Thread by @FinterestC

Sugar Industry – A Thread

1/ About the Industry
Sugarcane & Sugar are crucial for the Indian economy
5 cr farmers involved in cultivation
50L hectares area of land involved in cultivation
India is the largest consumer & 2nd largest producer of sugarcane
Covered under Essential Commodities Act, 1955

2/ Process
Sugar is produced from sugarcane (1-1.5 yr growth)
Crushed under rollers to produce Juice, Bagasse & Mud
Bagasse & Mud separated to produce power & fertilizers
Juice is heated to make syrup
Boiling residue left is called molasses
Molasses give ethanol & alcohol

3/ Regulations
Minimum Selling Price of sugar was Rs 31 2019
Discussions underway to increase to Rs 33
Fair and Remunerative Price & State Advisory Prices in place for sugarcane
Regulations in place to manage the volume of sugarcane
A % of molasses to be given to alcohol industry

4A/ Growth – Ethanol Policy
Ethanol blending with petrol has been made mandatory for India’s Oil Marketing Companies
Blending target of 10% by CY22 and 20% for CY25
Allow sugar companies to sell more profitable ethanol
Address oversupply situation of sugar

4B/ Growth – Using grains for ethanol
OMCs have achieved 7.2% ethanol blending in the present scenario
To achieve targets production of ethanol through grains required
This will provide additional source of income for sugar companies

4C/ Growth – Export
The GoI is promoting export of sugar by providing export incentive
Export subsidy of INR 5.85/kg of sugar export
Global sugar prices on the rise
The sugar closing inventory is expected to fall to 8MT by September 2021
Reduced production in Brazil & Thailand

4D/ Growth – Other
The adoption of CO-0238 seed since 2016 has increased yield from of sugarcane
Industry undertaking significant capex
The government is expecting distillery projects worth INR 40,000 Cr. to be commissioned in 4-5 yrs

5/ Peer Comparisons