SUGAR EXPORT FROM INDIA TOBANGLADESH

By:- Vinod Prajapat (63) MIBS Pune

INTRODUCTION

INDIA IS THE SECOND LARGEST COUNTRYIN TERMS OF SUGARCANE PRODUCTION 30% OF THE TOTAL SUGAR PRODUCED GOES FOR GUR AND KHANDARI , 45% GOES FOR SUGAR PRODUCTION AND THE 25% FOR ALCOHOL PRODUCTION (ETHANOL) 6 STATES CONTRIBUTE MORE THAN 85% OF TOTAL SUGAR PRODUCED IN INDIA

INDIAN & GLOBALSCENARIO

INDIA PRODUCES 26 MILLION TONES ON AN AVERAGE BUT THE PRODUCTION FORTHE FY09 IT IS EXPECTED TO GO BELOWBY 20%

GOLBAL CONTRIBUTION IS 3% BY INDIA,BRAZIL ALONE DOES 36% AND OTHERCOUNTRIES GIVE A TOTAL OF 45% ANDTHE REST IS DONE BY CHINA, CUBA ,INDONEASIA, THILAND, U.K AND USA

WORLD COUNSUMPTION OF SUGAR150.3 MMT FOR 2007-2008, PROJECTEDTO BECOME 160.7 BY 2010

THERE ARE 453 SUGAR MILLS IN THE COUNTRY

252 ARE IN THE CO-OPERATIVE SECTOR 134 ARE IN THE PIVATE SECTOR 67 IN THE PUBLIC SECTOR 136 UNITS ARE IN THE IMPLEMANTATION STAGES

U.P PRODUCES 24% ALONE ANDMAHARSHATRA CONTRIBUTES 20%

STATES AS TAMIL NADU, KARNATAKA,GUJRAT, PUNJAB

AND ALL THESE STATES CONTRIBUTE ATOTAL OF 85%

SUGAR CONTRIBUTION

INDIAN VIEW

AN OVERVIEW

SUGAR EXPORT

INDIA HAS AN AVERAGE EXPORTEABLESURPLUS OF 6.23 million tones EVERYYEAR

THE PAST FIVE YEARS IT EXPORTED 4.07million tones

SINCE DOMESTIC PRICES ARE HIGHERTHAN INTERNATIONAL THE RATE OFEXPORT IS EXPECTED TO COME DOWN

Bangladesh

• The annual consumption of sugar in Bangladesh is 1.2-1.3 million tonnes.•Refiners are supplying 4,000 tonnes of sugar to the wholesalers every day.

PESTLE ANALYSIS

Political :- Prime Minister: Sheikh Hasina     GDP :-   6.30%    GDP per capita :- $1400    Government :- Parliamentary democracy.    Population:- 156,050,883     Capital:- DHAKA (12,560,000)

Economic 

Exchange rate:- 1 Indian Rupee = 1.23955 Bangladeshi Taka 1 Bangladeshi Taka (BDT) = 0.80675 Indian Rupee (INR)Inflation :- 9.1%Bank rate :- 5%

Social

 Bangladesh is composite, and over centuries has assimilated influences of Hinduism, Jainism, Buddhism, Islam, hristianism.Population growth rate:- 1.2%

SWOT ANALYSIS

STRENGTHS GLOBAL PRICES TO MOVE UP –AN

INCREMENTAL POSITIVE THE DEMAND IS EVER LASTING ENVIRONMENTAL CONDITIONS SUITABLE

FOR THE GROWTH OF SUGAR CANE ABOUT 2.7% CULITVABLE LAND IS USED

FOR THE CANE PRODUCTION THE SUGAR INDUSTRY ALSO INCLUDES

ALCOHOL, GUR AN KHANDRI WHICH ISMAINLY FOR THE DOMESTIC INDUSTRY

WEAKNESS PRODUCTION TO DECLINE BY 20-25%

IN FY09 SHIFT OF THE FARMER FROM CANE TO

PADDY, WHEAT, PULSES AND OILSEEDS

THE GREATER DIVERSION OF CANE TOUN-ORGANISED SECTOR

THE IGNORANCE IN THE RESIDUALSUGAR MARKET

SOME OF THE GOVERNMENT POLICYTHAT ADHERE THE GROWTH OF THESUGAR INDUSTRY

SHORTAGE IN SUGAR CANE SUPPLY OBSELETE TECHNOLOGY

OPPRTUNITIES PRICES TO RISE BY 25% IN FY09 AND

MORE IN FY10E HIGHER MARGINS , LOWER CYCLICALITY

DRIVING SHIFT TOWERDS INTEGRATION THE ON GOING INCREASE IN DEMAND

YEAR AFTER YEAR THE SHIFT OF BRAZIL FROM WHITE

SUGAR TO PRODUCTION OF ETHANOL

THREATS LESS RAINFALL IN THE HIGHEST

SUGARCANE CULTIVATING REGIONS DUE TO WATER SHORTAGE THE SHIFT OF

THE FARMERS TO MULTIPLE CROPSCULTIVATION

DUE TO GOVERNMENT POLICIES THESELLING OF SUGARCANE BY THEFARMERS TO PRIVATE SECTORS

SUGAR PRODUCTION BEING MOREVOLATILE THAN CANE PRODUCTION

DUE TO RISE IN DOMESTIC CONSUMTIONTHE EXPORT IS LIKELY TO FALL

THE KEY PLAYERS IN SUGARINDUSTRY

BAJAJHINDUSTAN LTD.(ENTERPRISE VALUE: Rs mn

62,136) BALRAMPUR CHINNI MILLS LTD.

(ENTERPRISE VALUE: Rs mn32,819)

SHREE RENUKA SUGARS LTD.(ENTERPRISE VALUE: Rs mn

43,283)

CONCLUSION

INDIA IS LACKING DUE TO ITSPOLICY,METHODS,AND LACK OFKNOWLEDGE FOR THIS ONLYGOVERNMENT CAN MAKE A BIG CHANGE

INDIA INCLUDES SUGAR AS ANESSENTIAL COMMODITY AN IT HAS

BECOME MORE LIBERAL IN THIS SECTOR INDIA HAS THE POTENTIAL TO BECOME

THE WORLDS BIGGEST EXPORTER BYREMOVING THE MISSING LEADS.

THANK YOU