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Commodity
SUGAR
Description | Overview | History | Cultivation pattern | Sugar producing countries | Indian sugar market | Major trading centers
Description


Sugar or sucrose is a carbohydrate that is derived as an end product of the process called photosynthesis, a process from which plants convert sun’s energy to produce their food. Sugar is used by the plant cells as a source of energy. That is why it naturally occurs in all the fruits and vegetables.

Generally sugar is consumed to add sweet taste to many cuisines and recipes and also for preserving them. It is derived from the major sources of sugar i.e. sugarcane and sugarbeet when the juice of these resources is firstly evaporated and then processed with the help of a process named crystallization. It appears as a white or transparent, crystal shaped substance. The word is taken from the Sanskrit word 'sharkara' which means a sweetener only.

Overview


Sugar is a very important sweetening agent that is widely used and traded throughout the world. It has gained its importance gradually with time and now no cuisines in any culture can consider itself complete without sugar. The main sources from which sugar is extracted are sugarcane (bamboo like grass) and sugarbeet (small tubular plants with white tap root), providing the maximum sugar level than any other crop i.e. 12 to 20% of the dry weight of the plant. Sugar from sugarcane is produced in the warmer regions of the world and sugar from sugarbeet is produced in the cooler areas. The processes of production from these different sources are very much different unlike the final output i.e. refined sugar produced. Sugarcane and sugarbeet contribute in production of sugar in the ratio 3:1 respectively. In fact this ratio is further moving into the direction of dominance of sugarcane in the production process as producing sugar from sugarbeet is relatively expensive.

 

Sugarcane is produced in around 120 countries of the world and the world’s total production of sugar figures around 135 to 145 million tons. Brazil stands at the top regarding the production level followed by India and the European Union. Over 3/4ths of the total sugar produced is consumed domestically in the countries in which it is produced, and the rest is traded around the globe which is often termed as World Sugar. The consumption figures of sugar in the world in 2002-03 were around 135 million tons and these figures have shown an increasing trend during the last few years.

 

As most of the sugar producing countries are indulged in self consumption of sugar, the exports of sugar are concentrated among a very few countries. Major sugar exporting countries are: -

  • Brazil

  • European Union

  • Thailand

  • Australia

  • Cuba

  • India

  • United states

  • China

The world exports of sugar hover around 40 million tons and the leading sugar exporting country is Brazil exporting to around 55% of its total produce. Brazil is followed by European Union, Thailand, Australia and Cuba in this list. These top five exporting countries constitutes almost 65% of the world total exports. Australia’s dependency on its sugar exports is much more higher than that of any country as it exports over 75% of its total sugar production.

 

Unlike exports, imports of sugar are diversified in nature, among more than 100 countries. The sugar imports account to around 38 million tons. The major importers of sugar in the world are: -

  • Russia

  • Indonesia

  • European Union

  • Japan

  • USA

  • Korea

  • Malaysia

  • China

  • Algeria

  • Iran

The leading sugar importing country is Russia with an average of 6 million tons. Indonesia, European Union, Japan, Korea stand on 2nd, 3rd, 4th and 5th place respectively in the context of sugar imports. Being so much of imports taking place throughout the world, there are different sugar import and production policies practiced by different nations to protect their domestic produce from competition. A voluntary body named International Sugar Organization looks upon the trade of world sugar.

History

Sugarcane, the main source of sugar, is said to have originated in New Guinea. This crop spread over rest of the world in the pre-historic times but initially it was consumed raw. The process of sugar production, i.e. by evaporating the cane juice, came from India in around 500BC. In Alexander’s reign, the people from west termed this process as “honey produced without bees”.

For a long time, the rest of the world did not know the process of cane sugar production because it was kept as a secret as it earned them a good amount of profits. Finally Arabs broke this secret and started growing sugarcane in Spain and other parts of Europe and Africa around 7th century AD. It started gaining popularity in the European continent and it was considered a luxurious product at that time. A large amount of sugar was imported from the East as it started giving competition to honey as a sweetening agent. Christopher Columbus was the person who took sugarcane to the new world. This is how the concept of sugar production spread in Europe and with the European invasions in the rest of the world; sugarcane was especially cultivated to extract sugar from it.

Initially, the cane was beaten up to extract the juice but after the invention of a press, the quantity extracted was raised to almost a double. The concept of extracting sugar from the sugarbeet or beetroot came into notice in the eighteenth century in Germany. With other inventions, modern methods of extracting juice from the cane and sugar from the juice were developed.

Cultivation pattern

Sugar is mostly derived from sugarcane and sugarbeet crops and the cultivation pattern of both these crops are quite distinguished from each other. While sugarcane is generally grown in the tropical regions of the world that are featured with hot and humid climate, sugarbeet is cultivated in the temperate areas featuring much cooler climate than tropical areas.

