growth and trend position of industry -...

Growth and Trend Position of

Sugar Industry

73

CHAPTER IV

GROWTH AND TREND POSITION OF SUGAR INDUSTRY

4.1. SUGAR INDUSTRY OVERVIEW

4.1.1. HISTORY OF SUGARCANE

Sugarcane is a renewable, natural agricultural resource because it provides

sugar, besides biofuel, fibre, fertilizer and myriad of by products/co-products with

ecological sustainability1. The world demand for sugar is primarily derived from

sugar cane. Sugar cane accounts for eighty per cent of sugar produced and the rest

is made from sugar beets. Sugarcane predominantly grows in the tropical and

subtropical regions, and sugar beet predominantly grows in colder temperate

regions of the world. A few merchants began to trade in sugar - a luxury and an

expensive spice until the 18th

century. Before the 18th

century, cultivation of

sugarcane was largely confined to India. Sugarcane plantations, like cotton farms,

were a major driver of large human migrations in the 19th

and early 20th

century2.

4.1.2. SUGARCANE IN INDIA

Sugarcane is one of the significant cash crops. The production has grown

dramatically over past several years. Sugarcane growing area in India may be

broadly classified into two agro-climate regions:

Region

States

Sub - Tropical

Uttar Pradesh, Bihar, Punjab, Haryana

Tropical

Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh, Karnataka

Sugarcane industry was initially set up in the sub-tropical region. Till 1950s,

ninety per cent of area under sugarcane was in this region. With commencement of

http://en.wikipedia.org/wiki/Sugar_beet

http://en.wikipedia.org/wiki/Cotton

75

planning process, sugarcane found its route in tropical area. Sugarcane being a

tropical crop finds favourable agro climatic conditions for its growth in this region

- i.e., higher yields. Now the tropical region is already developed and reached near

saturation level. The biggest state in this region, Maharashtra faces acute problem

of lack of water which effects cultivation of sugarcane. The sub-tropical belt, with

fertile land, high water table and irrigation, appears to be the area for future

growth3.

4.1.3. INDIAN SUGAR INDUSTRY OVERVIEW

The Indian sugar industry is a key to the rural development, supporting

India's economic growth. The industry is inherently inclusive supporting over fifty

million farmers and their families, in an era where there is a need for inclusive

growth; the sugar industry is amongst the few industries that have successfully

contributed to the rural economy. It has done so by commercially utilising the

rural resources to meet the large domestic demand for sugar and by generating

surplus energy to meet the increasing energy needs of India. In addition to this, the

industry has become the mainstay of the alcohol industry4, and delivers value

addition at the farm side. In general, sugarcane price accounts for approximately

seventy percent of the ex-mill sugar price5.

The Indian sugar industry is characterised by the coexistence of private, co-

operative and public sector. It is rural centric and hence a key driver of village

level wealth creation. It has tremendous transformational opportunities to meet

food, fuel and power needs and earn carbon credit.

Sugarcane and sugar production are seasonal with more than ninety per cent

happening in the winter months of November to March. Crushing season lasts an

average for 100-150 days in a year depending on the region, weather, irrigation,

75

cultivation practices as well as sugar cane availability. The cyclicality of Indian

sugar is less driven by nature and more accentuated by radical change in

Government policies6. The sugar industry caters to an estimated twelve per cent of

rural population in these nine states through direct and indirect employment.

Effectively, each farmer7contributes to the production of 2.9 MT. of sugar every

year.

The traditional sweeteners of India like Gur and Khandsari are consumed

mostly by the rural population in the country. In the early 1930s nearly two third

of sugarcane production was used for the production of alternate sweeteners like

Gur and Khandsari. As accordingly because of the better standard of living and

higher incomes, the sweetener demand has shifted to white sugar. Currently one

third of sugarcane production is used by the Gur and Khandsari sectors8.

India has, in recent years emerged as the largest sugarcane and sugar

producing country in the world, The cane sugar industry of India spread over vast

regions of the country occupies an important place in the economic and social life

of the country in view of the wealth generated as well as the employment provided

to lakhs of people in rural areas of the country. The industry has the potential to

produce a number of essential chemicals from it‟s by products and generate extra

power for supply to other industries or to state grids.

The modern sugar industry of India since it was established in the early

thirties has witnessed vast technological changes over the past six decades, thanks

to the research and development work carried out in the field of sugar cane

manufacture in the country and also in the world sugar industry. Subsequent

growth of the industry has been accompanied by the technological advance in the

production of raw material as well as the manufacture of sugar and the country is

76

now in a position to export both raw and white sugar after meeting the internal

demand of this sweetening agent. However, technological progress is key to any

further growth in the manufacturing sector and it is essential for the technologists

engaged in the sugar cane manufacture to keep abreast of the developments taking

place in different parts of the world in the field of technology of sugar production9.

In the year 1930 there was an advent of modern sugar processing industry

in India which was started with grant of tariff protection to the sugar industry.

