Medium Term Outlook for Indian Agriculture:Sugar Sector

Roshan TamakBusiness Head (Sugar),

Olam Agro India Ltd

Global Sugar Industry

Brazil and India are the highest sugar producing nations in the world

Global per capita consumption of sugar

Indian Sugar Industry a snapshot

Particulars UOM

Crushing Season

2010-11 2011-12

Sugar Factories in Operation Nos 527 529

Crushing Capacity Million TCD 24,2 24,8

Sugarcane Crushed mmt 239,8 256,9

Sugar Produced Mmt 24,4 26,3

Sugar Recovery % 10,2 10,2

Yield of Sugarcane MT/Hect 70,1 70,3

Sugarcane Area Contribution of Major States

India: Area under Sugarcane cultivation

There is no significant expansion in the acreage of sugarcane

*above numbers are in 000 Hectares

StatesSeason

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Average

India 4520 3938 3662 4201 5151 5043 4408 4202 4944 5086 4516

Andhra Pradesh

233 209 210 230 264 247 200 158 192 204 215

Gujarat 203 176 197 197 214 208 197 192 188 202 197

Karnataka 383 243 178 219 326 296 210 326 421 430 303

Maharastra 573 443 324 501 1049 1088 770 736 964 1022 747

Tamil Nadu 261 192 232 336 391 352 323 314 336 382 312

Uttar Pradesh

2149 2030 1955 2156 2247 2179 2058 1977 2125 2162 2104

India- Sugar recovery %

Sugar recovery is more or less stagnant over the decade

StatesSeason

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Average

India 10,36 10,22 10,17 10,21 10,16 10,55 10,03 10,20 10,17 10,25 10,23

Andhra Pradesh

10,10 10,31 10,65 10,05 9,70 10,12 9,89 9,28 9,75 9,79 9,96

Gujarat 10,58 10,93 10,76 10,82 10,64 10,67 10,72 10,53 9,99 10,61 10,63

Karnataka 10,79 10,19 10,11 10,82 10,57 10,87 10,28 10,70 10,91 11,14 10,64

Maharastra 11,64 10,92 11,39 11,68 11,39 11,92 11,44 11,51 11,29 11,65 11,48

Tamil Nadu 9,88 9,92 9,64 9,24 9,25 9,32 9,62 8,93 9,08 9,31 9,42

Uttar Pradesh

9,53 9,82 9,79 9,51 9,47 9,79 8,94 9,13 9,14 9,07 9,42

India –Sugarcane yield /hec

States 

Season

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

Average

India 69 67 64 59 65 67 69 68 67 66 69 70 66

Andhra Pradesh 82 83 66 72 75 77 82 82 78 74 77 82 77

Gujarat 71 71 69 72 74 74 73 81 73 70 76 70 73

Karnataka 103 81 85 66 80 83 88 83 83 90 94 90 85

Maharastra 83 78 74 58 63 78 75 81 79 85 85 80 76

Tamil Nadu 105 102 93 92 101 104 105 108 106 101 108 103 102

Uttar Pradesh 55 58 56 56 61 58 60 57 52 59 57 60 57

Sugarcane productivity is almost stagnant over the years.

(In Tons per hectares)

Limitations in increasing productivity

Cyclicality in sugar Industry

Unpredictable climate

Depleting water resources

Crop competition and food security challenge

Land fragmentation and small land holdings

Depleting soil health/monoculture

Increasing cost of cultivation-inputs/labor etc

Improper sugarcane varietal mix and low sugar yield

Lack of focus on Cane research and development

Sugar Production and Sugar Consumption

India- State wise per capita consumption

States with relatively lesser demand will soon catch up with the high sugar consumption

Wide gap from 10-28 Kg/Person

India- Projected domestic sugar consumption

Increasing demand expected to reach 30 million tons by 2020

Shared Vision

Policy MakersPolicy

MakersFarmers &

MillersFarmers &

Millers

ConsumersConsumers

Fulfill customers needs

Self sufficiency to meet domestic demand

Social welfare of stakeholders

Contribution to India’s energy requirement

Economic profit driven growth

Risk and cost minimization

Collaboration between each otherTowards a more

efficient sugar industry

Towards a more efficient sugar

industry

Potential & Opportunities

Implementation of sugar & cane price linkage formula ( Dr Rangarajan Committee)

Integration of Indian commodity exchanges with the world market

Stable trade policy-import/export (Timely decisions)

Mandatory support for Cogen Power (tariff support/REC benefit)

Implementation of Ethanol Blending policy (10% -recently announced)

Proper coordination for research and development (IISR,SBI,VSI,UPSCR)

Integration of all Govt schemes like SDF,NFSM,RKVY for the purpose of sugarcane development and infrastructure improvement

Water harvesting/drip irrigation to be taken up as a major initiative

Development of Micro entrepreneurs/custom hiring model

Training modules for growers/staff to be developed and implemented

Action Agenda

Thank you!