The demand from US had raised the prices to unprecdeneted levels a few years back. But the demand is likely to fall as the country has found a substitute for Guar.
Milan Shah, agri research analyst at Commodity Online, said after witnessing some profit booking ..
Gur and khandsari are traditional Indian sweeteners, which are produced in addition to sugar. These are the natural mixture of sugar and molasses. If pure clarified sugarcane juice is boiled, what is left as solid is gur also called as jaggery.
Capital requirement in gur making is very less, when compared to the capital requirement for a sugar plant of the same capacity.
Currently around one-third of India's sweetener production of 26 million tons is in the form of these products. While, the production of sugar has fluctuated between 17-21 million tons. India's sugar consumption in 2003-04 is estimated to be 18.5 million tons.
Around 4 million hectares of land is under sugar cultivation in India. The production of sugarcane in the recent years has fluctuated between 230-300 million tons.
The Indian Sugar industry is the second largest agro-processing industry in the country. India is the largest consumer and second largest producer of sugar in the world next to Brazil.
Sugar as a commodity is currently faced with a peculiar situation of huge inventories, plunging prices, unpaid dues to cane farmers and mills suffering losses.
The sugar production fluctuates over the years, displaying a distinct cyclical trend Typically Indian sugar industry follows a Five-year cyclic pattern.
Imports and exports are resorted to when there is mismatch in domestic sugar production, due to the cyclical pattern in production. India had been an exporter of sugar till 2002-03. However, the country has started importing sugar in 2003-04. Typically, the quantity imported or exported in 1-2 million tons, depending on the excess/shortage situation.
The Indian sugar prices are largely governed by the releases of sugar made by the Government. Higher the release lower the price, lower the release higher the price.
The sugar economy in India is highly regulated, starting from sugarcane to the use of end-product sugar. There has been a demand for liberalization of the sugar economy. Efficient futures trading and subsequent price discovery would be the first step in this regard.
There are three major grades of sugar traded in India - S 30, M 30 and L 30. These are classified based on the size of granules.
Muzzafarnagar, Mumbai, Delhi, Ludhiana, Kolkata, Hyderabad, Chennai are major trading centres of Sugar in India.
No gur or khandsari is produced on a commercial scale globally. Sugar is the sweetener used worldwide.
Sugar is a carbohydrate named as Sucrose that occurs naturally in every fruit and vegetable. Globally Sugarcane and sugar beet are the major sources of sugar. Sugar is used as sweetening agent in various household as well as industrial preparations.
The global production of sugar, in the recent years has been observed to be fluctuating between 130-140 million tons.
Major producers of sugar in the world are Brazil, India, China, USA, Thailand, Mexico, Australia, Cuba and Pakistan, which together account for 72 % of world production. Brazil, India and EU-15 are the top three producers of sugar and accounts for almost one third of followed by China, Thailand and USA.
Each year around 40 million tones of raw sugar are traded on the world market. Brazil is the world leading sugar exporter with 25% of world exports (12-14 million tons), followed by the EU-15 with 15% (6 million tons) and Thailand with 5 million tons. The other major exporters are Australia and Cuba, with annual exports of 3 to 4 million tons.
The Russian Federation (5-6 million tons), Indonesia (1.5-2 million tons), EU-15 (1.5-2 million tons), Japan (1-1.5 million tons), Korea (1-1.5 million tons), USA (1-1.5 million tons) are the major global importers.
Brazil sets the trend for world sugar prices. The Brazilian price is dependent on the situation in the fuel sector since a major portion of its sugar production goes for ethanol production, which is used as fuel in the country.