In the year 1930-31 the number of sugar mills increased from thirty to one

hundred and thirty five. In the year 1935-36 production was increased from

1.20 lakh tonnes to 9.34 lakh tonnes under the dynamic leadership of the private

sector. In the year 1950-51 the era of planning for industrial development began

and Government laid down targets of sugar production and consumption, licensed

and installed capacity, sugarcane production during each of the sugar companies

have been established in large sugarcane growing states like Uttar Pradesh,

Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh and are the six

states contributing more than eighty five per cent of total sugar production in

India. Fifty seven per cent of total production is together contributed by Uttar

Pradesh and Maharashtra. Indian sugar industry has been growing horizontally

with large number of small sized sugar plants set up throughout India as opposed

to the consolidation of capacity in the rest of the important sugar producing

countries and sellers of sugar, where there is greater concentration on larger

capacity of sugar plants.

77

Figure 4.1

Production of Sugarcane in Major States of India

Source:http://www.sugarcane.res.in/index.php/mis/sugarcane-statistics/281

Both sugar and sugarcane are treated as „essential commodity‟. The

Government‟s focus to give high sugar cane price to farmer and concomitantly

maintain low sugar price for the consumer is socially unexceptionable but

economically unsustainable. Low sugar price leads to unremunerative sugar cane

price and its delayed payment forcing the cultivator to switch over to other crops.

This kick-starts sugar shortage and high sugar price, in turn prompting higher

sugar cane price to lure the farmer back to sugar cane. This cycle gets repeated

endlessly with resultant spike in sugar production causing demand-supply

disequilibrium and driving sugar prices on a roller-coaster ride.

The Indian sugar factories are located largely in rural areas and directly

contributing to rural economic development and employment. Industrial user‟s viz.,

beverage, biscuit, confectionary manufacturers are the largest consumers of Indian

sugar accounting to sixty five per cent of the Indian sugar production. The comparative

sugar productions in the last two sugar seasons (Oct - Sep) are given below:

http://www.sugarcane.res.in/index.php/mis/sugarcane-statistics/281

78

Particulars

2010-11

(in lakh tonnes)

2011-12 (Estd.)

(in lakh tonnes)

Opening stock as on 1st Oct

49.80

68.00*

Production

243.94

260.00

Total availability

293.74

328.00

Demand

- Internal consumption

- Exports

207.69

26.00

215.00

35.95

Closing stock

60.05

77.05

Source: ISMA Journal May, 2012,* as posted in the website of Dept. of Food & Public Distribution

Government has been encouraging setting up of new sugar mills as well as

expansions upto 5000 TCD allowing upto one hundred per cent of sugar for new

mills and eighty per cent for expanded units, to be marketed in free market for

certain number of years. Thus the growth has been lateral. Today there are four

hundred and forty eight mills with installed capacity of 12.5 MT with average size

of 2150 TPD with some units of 10000 TCD and few of 5000 TCD.

Indian sugar production has crossed twenty six million tonnes in sugar

season 2011-12. However, production estimate for 2012-13 has been lowered by

Indian Sugar Mills Association (ISMA) to twenty four million tonnes due to poor

monsoon. ISMA has repeatedly stressed the Government that there is enough

stock to meet the domestic needs besides a marginal surplus available for exports,

despite a fall in output estimate10

.

79

4.1.4. MAJOR LEGISLATIONS

The major legislation and policies concerning the sugar industry in India

are as follows:

(i) The Essential Commodities Act, 1955

(ii) Sugar Control Order, 1966

(iii) Sugarcane Control Act, 1966

(iv) Levy Sugar Supply (Control) Order, 1979

(v) Sugar (Packing and Marking) Order, 1970

(vi) Sugar Export Promotion Act, 1958

(vii) Sugar Cess Act, 1982

(viii) Sugar Development Fund Act, 1982 and 2002

(ix) Levy Sugar Price Equalization Fund Act, 1976

(x) Molasses Control Order, 1961 and Decontrol, 1993

(xi) Excise and Custom Rules

(xii) State Sugar Policies

(xiii) Power Purchase Agreements

(xiv) Environment Norms by State Pollution Control Boards.

4.1.5. ABOUT TAMIL NADU SUGAR INDUSTRY

The agro based sugar mills play an important role in the economic growth

of rural areas with the sole aim to generate large scale direct employment.

Tamil Nadu sugar industry is responsible for about ten per cent of the total sugar

production in India. Majority of sugar units in Tamil Nadu lies with the co-operative

80

sector, with some private player‟s also gathering momentum11

. The sugar industry

generates large-scale direct employment, apart from providing indirect

employment to thousands of persons in rural areas who are involved in cultivation,

harvesting, transport of cane and other services12

.

Sugarcane is one of the most important industrial crops in our state and

also emerging as a multi product crop contributing to the production of sugar,

jaggery, alcohol, electricity, paper and other allied products. The sustenance of

the sugar mills and well being of the sugarcane growers are mutually interlinked.

