India is the second biggest producer of sugar in the world and the biggest consumer. This makes it a key driver for the outlook of the global sugar economy and for world market prices. In the last decade, and since the publication of our study in 2015 – MECAS(15)19, entitled “India: Future Sugar Industry Prospects” – there has been substantial change in its standing and outlook. Gone is the era of the Indian Swing Cycle, where years of surplus and deficit would follow one-other on a regular basis, with arrears in farmer payments accentuating the swings. It has been superseded by a period of stable, and surplus, sugar production which has allowed both record exports as well as an expansion of a domestic fuel ethanol programme.

This study will focus on three key areas of interest for all sugar industries – Agronomics, Trade and Diversification - while the study is book-ended with an overview and a conclusion. The analysis is reliant on data provided by the Commission for Agricultural Costs & Prices, Government of India, and the Indian Sugar Milling Association (ISMA) for which the ISO wishes to give due recognition.

The key to the outlook for the industry in terms of agronomy is focused on the integration of better varieties and mechanical harvesting. Meanwhile, the trade situation is complex, given opportunities in raw sugar, white sugar, molasses, and ethanol potentially arising in the future. Furthermore, the expansion of bagasse cogeneration and the use of ethanol gel as a fuel are also positive prospects that are yet to be fully endorsed. However, for now, it is the challenge of aligning domestic production to the diverging price dynamics in world markets that will set the industry on an even brighter path.

Contents:

Introduction 	
								
1. Industry overview				 			
     1.1	Advances in sugarcane 						
     1.2	Overview of processing industry				
     1.3	Government intervention						
     1.4	Sugar consumption							

2. Sugarcane agronomy in India					 
     2.1	Cane variety development						 
     2.2	Cane usage by output sector					 
     2.3	Cane cost model							 
     2.4	Cane pricing system							 
     2.5	Domestic sugar price dynamics					 
     2.6	India’s sugar economy						 

3. Sugar Trade									
     3.1	The use of futures hedging	 					 
     3.2	Export licencing							 
     3.3	Sugar Qualities and destinations					 
     3.4	Port operations and logistics			 		 

4. Diversification								
     4.1	Molasses								
     4.2	Bagasse								
     4.3	Ethanol 								
     4.4	Carbon credits, cooking fuel and hydrogen			

5. Conclusion									

Annex I			`