Sugar Industry In India. Saurabh Bhat Group Executive Vice President. December 18, 2010. Industry Brief. India is the largest consumer (~23 MnT) and second largest producer (~25 MnT) of sugar in the world(~157 MnT).
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Group Executive Vice President
December 18, 2010
Bulk of Indian sugar production is Plantation white sugar using the double sulphitation process
International trend is towards refined sugar by phospho floatation process
Indian refined sugar capacity is < 200,000 tonnes against a demand of 350-400,000 tpa. Moreover there’s a huge export opportunity
Availability of activated carbon from cheaper natural sources (coconut kernel, pinewood as against bone charcoal) makes the process viable. Activated carbon is a imp RM cost for the filtration process in refined sugar.
* Surplus power per tonne of sugarcane crushing is ~ 60 units which is assumed to be sold at INR 3 per unit.
Availability and Price of Cane
Significant political risk in terms of support price
High dependence on monsoon
Highly cyclical with acreage under cultivation demonstrating yearly swings
Cane diversion to other uses (esp in states like UP and Bihar)
Time of harvest
High degree of regulation - Govt policies including
Price and quota of levy sugar
Export / import policy – quantity and duties
International Demand supply and Prices of raw sugar
Ethanol, Molasses and Bagasse price and Power Tariff
Off season availability of fuel
Integrated sugar plants in developing countries
Mali: sugar project financed by African Dev Bank comprises
14,000 hectares to produce 1.45 mn tonnes of cane
200,000 tonnes per annum (7500 tcd) of sugar unit
15 mn litres p.a. of Ethanol and 30 MW of cogen
Brazil will continue to be dominant supplier , however production in Mexico, China and other South Asian countries like Thailand expected to grow (source: Mott Mcdonald)
Prices expected to be in the 25c/lb to 29c/lb band over next year (source: ISO)
Greater shift to refined sugar