Hence the major focus is towards enhancing sugarcane productivity and

production thereby improving the living standard of the sugarcane growers.

South India, Tamil Nadu in particular, has many advantages for sugar

productions are as follows:

Cane productivity and sugar recovery per unit area is highest. The average

farm size is less than a hectare and is owned by farmers. Geographically,

Tamil Nadu has the advantage of good soil and abundant water and yield is

highest among the various states in India. Farmers are willing to adopt new

farming practices and cultivation methodologies, including mechanisation, to

improve yield, access to ports to reach export market, improved development of

infrastructure facilities, to ensure adequate sugar cane availability and supply, to

ensure timely availability of newer varieties of sugar cane13

.

Around 3.50 Lakh farmers are cultivating sugarcane in Tamil Nadu which

is five per cent of the total cultivable area. During 2011-12 sugar seasons, the

sugarcane crop was cultivated in 3.16 lakh hectares in the state and the total estimated

sugarcane production was 342.52 L.Mt. During 2012-13, it is programmed to

cultivate Sugarcane in 3.60 L.Ha. with a production target of 493.50 L.Mt.

81

Out of the total sugarcane production, sixty to seventy per cent of the cane was

drawn and crushed by the sugar mills of Tamil Nadu during 2011-12 and this

crushing rate is expected to be increased during 2012-13 sugar season.

4.2. ANALYSIS OF SELECTED VARIABLES OF SUGAR INDUSTRY

The analysis of financial performance can also significantly prove through

the selected variables of a company or of the industries as a whole. All techniques

have been adopted to appraise the financial performance of the sugar industries in

this chapter. An attempt has also been made to estimate trend co-efficients for

selected variables of selected sugar industries in Tamil Nadu during the study

period by fitting a linear regression model. The liner model fitted is as follows.

P = α + βt + e

Where P is rate of selected variables, t is the time and α and βt are the parameters

[intercept and co-efficients respectively] and e is the error term. To test whether the

difference between actual selected variables and estimated selected variables was

significant or not, the following hypothesis is framed and tested. “There is no

significant difference between actual values and the trend values of selected variables

among different years”. The annual production and consumption of world sugar

industry, area, yield, production of sugarcane and sugar, consumption of sugar and

sugar recovery of Indian sugar industry, annual production, sales, crushing of sugar

canes in selected sugar companies in Tamil Nadu were analysed from the year 2002- 03

to 2011-12. Further, the annual production and consumption of world sugar industry,

area, yield, production of sugarcane and sugar, consumption of sugar and sugar

recovery of Indian sugar industry, annual production, sales, crushing of sugar canes in

selected sugar companies in Tamil Nadu over the study period are achieved through

estimation of mean, co-efficient of variation and compound annual growth rate.

82

Table 4.1

Annual Production and Consumption of World Sugar Industry

(2001-2002 to 2011-2012)

(in MT)

Year Production Consumption

Actual Growth Actual Growth

2002 - 03 137.45 100 134.67 100

2003 - 04 141.75 103.13 137.39 102.02

2004 - 05 141.1 102.66 143.1 106.26

2005 - 06 144.26 104.95 147.99 109.89

2006 - 07 148.97 108.38 151.19 112.27

2007 - 08 167.2 121.64 156.44 116.17

2008 - 09 167.1 121.57 160.69 119.32

2009 - 10 152.98 111.30 164.32 122.02

2010 - 11 159.89 116.33 167.13 124.10

2011 - 12 165.6 120.48 168.3 124.97

Mean 154.48 154.46

S.D 12.59 12.39

CV 8.15 8.02

CAGR 0.023 0.022

Source: Secondary Data

The production and consumption of world sugar industry have been shown

in Table 4.1. The highest growth of production in the year 2007-08 is 121.64 and

consumption in the year 2011-12 is 124.97. The mean values of production and

consumption of world sugar industry are 154.48 and 154.46 respectively.

83

The compound annual growth rate of world sugar production which worked out as

0.023 and in world sugar consumption is 0.022. The coefficient of variation

indicates that the annual production and consumption of world sugar industry are

moderately fluctuated during the study period.

Table 4.2

Estimates of trend co-efficients for World sugar industry (2002-03 to 2011-12)

S. No.

Particulars

P = α + βt + e

p-value

S/NS

α

βt R2

F-value

1

Production

134.57

3.32

76.4%

29.21

0.000**

S

2

Consumption

132.44

3.67

96.5%

247.15

0.000**

S

** P<0.01 S - Significant

Hypothesis: “There is no significant difference between actual value and the trend

value of production and consumption of world sugar industry among different

years”.

The results estimate of trend co-efficient for world sugar industry presented

in Table 4.2. It is clear that, the p-value is less than 0.01 per cent, the null

hypothesis is rejected at one per cent level of significance. Hence, there is

significant difference between actual value and the trend value of production and

consumption of world sugar industry among different years.

