Indian Sugar Industry - 2010
Credit Analysis & Research Limited, January 2010, Pages: 87
Indian sugar industry has entered the strongest up cycle (lowest stock to use ratio) in the history of 50 years after witnessing supply glut in previous two sugar seasons in a row (SS 2006-08). Sugar production reached an all time low of 14.7 mn tonnes during SS 2008-09 due to sharp fall in the sugarcane acreage. However, sugar consumption continued to grow at a steady pace. It grew at CAGR of 4% during SS 07-09.India is the second largest sugar producer globally, followed by Brazil. The prevailing sugar deficit situation at both domestic and global level will augur well for the industry.
Till when will the deficit situation continue? What will be the import scenario? Where will the sugar prices move from here? The report seeks to answer the above issues using reliable sources of primary and secondary data and the author's views on the same.
The report on the ‘Indian Sugar Industry’ contains comprehensive data and analysis of the sector apart from giving the author’s outlook on the sector. By developing the sophisticated model with its established network of primary and secondary sources the author has also tried to analyse the different business models which industry players can adopt and the incremental profits which can be generated from these models.
The report is indispensable for any company in the sugar industry, banks/ FIs, policy makers, research & academic organizations, other international and national agencies, etc. Additionally, the 4 quarterly updates (for the period January 2010 to December 2011) accompanying the subscription of the said report would form a potent tool for the subscribers to keep abreast of the happenings in the industry.
Index
Executive Summary
Our Outlook
Introduction
- Overview
- Structure of Industry
- Contribution to Indian Economy
- Evolution
- Characteristics
- Fragmented Industry
- Regulated Industry
- Raw Materials in Close Vicinity of Sugar Plants
- Cyclical Industry
- Seasonality
- Working Capital Intensive
- Geographical Spread
- Types of Sugar
- Granulated Sugar
- Brown Sugar
- Liquid Sugar
Government Regulations and Incentives
- Policies related to Sugarcane
- Sugarcane Pricing
- Sugarcane Procurement
- Policies Related To Sugar
- Domestic Sales
- Exports
- Imports
Demand & Supply
- Pre 1990 Era
- Post 1990s
- Demand & supply scenario in SS 1990-91 to
SS 2002 -2003 Period
- Demand & Supply Scenario in SS 2003-04
- Demand & Supply Scenario in SS 2004-05
- Demand & Supply Scenario in SS 2005-06
- Demand & Supply Scenario in SS 2006-07
- Demand & Supply Scenario in SS 2007-08
- Demand & Supply Scenario in SS 2008-09
- Demand Drivers
- Growing Population & Per Capita income
- Lower Per Capita Consumption
- Supply Drivers
- Sugarcane Availability
- Drawal Rate
- Recovery Rate
- Political Factor
State-wise Scenario
- State-wise Analysis
- Maharashtra
- Uttar Pradesh (UP)
- Karnataka
- Tamil Nadu
- Gujarat
- Andhra Pradesh
Global Scenario
- The Brazil Impact
By-Products
- Bagasse
- Molasses
- Business Model Analysis
Cost & Margin Analysis
- Cost
- Sugarcane Production
- Sugarcane Pricing
- Margins
Sugar Prices
Company Profile
- Bajaj Hindusthan Ltd.
- Balrampur Chini
- Renuka Sugar Ltd.
- Triveni Engineering & Industries Ltd.
Table Index
Introduction
- Structure of the industry during SS2007-08
- Number of factories in operation and average capacity of mills
- Comparison of regulatory environment in top 4 sugar producing countries
- Top 5 Sugarcane and Sugar producing states in India in SS 2007-08
Government Regulations and Incentives
- Trend in Statutory Minimum Prices
- Trend in State Advised Prices
- Sugarcane pricing policy
Demand & Supply
- Statement showing area under sugar cane production, yield and sugar production
- Demand-Supply Trend
- Statement showing area under sugar cane production, yield and sugar production
- Demand –Supply Trend
- Yield rates in major sugar producing states
- drop in the sugarcane yields and increase in the utilisation of sugar for Gur and Khandsari
- Area under sugarcane cultivation in top 5 sugarcane producing states
- Comparison of SMP on Wheat and Sugarcane
- Sugarcane scenario: Top 5 states
- Steady growth in sugar consumption and population
- Trend in Recovery rate
State-wise Scenario
- Sugarcane & Sugar production trend of top 6 states
- Statement showing area under sugar cane production, yield and sugar production
- the capacity expansion of few UP based companies
- Statement showing area under sugar cane production, yield and sugar production in UP
- Statement showing area under sugar cane production, yield and sugar production
- Statement showing area under sugar cane production, yield and sugar production in TN
- Statement showing area under sugar cane production, yield and sugar production
- Statement showing area under sugar cane production, yield and sugar production in AP
Global Scenario
- Top 10 sugar producers in SS 2007-08
- Global Demand –Supply Trend
