Why in News?

• The export of sugar from India has recently been a success story that has received attention.
• Between 2017-18 and 2021-22, these have soared from $810.9 million [6.2 lakh tonnes (lt)] to $4.6 billion (110 lt) and could cross $5.5 billion/Rs 45,000 crore in the fiscal year ending March 31.

What’s in Today’s Article?

• Overview of the Sugar Industry in India
• Where the Sugar Industries are Located in India?
• What Explains the Surge in Sugar Exports?

The Sugar Industry in India:

• Sugar industry is an important agro-based industry that impacts rural livelihood of about 50 million sugarcane farmers and around 5 lakh workers directly employed in sugar mills.
• In Sugar Season (Oct-Sep) 2021-22, a record 359 Lakh Metric Tons (LMT) sugar was produced by sugar mills.
• With this, India has emerged as the world’s largest producer (unseating Brazil) and consumer of sugar as well as the world’s 2nd largest exporter of sugar.
• 

 Where the Sugar Industries are Located in India?

• The base of the sugar industry is sugarcane, which is a bulky and perishable crop.
• Since the sucrose content degrades over time, sugarcane cannot be kept for a long period of time.
• In order to provide a consistent supply of sugarcane and reduce transportation expenses, the sugar mills are situated near to the areas where the sugarcane is grown.
• In India, there are two distinct agro climatic areas where sugarcane is mostly grown -
  • The states of Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka, Gujarat, Madhya Pradesh, Goa, Pondicherry, and Kerala are included in the tropical sugarcane region.
  • UP, Bihar, Haryana, and Punjab are included in the subtropical sugarcane growing region.
• In 2022, Maharashtra overtook UP to retake first place in India for sugar production.
• 

 What Explains the Surge in Sugar Exports?

• Grades of sugar:
  • Raw sugar (rough and brownish in colour) is what mills produce after the first crystallisation of juice obtained from crushing of cane.
  • Raw sugar is processed in refineries for removal of impurities and de-colourisation.
  • The end product is refined white cane sugar having a standard ICUMSA value of 45.
    • The International Commission for Uniform Methods of Sugar Analysis (ICUMSA) is a measure of the purity of sugar based on colour.
    • The lower the ICUMSA value, the more the whiteness. The sugar used by industries such as pharmaceuticals has ICUMSA of less than 20.
  • Much of the world sugar trade is in ‘raws’ that are transported in bulk vessels of 40,000-70,000 tonnes capacity.
  • ‘Whites’, on the other hand, are usually packed in 50-kg polypropylene bags and shipped in 12,500-27,000-tonne container cargoes over shorter distances.
  • Raw sugar requires no bagging or containerisation and can be loaded in bulk and the buyer here is the refiner, not the end-consumer.
• Where India was lagging?
  • Building export markets takes effort since foreign customers must be persuaded of the price competitiveness, product quality and reliability of supplies.
  • Till 2017-18, India mainly shipped plantation white sugar - referred to as low-quality whites (LQW) in international markets.
  • The Ministry of Consumer Affairs, Food & Public Distribution officials visited Indonesia, Malaysia, South Korea, China and Bangladesh, creating awareness about the quality of Indian raw sugar.
• Comparative advantage to India:
  • The refineries in those countries mostly imported raws from Brazil. Brazilian mills operate from April to November, whereas our crushing is from October to April.
    • Therefore, India told them to source Indian raw sugar during Brazil’s off-season.
  • Also, the voyage time from Kandla, Mundra or JNPT to Ciwandan Port of Indonesia is 13-15 days, compared to 43-45 days from Brazil’s Port of Santos.
• India’s raw advantage:
  • Apart from the time window and freight cost savings, Indian raw sugar is free of dextran - a bacterial compound formed when sugarcane stays in the sun for too long after harvesting.
  • Indian mills could supply raws with a very high polarisation of 98.5-99.5% (96-98.5% in raws from Brazil, Thailand and Australia).
    • Polarisation is the percentage of sucrose present in a raw sugar mass. The more the polarisation, the easier and cheaper it is to refine.
• Outcome of the Indian awareness campaign:
  • In 2019, Indonesia agreed to tweak its ICUMSA norms to enable imports from India (previously imported only raw sugar of 1,200 ICUMSA from Thailand - brought down to 600-1,200).
  • They even reduced their import duty on Indian raws from 15% to 5%.
  • Given how much palm oil India buys from Indonesia, it was like a return favour.