84

MA PE 1.16013

MA D 1.81778

MSD 4.90372

con

su

mp

tio

n

Pro

du

ctio

n

Figure 4.2

Trend Analysis for Production of World Sugar Industry

190

180

170

160

150

140

Trend Analysis Plot for Production Linear Trend Model

Yt = 134.568 + 3.31905* t

Variable

A ctual

F its

F orecasts A ccuracy Measures

MA PE 2.8034

MA D 4.4519

MSD 33.9457

2002 2004 2006 2008 2010

Index

2012 2014 2016

Figure 4.3

Trend Analysis for Consumption of World Sugar Industry

Trend Analysis Plot for consumption Linear Trend Model

Yt = 132.440 + 3.66977*t

190

180

170

160

150

140

Variable

A ctual

F its


130

2002

2004

2006

2008

2010

Index

2012

2014

2016

85

Table 4.3

Projections for Annual Production and Consumption of World Sugar

Industry (2012-13 to 2016-17)

(in MT)

Year

Production

Consumption

2012-13

174.40

176.48

2013-14

177.72

180.15

2014-15

181.03

183.82

2015-16

184.35

187.49

2016-17

187.67

191.16

Source: Computed

The projections obtained for world sugar industry by linear growth models

listed in Table 4.3. It shows production and consumption have been growing

marginally. The trend movement of the production units is 187.67 Mt. that will be

the highest in the year 2016-17 and the production units will be the lowest

(174.40 Mt.) in the year is 2012-13. In other hand the trend movement of

consumption the highest in the year 2016-17 that is 191.16 Mt., will be the lowest

that is 176.48 Mt. in the year 2012-13.

Table 4.4

Area, Yield, Production of Sugarcane, Production of Sugar, Consumption of Sugar and Sugar Recovery of

Indian Sugar Industry (2002-2003 to 2011-2012)

Year

Area

(ha)

Yield

(t/ha)

Sugarcane

Production

(MT)

Production of

Sugar (MT)

Consumption of

Sugar (LT)

Sugar Recovery

(per cent)

Actual Growth Actual Growth Actual Growth Actual Growth Actual Growth Actual Growth

2002-03 4361 100 64.6 100 281.575 100 20.145 100 183.84 100 10.36 100

2003-04 3938 90.30 59.4 91.95 233.862 83.05 13.546 67.24 172.85 94.02 10.22 98.65

2004-05 3662 83.97 64.8 100.31 237.088 84.20 12.69 62.99 185 100.63 10.17 98.17

2005-06 4201 96.33 66.9 103.56 281.172 99.86 19.267 95.64 189.45 103.05 10.21 98.55

2006-07 5151 118.12 69 106.81 355.52 126.26 28.328 140.62 201.6 109.66 10.16 98.07

2007-08 5055 115.91 68.9 106.66 348.188 123.66 26.357 130.84 220 119.67 10.55 101.83

2008-09 4415 101.24 64.6 100.00 285.029 101.23 14.539 72.17 230 125.11 10.03 96.81

2009-10 4175 95.73 70 108.36 292.302 103.81 18.912 93.88 210 114.23 10.19 98.36

2010-11 4944 113.37 68.6 106.19 339.168 120.45 24.394 121.09 207.36 112.79 10.17 98.17

2011-12 5093 116.79 70.3 108.82 325.9 115.74 25.8 128.07 214.12 116.47 10.17 98.17

Mean 4500 66.71 298 20.4 201.42 10.223

S.D 529 3.39 43.3 5.65 18.17 0.14

CV 11.76 5.08 14.53 27.72 9.02 1.37

CAGR 0.0174 0.0094 0.0164 0.0279 0.0171 -0.0021


86

87

The area, yield, production of sugarcane, production of sugar, consumption of

sugar and sugar recovery of Indian sugar industry have been shown in

Table 4.4. The highest growth of area in the year 2006-07 is 118.12, yield (t/ha) is

108.82 of 2011-2012, sugarcane production (million tonnes) in the year 2006-07 is

126.26, production sugar (million tonnes) is 140.62 in the year 2006-07, consumption

of sugar (LT) in the year 2008-09 is 125.11 and sugar recovery (percentage) in the

year 2007-08 is 101.83. The mean values of area, yield, production of sugarcane,

production of sugar, consumption of sugar and sugar recovery of Indian sugar

industry are 4500, 66.71, 298, 20.4, 201.42 and 10.223 respectively. The compound

annual growth rate of area, yield, production of sugarcane, production of sugar,

consumption of sugar and sugar recovery of Indian sugar industry which worked out

as 0.0174, 0.0094, 0.0164, 0.0279, 0.0171 and -0.0021 respectively. The coefficient

of variation indicates that the area, yield, production of sugarcane, production of

sugar, consumption of sugar and sugar recovery of Indian sugar industry were

moderately fluctuated during the study period.

Table 4.5

Estimates of Trend Co-Efficients for Area, Yield, Production of Sugarcane

and Sugar, Consumption of Sugar and Sugar Recovery of

Indian Sugar Industry (2002-03 to 2011-12)

S.

No.