- Crushing update of Central-South region SS 2009-10
By-Products
- State-wise annual co-generation capacity in India
- ethanol requirement at 5% blending programme vs. 10% blending programme
- Non Integrated Model: Sugar +Molasses +Bagasse
- Partially Integrated Model: Sugar + Ethanol +Bagasse
- Partially Integrated Model: Sugar + Molasses +Power
- Fully Integrated Model: Sugar + Ethanol +Power
Cost & Margin Analysis
- Company-wise Raw material cost in FY 09
- major sugarcane producing states in tropical and sub-tropical regions
- Company-wise sugarcane cost
Figure index
Introduction
- Domestic Demand and Supply trend
- Major Sugarcane and Sugar producing states in India in SS 2007-08
- Sugar production cycle
- Closing stock as percentage of domestic consumption
- Month-wise production trend of sugar
- Trend in Net working capital to Net sales Ratio of the sugar industry
Demand & Supply
- Sugar production trend in pre 1990 era
- Sugar production trend during 1991-2008
- Increase/Decrease in SMP prices of various crops
- Demand & Supply Scenario in 2008-09
- Steep fall in sugarcane acreage led to sugar crisis
- Consumption Pattern
- Per capita consumption of sugar
- Trend in drawal rate
- Monthly release order of non-levy sugar
State-wise Scenario
- Share of top 6 sugar producing states
- Sector wise distribution of sugar production capacity
- Trend of sugar crushing season
- Trend of recovery rate
- Sector wise distribution of sugar capacity
- trend of sugar crushing season in the state vis a vis all India crushing season
- Trend of recovery rate
Global Scenario
- Global Sugar Production Trend
- Top 5 sugar exporting countries in SS 2007-08
- Top 5 sugar importing countries in SS 2007-08
- International Raw sugar Prices
- Brazil- Sugarcane Production Trend
- Brazil- Sugar Production Trend
- Brazil-Sugar Exports trend
By-Products
- Fully/ Partially Integrated players vs Non integrated players
Cost & Margin Analysis
- Sugarcane Components
- Sugarcane production trend
- Trend of sugarcane arrears
- Trend of PBDIT and PAT Margin
Latest available financials of various players
For an in-depth understanding and analysis of the Indian Passenger Vehicle industry and the author’s outlook on the sector with its segment-wise forecast of domestic sales as well as exports for each year till FY 2013-14 and other key trends in the industry foreseen, please refer to the Report on the Indian Passenger Vehicle Industry, December - 2009 by the author.
The subscription to this report includes monthly updates and any other releases, including Impact reports and articles on the Indian Passenger Vehicle industry for the next 1 year from the date of subscription
Indian sugar Industry………………in limelight
Indian sugar industry has entered the strongest up cycle (lowest stock to use ratio) in the history of 50 years after witnessing supply glut in previous two sugar seasons in a row (SS 2006-08). In SS2006-07, sugar production reached all-time high of 28.3 mn tonnes, registering a growth of 46.6% on yoy basis and it declined marginally by 7.1% to 26.3 mn tonnes in SS2007-08. Sugar production reached an all-time low of 14.7 mn tonnes during SS2008-09 due to sharp fall in the sugarcane acreage. However, sugar consumption continued to grow at a steady pace. It grew at a CAGR of 4% during SS 07-09.
In SS2008-09, on account of a steep fall in sugar production and fall in the stock to use ratio, the average wholesale prices increased by almost 50% on yoy basis. This had a positive impact on the margins of sugar companies in the Q4FY09.
The production of sugar is spread across the country. Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu, Gujarat and Andhra Pradesh are the major sugar producing states in the country. In SS2007-08, these six states together accounted for almost 92% of the total sugar produced in India. In SS2007-08, the State of Maharashtra produced the highest sugar at 9.1 mn tonnes followed by UP with 7.3 mn tonnes. These two states together account for almost 62% of the total sugar produced in India.
Sugarcane is the primary raw material for the sugar industry. It accounts for almost 75%-80% the total operating cost of the sugar industry. UP is the largest sugarcane-producing state in the country and accounted for about 37% of the total sugarcane output in SS 2007-08 followed by Maharashtra with 24%. Even though, UP is the largest sugarcane-producing state in the country it is the second-largest sugar producer in India as drawal and recovery rates in UP are one of the lowest in India.
The author expects sugar deficit situation in India to continue in SS2009-10 and SS2010-11. We believe that India will bridge the gap between demand and supply through imports. The author expects that sugar prices will continue to rise till SS2009-10 on account of tight demand and supply situation in country.
- Bajaj Hindusthan Ltd.
- Balrampur Chini
- Renuka Sugar Ltd.
- Triveni Engineering & Industries Ltd
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