Indian Sugar Industry

June 29, 2010Sugar Industryby EconomyWatch


Sugar Industry in India is well developed with a consumer base of more than billions of people. It is also the second largest producer of sugar in the world.

There are around 45 millions of sugar cane growers in India and a larger portion of rural labourers in the country largely rely upon this industry. Sugar Industry is one of the agricultural based industries. In India it is the second largest agricultural industry after .

Statistics On Sugar Production

As to the statistics there were a total number of 571 sugar factories in India as on March 31,2005 compared to 138 during1950-51. These 571 sugar mills produce a total quantity of 19.2 million tones (MT). Sugar production in India increased from 15.5 MT in 1998-99 to 20.1 MT in 2002-03.

Department of Agriculture and Co-operation, sugarcane production in 2004-05 is estimated at 232.3 MT from 237.3 MT in 2003-04. Sugarcane production is expected to reach 257.7 MT in 2005-06.

Sugar Production In states

The following table shows level of sugar production (In Lakh Tonnes) in Indian States:

State 2002-03 2003-04 2004-05 Estimated
Uttar Pradesh 58.74 46.08 50.32
Maharashtra 61.64 31.99 22.29
Karnataka 17.98 11.57 13
Tamil Nadu 17.04 11.9 9.84
Andhra Pradesh 11.88 8.81 9.75
Gujarat 12.38 10.77 8.32
Haryana 5.99 5.86 4.03
Uttaranchal 4.59 3.93 3.82
Punjab 5.11 3.88 3.37
Bihar 4.21 2.77 2.77
Madhya Pradesh 0.85 0.94 0.85
Other 0.91 1.09 1.58


The sugar production in the states largely depend upon monsoon. From 1998-03 good monsoon resulted a larger production of sugar in the country.

Sugar Pricing:

Government of India fixes Statutory Minimum Price (SMP) for sugarcane according to Clause 3 of the Sugarcane Order. This statutory Minimum Price is designed through the consent of Commission for Agricultural Coast and Prices (CACP) and respective state Governments. For the year 2004-05, the rate was fixed at Rs. 74.50 Per quintal with a basic recovery of 8.5%.

Indian Government on Sugar Industry

The following policy initiatives are taken to boost the Sugar industry:

  • Government declared the new policy on August 20,1998 with regards to licenses for new factories, which shows that there will be no sugar factory in a radius of 15 km.
  • Setting up of Indian Institute of Sugar Technology at Kanpur is meant for improving efficiency in the industry.
  • In the year 1982, the sugar development fund was set up with a view to avail loans for modernization of the industry.
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