Particulars P = α + βt + e

p-value

S/NS α βt R

2 F-value

1 Area (ha) 3941.47 101.46 33.7% 4.07 0.078 NS

2 Yield (t/ha) 62.22 0.816 53.2% 9.09 0.017* S

3 Sugarcane Production (MT)

250.77

8.58

36%

4.50

0.067

NS

4 Production of Sugar (MT) 15.67 0.859 21.2% 2.15 0.181 NS

5 Consumption of Sugar (LT) 175.45 4.72 61.9% 13.02 0.007** S

6 Sugar Recovery (Per cent) 10.29 0.0128 6.9% 0.59 0.464 NS

** P<0.01 *P<0.05 S – Significant NS – Not Significant

88


value of area, yield, production of sugarcane, sugar of production, consumption of

sugar and sugar recovery of Indian sugar industry among different years”

The results estimate of trend co-efficient for area, yield, production of

sugarcane, sugar production, consumption of sugar and sugar recovery of Indian

sugar industry are presented in Table 4.5. It is observed that, the p-value is less

than 0.01 per cent in consumption of sugar, the null hypothesis is rejected at one

per cent level of significance. Hence, there is significant difference between actual

value and the trend value of consumption of sugar in Indian sugar industry among

different years.

It is noted that, the p-value is less than 0.05 per cent in yield of sugar cane

in Indian sugar industry, the null hypothesis is rejected at five per cent level of

significance. Hence, there is significant difference between actual value and the

trend value of yield of sugar cane in the Indian sugar industry among different

years.

It is clear that, the p-value is more than 0.05 per cent in area, production of

sugar cane, sugar production and sugar recovery, the null hypothesis is accepted at

five per cent level of significance. Hence, there is no significant difference

between actual value and the trend value of area, production of sugar cane,

production of sugar and sugar recovery of Indian sugar industry among different

years.

89

MA PE 2.72048

MA D 1.76764

MSD 4.83669

Yie

ld t

/h

a

A re

a

Figure 4.4

Trend Analysis of Area of Sugar Cane Cultivated in Indian Sugar Industry

5500

5000

4500

4000

3500

Trend Analysis Plot for Area Linear Trend Model

Yt = 3941.47 + 101.461* t

Variable

A ctual

F its


MA PE 8

MA D 350

MSD 167099

Index

Figure 4.5

Trend Analysis of Sugar Cane Yield in Indian Sugar Industry

Trend Analysis Plot for Yield t/ha Linear Trend Model

Yt = 62.22 + 0.816364* t

76

74

72

70

68

66

64

62

60

Variable

A ctual

F its


Index

90

Su

ga

rca

ne

(mill

ion

to

ns)

S

ug

ar

(Mill

ion

to

ns)

Figure 4.6

Trend Analysis of Sugar Cane Production in Indian Sugar Industry

400

350

300

250

Trend Analysis Plot for Sugarcane(million tons) Linear Trend Model

Yt = 250.768 + 8.58410* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 9.60

MA D 28.22

MSD 1079.91

Index

Figure 4.7

Trend Analysis of Sugar Production in Indian Sugar Industry

Trend Analysis Plot for Sugar (Million tons) Linear Trend Model

Yt = 15.6716 + 0.859309* t

30

25

20

15

Variable

A ctual

F its


MA PE 21.9823

MA D 4.0371

MSD 22.6868

Index

91

Su

ga

r R

eco

ve

ry%

C

on

sum

pti

on

of

Su

ga

r(LT

)

Figure 4.8

Trend Analysis of Consumption of Sugar in Indian Sugar Industry

250

240

230

Trend Analysis Plot for Consumption of Sugar(LT) Linear Trend Model

Yt = 175.451 + 4.72206* t

Variable

A ctual

F its

F orecasts

220

210

200

190

180

170

A ccuracy Measures

MA PE 4.265

MA D 8.784

MSD 113.088

Index

Figure 4.9

Trend Analysis of Sugar Recovery in Indian Sugar Industry

10.6

10.5

10.4

10.3

10.2

10.1

10.0

Trend Analysis Plot for Sugar Recovery% Linear Trend Model

Yt = 10.2933 - 0.0127879* t

Variable

A ctual

F its


MA PE 0.809690

MA D 0.083479

MSD 0.016312

Index

92

Table 4.6

Projections for Area, Yield, Production of Sugarcane, Production of Sugar,

Consumption of Sugar and Sugar Recovery of Indian Sugar Industry

(2012-13 to 2016-17)

Year

Area

(ha)

Yield

(t/ha)

Sugarcane

Production

(MT)

Production

of Sugar

(MT)

Consumption

of Sugar (LT)

Sugar

Recovery

(per cent)

