Sugar Industry in India Essay

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Pages: 9
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TABLE OF CONTENTS
INTRODUCTION 3
KEY CHARACTERISTICS OF SUGAR INDUSTRY 3
KEY SUCCESS FACTORS (KEY PERFORMANCE INDICATORS) 4
PEST ANALYSIS OF SUGAR INDUSTRY IN INDIA 4
PORTERS FIVE FORCE ANALYSIS 8
FACTORS LEADING TO INCREASE IN DEMAND OF SUGAR IN INDIA 12
GLOBAL SUGAR OVERVIEW 12
BY-PRODUCTS 13
FACTORS LEADING TO INDUSTRY ATTRACTIVENESS 14
BIBLIOGRAPHY 15

SUGAR INDUSTRY OF INDIA Introduction
Sugar is extracted from two raw materials beet root and sugarcane , both produce identical refined sugar. Sugar cane accounts for two-third of the raw material used for sugar production in the world and beet root one third balance of the world production. India is the second largest producer of sugar in the world with 10 to 12% …show more content…
The prices are fixed by the government of India in the beginning of every season, based on recommendations of commission of agriculture costs and prices (CACP). The government of India has been announcing the SMP sine 1952-53.The SMP has increased every year since 1988, and has been fixed with a 6.7% increase over 2005 at Rs79.5 per quintal over 2005.
However the sugar mills pay a further higher price on account of higher state advised prices fixed by the respective sate governments.

The private sugar mills also face competition as 50% of units in India are run by cooperatives managed and owned by farmers (SUPPLIERS) resulting in higher power of suppliers as they too can enter in the future and the existing ones can supply to there mills.

Year Rs. Per quintal
1994 34.50
1995 39.10
1996 42.50
1997 45.90
1998 48.50
1999 52.70
2000 56.10
2001 59.50
2002 62.10
2003 69.50
2004 73.00
2005 74.50
2006 79.50

BARGAING POWER OF BUYERS (LIMITED)
• Government influences the price of levy sugar
• 10% of a mills produce has to be sold at levy price through public distribution system
• The quota releases of free sale sugar.

Though the government interference is favorable to the buyers

POTENTIAL ENTRANTS AND BARRIERS TO ENTRY (MEDIUM)

The government has set up minimal barriers for entry in to the sugar industry as there is short fall of production ,the
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