Sugarcane needs a minimum of 8 months of high temperatures and frost-free weather conditions to prosper. Both heavier soil with adequate irrigation and lighter soils with heavy clays and proper drainage are suited for sugarcane cultivation. The level of production of this crop is dependent upon the extent of the rainfall received. It is an annual crop that is planted in the months of February to April and harvested during the months of October to March.

The sugarbeet, on the other hand, is a crop, the roots of which are used to produce sugar. It is sown in the months of March and April and harvested in the months of September to December.

Sugar producing countries

 

  • Brazil*

  • India*

  • European Union

  • China

  • United States of America

  • Thailand*

  • Australia*

  • Mexico*

  • Cuba*

  • Indonesia

  • Pakistan*

In the list above, the countries marked with * sign produce sugar from sugarcane. The rest of the countries produce it from sugarbeet except US as it is indulged in both cane sugar and beet sugar production. World’s total production of sugar sums up to around 135-145 million tons. The largest producer of sugar in the world is Brazil with an annual production of around 24 million tons, India being the second with about 22 million tons of sugar, European Union standing at the third place with approximately 18.5 million tons. Among other important contributing countries to the world production, China, Thailand and USA are the most important. The production of sugar is concentrated in the hands of these few producing countries that contribute to about 3/4ths of the production. . The area which is cultivated for sugarcane production is dominated by the Asian continent followed by the South American continent.

Production of sugar in India

India is the second largest producer of sugar in the world after Brazil and is indulged in the production of cane sugar and not beet sugar. It produces approximately 22 million tons of sugar annually. The major states that are producing sugarcane in India are: -
  • Maharashtra

  • Uttar Pradesh

  • Karnataka

  • Tamil Nadu

  • Andhra Pradesh

  • Gujarat

These states contribute around 85% sugarcane production of the country. The other important producers of sugar in the country are Assam, Bihar, Gujarat, Haryana, Kerala, Madhya Pradesh, Orissa, Punjab, Rajasthan and West Bengal. The production of sugar in the country highly depends upon the availability of sugarcane. The leading producer of sugar is Maharashtra producing about 6 million tons of sugar followed by Uttar Pradesh and Karnataka. Uttar Pradesh constitutes the maximum area covered and the sugarcane production in the country. Two grades of sugar namely S-30 and M-30 are produced in India; grade S-30 dominating the share in total production.

The production of sugarcane in India has increased during the last ten years and is still on an increasing trend. The productivity of sugarcane in the northern areas of the country is lower than the productivity in southern areas. In India, sugar is grown over 4 million hectares of land

Indian sugar market

As history foretells, India had been connected to sugar for a long time. In fact, it is known as the place of origin of sugar. India maintains this reputation of sugar connection by producing the second largest quantity of sugar in the world and also being the largest consumer of sugar. Indian sugar industry is the largest processing industry for agricultural products constituting of both organized and unorganized sectors.

 

India had been the largest producer of sugar in the world for 7 out of 10 years but now Brazil has taken a lead from India. Indian production from both the sectors sums up to 22 million tons. Indian share in the world’s total production has shown an increasing trend in the past few years and currently India is contributing to around 16%. The country has been indulged in the production of cane sugar rather than beet sugar as India’s tropical weather conditions support sugarcane production. Maharashtra holds the lead in the production of cane and sugar in the country. The consumption level of sugar in India reaches up to 18.5 million tons annually making India the largest consumer of sugar in the world. This demand and consumption level is still showing a rising trend. The government largely controls the demand and supply of sugar in India and the prices fluctuate according to the government releases of sugar.

 

India had been an exporter of sugar but the export-import policy depends on the production-demand mismatch in the country. The crushing period difference between India and other countries gives an advantageous edge to Indian exports. Exports from India show a rising trend as a result of the upcoming policies of free international trade. The trade figures of India correspond to the mark of 1.5 million tons. The Indian sugar industry has successfully satisfied the domestic demand till now. That is why India no imports of sugar were done during the past few years.

Market Influencing Factors

  • Factors pertaining to the climatic conditions and rainfall

  • Production of sugarcane in the country

  • Sales of sweets including candies and confectioneries

  • Political factors

  • Technological changes resulting in development of new uses of sugar

  • Income of the consumer

Major trading centers of sugar



The major trading centers of sugar throughout the globe are

  • New York (NYBOT)

  • Brazil

  • Australia

  • United States of America

  • Cuba

  • Philippines

  • China

  • Bangladesh

  • Iran

In India, sugar is traded at the following markets

  • Muzzafarnagar

  • Mumbai

  • Delhi

  • Ludhiana

  • Kolkata

  • Hyderabad

  • Chennai

Also, sugar is traded at the commodity exchanges in India namely National Commodity & Derivatives Exchange ltd, Multi Commodity Exchange of India ltd and National Multi Commodity Exchange of India ltd.

 
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