2012-13

5057.53

71.2012

345.193

25.1242

227.393

10.1527

2013-14

5158.99

72.0164

353.777

25.9833

232.115

10.1399

2014-15

5260.45

72.8327

362.361

26.8426

236.837

10.1271

2015-16

5361.92

73.6491

370.945

27.7019

241.564

10.1143

2016-17

5463.38

74.4655

379.529

28.5612

246.282

10.1015

Source: Computed

The projections obtained for area, yield, production of sugarcane,

production of sugar, consumption of sugar and sugar recovery of Indian sugar

industry by linear growth models are listed in Table 4.6. It shows the area, yield,

production of sugarcane, production of sugar, consumption of sugar and sugar

recoveries have been growing marginally. The trend movement of area, yield,

production of sugarcane, production of sugar and consumption of sugar is

5463.38, 74.4655, 379.529, 28.5612 and 246.282 respectively. It will be highest

for the year 2016-17 and the sugar recovery is 10.1527 in 2012-13. The area,

yield, production of sugarcane, production of sugar and consumption of sugar will

be the lowest in the year 2012-13 and the sugar recovery in the year 2016-17.

Table 4.7

Annual Production of Sugar in Selected Sugar Companies in Tamil Nadu (2002-2003 to 2011-2012)

(in MT)

Year

BASL DSCL EID RSCL SSL TASL

Actual Trend Actual Trend Actual Trend Actual Trend Actual Trend Actual Trend

2002-03 105279 -675224 62515 41481 284136 227081 148108 129770 122176 105731 103867 101592

2003-04 38403 -372769 35280 56801 184559 238717 96505 136824 28291 125662 69688 104501

2004-05 37178 -70315 34329 72121 187521 250353 116147 143878 90549 145594 90286 107410

2005-06 94774 232140 113097 87441 317850 261990 193559 150932 284849 165525 161287 110319

2006-07 110513 534595 135399 102761 374811 273626 204580 157987 306209 185457 165724 113228

2007-08 76589 837050 143172 118081 256568 285263 179162 165041 215086 205388 107542 116136

2008-09 61394 1139505 94708 133401 248157 296899 139395 172095 169103 225320 99624 119045

2009-10 73655 1441959 103224 148721 213506 308536 140136 179149 122791 245252 70607 121954

2010-11 2635452 1744414 201030 164040 289746 320172 168743 186203 336538 265183 129795 124863

2011-12 3624987 2046869 181454 179360 437591 331808 228802 193258 278635 285115 148400 127772

Mean 685822 110421 279445 161514 195423 114682

S.D 1309487 56754 80974 41073 104222 35118

CV 190.94 51.40 28.98 25.43 53.33 30.62

CAGR 0.482 0.126 0.049 0.050 0.096 0.040


93

94

The annual production of sugar by the private sugar companies in Tamil Nadu

have been shown in Table 4.7. There was fluctuation in production of sugar in all

the selected sugar companies in Tamil Nadu. The highest mean values of

Bannariamman Sugar Ltd., is 685822 Mt., in EID Parry (India) Ltd., is 279445 Mt.,

and 195423 Mt. in Sakthi Sugars Ltd.,. The compound annual growth rate of

annual production which worked out as 0.482 of Bannariamman sugars Ltd., is the

highest in the selected private sector sugar companies. The coefficient of variation

indicates that the annual productions of selected private sector sugar companies

are moderately fluctuated during the study period.

Table 4.8

Estimates of Trend Co-Efficients for Production of Sugar in Selected Private

Sector Sugar Companies in Tamil Nadu (2002-03 to 2011-12)

S.No.

Companies

P = α + βt + e

p-value

S/NS

α

Βt R2

F-value

1

BASL

977679

302455

48.9%

7.66

0.024*

S

2

DSCL

26161.4

15319.9

66.8%

16.09

0.004**

S

3

EID

215444

11636.4

18.9%

1.87

0.209

NS

4

RSCL

122715

7054.22

27%

2.96

0.123

NS

5

SSL

85799.1

19931.6

33.5%

4.03

0.079

NS

6

TASL

98682.7

2908.97

6.3%

0.54

0.485

NS

** P<0.01 *P<0.05 S- Significant NS – Not Significant

Hypothesis: “There is significant difference between actual value and the trend

value production of sugar among different years”.

95

The results estimate of trend co-efficient for production of sugar in selected

private sector sugar companies in Tamil Nadu is presented in Table 4.8. It is clear

that, the p-value is less than 0.01 per cent production of sugar in Dharani sugars

and Chemicals Ltd., the null hypothesis is rejected at one per cent level of


trend value of production of sugar in Dharani sugars and Chemicals Ltd., among

different years. It is noted that, the p-value is less than 0.05 per cent in production of

sugar in Bannariamman Sugars ltd., the null hypothesis is rejected at five per cent

level of significance. Hence, there is significant difference between actual value

and the trend value of production of sugar in Bannariamman Sugars Ltd., except

EID Parry (India) Ltd., Rajshree Sugars and Chemicals Ltd., Sakthi Sugars Ltd.,

and Thiru Arooran Sugars Ltd., among different years.

