Sugar Industry Outlook

Monday, March 09 2020

Sugar is a sector of significant importance to the national economy. While consumption has been growing historically, the production has been cyclical. At present, the sugar industry is regulated across the value chain. Investments in by-products are at a nascent stage, and the sector has struggled to generate a return on invested capital in excess of its cost of capital in most years, primarily due to a high mandated fixed cane price and a volatile sugar price. Sugarcane is primarily grown in nine states of India: Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Uttar Pradesh and Tamil Nadu. More than 50 million farmers and their families are dependent on sugarcane for their livelihood. The sugar industry caters to an estimated 12 percent of rural population in these nine states through direct and indirect employment. Effectively, each farmer contributes to the production of 2.9 MT of sugar every year1.

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