Context:
India’s sugar industry is showing signs of significant recovery following an extended period of uncertainty. This rebound is crucial for the agriculture sector, impacting numerous stakeholders from farmers to exporters.
Relevance:
GS III: Agriculture
Dimensions of the Article:
- State of the Sugar Industry in India
- Significance of the Sugar Industry in India
- Challenges Associated with the Sugar Industry in India
- Way Forward
State of the Sugar Industry in India:
- Production Forecast (2024):
- The Indian Sugar Mills Association (ISMA) projects gross sugar production at 34.0 million metric tons (MT) for the Sugar Year (SY) 2024.
- Net production is estimated at 32.3 million MT after accounting for ethanol diversion and a ban on exports.
- Global Comparison:
- Brazil leads global sugar production with 45.54 million MT in 2023-24, contributing 25% of the global output.
- India is the largest consumer and the second-largest producer of sugar, contributing 19% of global production.
- Domestic Consumption:
- Domestic consumption is projected at 28.5 million MT for 2024.
- A closing stock of 9.4 million MT is expected by September 2024, an increase from 5.6 million MT in the previous year.
- Ethanol Supply:
- A target of 320 crore liters for the first half of the Ethanol Supply Year (ESY) 2024 was set.
- 224 crore liters were supplied by March 2024, achieving a blending ratio of 11.96%.
- Major Production Areas:
- North India: Uttar Pradesh, Bihar, Haryana, Punjab.
- South India: Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh.
- South India is known for higher sucrose content, resulting in higher yields per unit area.
- Geographical Conditions for Sugarcane Growth:
- Temperature: 21-27°C (hot and humid climate).
- Rainfall: 75-100 cm annually.
- Soil Type: Deep rich loamy soil.
Significance of the Sugar Industry in India:
- Economic Importance:
- The sugar sector is highly labor-intensive, providing livelihoods to approximately 50 million farmers and their families.
- Direct employment to over 500,000 skilled workers, in addition to numerous semi-skilled workers in sugar mills.
- Value Chain:
- The industry supports a broad value chain, spanning sugarcane cultivation to the production of sugar and alcohol, contributing to both local and national economic growth.
- Byproducts:
- Key byproducts include ethanol, molasses, and bagasse, which play a significant role in various industries.
- Multi-Product Crop:
- The sugar industry is a multi-product industry, serving as a source for sugar, ethanol, paper, and electricity generation.
- Molasses:
- Molasses is a highly nutritious byproduct used for livestock feeding and alcohol production, contributing to the agricultural economy.
- Ethanol Production:
- Ethanol is predominantly produced from sugarcane molasses, playing a critical role in reducing reliance on crude oil imports through ethanol-blended fuels.
- Bagasse:
- Bagasse, the fibrous residue after sugar extraction, is a key raw material in the paper industry, contributing about 30% of cellulose requirements from agricultural residues.
Challenges Associated with the Sugar Industry in India
- Water-Intensive Crop:
- Sugarcane is highly dependent on water and is predominantly cultivated in monsoon-reliant regions like Maharashtra and Karnataka, exacerbating water scarcity in these areas.
- Seasonal Availability and Sucrose Loss:
- Delays in crushing sugarcane after harvest (beyond 24 hours) lead to sucrose loss, posing a significant challenge.
- Low Sugar Recovery Rate:
- The sugar recovery rate in Indian sugar mills remains at 9.5-10%, lower than the 13-14% observed in other countries. This stagnation is due to limited advancements in sugarcane varieties and improved yields.
- Competition with Other Crops:
- Sugarcane cultivation competes with other food and cash crops like cotton, oilseeds, and rice, leading to price volatility during surplus periods when prices fall.
- Outdated Machinery in Sugar Mills:
- Many sugar mills, particularly in Uttar Pradesh and Bihar, operate with outdated machinery, reducing productivity.
- Low Return on Gur Production:
- While gur has higher nutritional value, it has a lower sugar recovery rate than sugar, leading to economic losses when sugarcane is diverted to gur production.
- Price Discrepancies:
- Gur factories often offer a lower price for sugarcane than sugar mills, incentivizing farmers to sell to them, which further impacts overall sugar production.
Way Forward
- Research and Development (R&D) Investment:
- There is a need for substantial investment in R&D to develop high-yielding, drought-resistant sugarcane varieties, which will improve productivity and long-term sustainability.
- Remote Sensing Technologies:
- Advanced remote sensing technologies should be deployed to accurately map sugarcane cultivation areas and provide reliable data for better management.
- Government Intervention in Pricing:
- When the cane price determined by the formula drops below a reasonable level, the government can bridge the gap by creating a dedicated fund, sourced from a cess on sugar sales.
- Incentivizing Ethanol Production:
- The government should promote ethanol production to reduce reliance on oil imports and manage surplus sugar production, thereby stabilizing both the sugar and energy markets.
-Source: The Hindu