96

Ba

nn

ari

am

ma

n

Dh

ara

ni

Figure 4.10

Trend Analysis of Production of Sugar in Bannariamman Sugars Ltd.,

4000000

3000000

2000000

1000000

0

Trend Analysis Plot for Bannariamman Linear Trend Model

Yt = -977679 + 302455*t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 7.31388E+02

MA D 7.53665E+05

MSD 7.88580E+11

Index

Figure 4.11

Trend Analysis of Production of Sugar in Dharani Sugars and Chemicals Ltd.,

Trend Analysis Plot for Dharani

Linear Trend Model

Yt = 26161.4 + 15319.9*t

250000

200000

150000

100000

50000

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 37

MA D 28700

MSD 962653755

Index

97

Ra

jshr

ee

EID

Pa

rry

Figure 4.12

Trend Analysis of Production of Sugar in EID Parry (India) Ltd.,

450000

400000

350000

300000

250000

200000

Trend Analysis Plot for EID Parry Linear Trend Model

Yt = 215444 + 11636.4* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 24

MA D 63977

MSD 4784052340

Index

Figure 4.13

Trend Analysis of Production of Sugar in Rajshree Sugars and Chemicals Ltd.,

240000

220000

200000

180000

160000

140000

120000

100000

Trend Analysis Plot for Rajshree Linear Trend Model

Yt = 122715 + 7054.22* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 21

MA D 31445

MSD 1107790075

Index

98

Sa

kth

i Th

iru

A ro

ora

n

Figure 4.14

Trend Analysis of Production of Sugar in Sakthi Sugars Ltd.,

400000

300000

200000

100000

0

Trend Analysis Plot for Sakthi Linear Trend Model

Yt = 85799.1 + 19931.6* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 66

MA D 67515

MSD 6498522882

Index

Figure 4.15

Trend Analysis of Production of Sugar in Thiru Arooran Sugars Ltd.,

Trend Analysis Plot for Thiru Arooran Linear Trend Model

Yt = 98682.7 + 2908.97* t

160000

140000

120000

100000

80000

60000

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 25

MA D 26260

MSD 1040141211

Index

99

Table 4.9

Projections for Production of Sugar in Selected Private Sector Sugar

Companies in Tamil Nadu (2012-13 to 2016-17)

(in MT)

Year BASL DSCL EID RSCL SSL TASL

2012-13 2349324 194680 343445 200312 305046 130681

2013-14 2651778 210000 355081 207366 324978 133590

2014-15 2954233 225320 366718 214420 344909 136499

2015-16 3256688 240640 378354 221475 364841 139408

2016-17 3559143 255960 389990 228529 384773 142317

Source: Computed

The projections obtained for production of selected private sector sugar

companies in Tamil Nadu by linear growth models listed in the above table.

It shows the private sector sugar companies in Tamil Nadu have growing

marginally. The trend movement production of selected private sector sugar

companies in Tamil Nadu for the year 2016-17, the production units will be the

highest in EID Parry (India) Ltd., and followed by Sakthi sugars Ltd.,

The production units will be the lowest in Thiru Arooran sugars Ltd.,

Table 4.10

Annual Sales of Selected Private Sector Sugar Companies in Tamil Nadu (2002-2003 to 2011-2012)

(Rs. in crores)

Year



2002-03 345.550 514.333 134.790 32.224 1288.30 644.31 219.80 110.073 308.95 349.20 81.92 115.425

2003-04 467.310 528.095 81.500 101.114 560.37 719.17 161.22 169.040 290.09 485.43 127.36 171.629

2004-05 488.610 541.856 160.490 170.003 717.20 794.04 178.91 228.008 618.86 621.66 297.92 227.833

2005-06 632.640 555.618 315.390 238.893 926.18 868.90 256.01 286.975 879.86 757.89 298.71 284.036

2006-07 793.220 569.379 275.350 307.782 551.72 943.76 383.78 345.942 748.25 894.12 347.09 340.240

2007-08 524.720 583.141 198.540 376.672 616.45 1018.62 334.52 404.910 1023.16 1030.35 336.39 396.444

2008-09 698.840 596.902 222.610 445.561 755.57 1093.48 352.36 463.877 1372.82 1166.58 595.21 452.648

2009-10 877.040 610.664 578.310 514.451 1147.30 1168.35 522.01 522.844 2137.85 1302.81 428.10 508.851

2010-11 816.260 624.425 840.590 583.340 1536.65 1243.21 614.89 581.812 1121.27 1439.04 581.88 565.055

2011-12 118.411 638.187 614.699 652.230 1712.17 1318.07 730.76 640.779 1121.27 1575.27 588.84 621.259

Mean 576.3 342.2 981 375.4 962 368.3

S.D 235.3 250.0 419 191.6 543 182.8

CV 40.84 73.05 42.74 51.03 56.43 49.62

CAGR -0.112 0.184 0.032 0.143 0.154 0.245


100

101

The annual sales of sugar by the private sugar companies in Tamil Nadu

have been shown in Table 4.10. There was fluctuation in sales of sugar in all the

selected sugar companies in Tamil Nadu. The highest mean values of EID parry

(India) Ltd., is Rs.981 crores, in Sakthi sugars Ltd., is Rs.962 crores, and Rs.576.3

crores in Bannariamman Sugars Ltd., The compound annual growth rate of annual

sales which worked out as 0.245 of Thiru Arooran Sugars Ltd., is the highest in

the selected private sector sugar companies. The coefficient of variation indicates

that the annual sales of selected private sector sugar companies are moderately

fluctuated during the study period.

