Saturday, September 12, 2009

Sugar: The cycles of plenty and scarcity

"Kashinath Chinkera (30) of Mangalgi village ended life by consuming pesticide on Saturday. He is survived by three children. He had reportedly availed himself of a loan of nearly Rs. 2.5 lakh.

Most of the 43 farmers who ended lives in the district this year had grown sugarcane. Their complaint was that their crop was not bought by sugar factories in the district. They had huge loans to repay and they had spent a lot of money on cultivation. Refusal or delay by factories meant their crop would dry up day by day."   

---------- The Hindu reporting on farmers suicides in Bidar on May 28th 2007

The graphic below shows the retail price of sugar in Delhi - figures supplied by the Ministry of Civil Supplies. Your kirana store likely charges more.
The government describes the shortfall in sugar production as a "cyclical phenomenon" coupled with the effects of a bad monsoon. An analysis of the reasons behind the runaway inflation in sugar prices makes for different conclusions.

Sugar cane must stay in the field for 11 to 15 months to mature. The year refered to is the 'sugar season' and starts from October, the earliest month when crushing of the years sugar cane begins. Crushing lasts for a maximum of 6 months and the factories close their crushing operations by the end of May. Thus 2008-09 cane production refers to cane brought for crushing in the sugar season 2008 October to 2009 September. Cane acreage came down sharply in 2008-09 on the back of a smaller drop the previous year. Cane production came down by 20% while acreage had come down only by 12%. How much sugar was produced from the cane?
This question is answered by the next graphic. Sugar production fell by a sharp 43% in 2008-09 from the previous years level much higher than the 20% fall in cane production.
The reason, it turns out, is that more sugar cane - used for making gur and khandsari besides sugar -was converted to gur in the 2008-09 season than usual. Why did farmers prefer to see to small scale units manfacturing gur and khandsari rather than to the sugar mills?

The above graphic also shows imports (exports) of sugar. The consumption in India seems to be about 20-22 million tonnes. The years 2006-07 and 2007-08 were years of overproduction. The government promoted exports to get rid of the excess stocks even providing a subsidy to exporters as international prices in 2007 were lower than Indian prices.

India started importing sugar from early 2009. The international market has now gone into a tizzy knowing that India has to make huge imports to meet requirements for 2009-10. See the full analysis in this India Together article

This piece has been referenced in a paper on a 'Sustainable Sugarcane Initiative' here


mantri said...

good analysis. people have to understand how they are being taken for a ride.

also see another relevant article in on the mess in agriculture

Lokadhikar said...

this is a good blog on topics of relevance.

please keep it up.