric Tons (LMT) during the sugar season from October to September (2021–22). Sugar mills crushed around 3574 LMT of sugarcane, producing about 394 LMT of sugar (Sucrose). Out of this, 359 LMT of sugar came directly from the mills, while 35 LMT was diverted for ethanol production.

Exports: Our exports brought in a whopping Rs. 40,000 crores in foreign currency. The highlight was the largest export of 109.8 LMT, which happened without any financial aid and continued from the previous year, thanks to favorable worldwide prices and supportive Indian Government policies.

Employment and Jobs: The impact of the sugar industry goes beyond just numbers. It significantly influences the lives of approximately 5 lakh individuals directly employed in sugar mills and the 50 million sugarcane farmers. Beyond this, ancillary activities related to transportation, machine repair, and agricultural inputs also contribute to job creation.

Output from Sectors: The Indian sugar industry’s annual output currently stands at around Rs. 80,000 crores. With 732 sugar factories in the country, boasting enough crushing capacity to generate 339 lakh MT of sugar, the capacity is evenly split between cooperative and private sectors.

No Financial Aid Needed: In a remarkable feat, sugar mills purchased sugarcane worth more than 1.18 lakh crores without any financial aid from the government during Sugar Season (SS) 2021–22. Payments totaling more than 1.12 lakh crores were released, leaving the cane debt at the end of the season less than 6,000 crores, with 95% of the cane debt already paid.

Revenue from Ethanol Sale: The growth of ethanol as a biofuel sector has significantly benefited the sugar industry in the last five years. Sugar mills/distilleries raked in around 18,000 crores in revenue from ethanol sales during 2021-22. This not only improved their financial positions but also played a crucial role in settling farmers’ cane dues early.

Expansion Predicted: Looking ahead, sugar diversion to ethanol is expected to increase from 35 LMT to 50 LMT in the upcoming season, generating an estimated 25,000 crores in revenue for sugar mills. The government’s encouragement of this practice aims to ensure timely payment of cane dues to farmers and maintain better financial conditions for mills.

Challenges for Sugar Industry in India

Relying on Rain: Growing sugarcane heavily depends on rainfall, especially in central and southern India where irrigation facilities are limited. A good monsoon is crucial for a successful harvest.

Export Challenges: The prices for sugar in the global market are significantly lower than India’s domestic prices, discouraging the export of surplus sugar. This results in inadequate compensation for farmers.

Productivity Woes: India boasts the largest sugarcane cultivation area globally, but the yield per hectare is disappointingly low. Northern India particularly struggles with even lower productivity compared to the south.

Low Sugar Extraction: The sugar recovery rate from sugarcane in India is less than 10%, much lower than regions like Java, Hawaii, and Australia, where it’s 14%. This impacts overall efficiency and profitability for farmers.

Government Pricing Challenges: The government’s dual pricing system hampers entrepreneurial investment and growth in the sugarcane industry. This discourages improvements and advancements.

Short Production Season: Sugar production is a seasonal industry with a brief crushing season lasting from 4 to 7 months per year. This leads to economic losses, seasonal employment for workers, and underutilization of sugar plants.

Way Ahead

In October 2021, the government shared some exciting news! They offered a special reward to sugar companies to inspire them to use extra sugar cane to make ethanol. This magical ethanol can be mixed with petrol to power our cars and trucks. Plus, it’s like a superhero solution because it helps solve the issue of having too much sugar in our country.

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