Table 4.11

Estimates of Trend Co-Efficients for Annual Sales of Selected Private Sector

Sugar Companies in Tamil Nadu (2000-01 to 2010-11)

S.

No.

Companies

P = α + βt + e

p-value

S/NS

α

Βt R2

F -value

1

BASL

500.57

13.76

3.1%

0.26

0.625

NS

2

DSCL

36.67

68.89

69.6%

18.32

0.003**

S

3

EID

569.45

74.86

29.2%

3.3

0.107

NS

4

RSCL

51.11

58.97

86.8%

52.78

0.00**

S

5

SSL

212.98

136.23

57.7%

10.91

0.01**

S

6

TASL

59.22

56.20

86.7%

52.07

0.00**

S

** P<0.01 S- Significant NS – Not Significant


value of annual sales of sugar among different years”.

102

The results estimate of trend co-efficient for sales of selected private sector

sugar companies in Tamil Nadu presented in Table 4.11. It is clear that, the

p-value is less than 0.01 per cent annual sales of sugar in Dharani sugars and

Chemicals Ltd., Rajshree sugars and Chemicals Ltd., Sakthi Sugars Ltd., and

Thiru Arooran Sugars Ltd., the null hypothesis is rejected at one per cent level of


trend value of sales of sugar in Dharani Sugars and Chemicals Ltd., Rajshree

Sugars and Chemicals Ltd., Sakthi Sugars Ltd., and Thiru Arooran sugars Ltd.,

except Bannariamman Sugars Ltd., and EID parry (India) Ltd., among different

years.

103

Dh

ara

ni

Ba

nna

ria

mm

an

Figure 4.16

Trend Analysis of Sales of Sugar in Bannariamman Sugars Ltd.,

900

800

700

600

500

400

300

200

100


Yt = 500.572 + 13.7615* t

Variable

A ctual

F its


MA PE 63.2

MA D 172.2

MSD 48278.3

Index

Figure 4.17

Trend Analysis of Sales of Sugar in Dharani Sugars and Chemicals Ltd.,

Trend Analysis Plot for Dharani Linear Trend Model

Yt = -36.6652 + 68.8895*t

1000

800

600

400

200

0

Variable

A ctual

F its


MA PE 38.0

MA D 100.0

MSD 17100.1

Index

104

MA PE 32

MA D 278

MSD 112061

EID

Pa

rry

Ra

jsh

ree

Figure 4.18

Trend Analysis of Sales of Sugar in EID Parry (India) Ltd.,

1750

1500

1250

1000

750

500


Yt = 569.451 + 74.8618* t

Variable

A ctual

F its


Index

Figure 4.19

Trend Analysis of Sales of Sugar in Rajshree Sugars and Chemicals Ltd.,


Yt = 51.1053 + 58.9674* t

900

800

700

600

500

400

300

200

100

0

Variable

A ctual

F its


MA PE 17.47

MA D 54.12

MSD 4348.45

Index

105

MA PE 17.51

MA D 50.20

MSD 4004.21

Sa

kth

i Th

iru

A ro

ora

n

Figure 4.20

Trend Analysis of Sales of Sugar in Sakthi Sugars Ltd.,

2500

2000

1500

1000

500

0


Yt = 212.975 + 136.230* t

Variable

A ctual

F its


MA PE 24

MA D 233

MSD 112291

Index

Figure 4.21

Trend Analysis of Sales of Sugar in Thiru Arooran Sugars Ltd.,


Yt = 59.2213 + 56.2038*t

900

800

700

600

500

400

300

200

100

0

Variable

A ctual

F its


Index

106

Table 4.12

Projections for Annual Sales of Sugar in Selected Private Sector Sugar

Companies in Tamil Nadu (2012-13 to 2016-17)

(Rs. in crores)

Year

BASL

DSCL

EID

RSCL

SSL

TASL

2012-13

651.948

721.119

1392.93

699.747

1711.50

677.463

2013-14

665.709

790.009

1467.79

758.714

1847.73

733.666

2014-15

679.471

858.898

1542.65

817.681

1983.96

789.870

2015-16

693.232

927.788

1617.52

876.649

2120.19

846.074

2016-17

706.994

996.677

1692.38

935.616

2256.42

902.278

Source: Computed

The projections obtained for annual sales of selected private sector sugar

companies in Tamil Nadu by linear growth models are listed in Table 4.12.

It shows the private sector sugar companies in Tamil Nadu have been growing

marginally. The trend movement sales of selected private sector sugar companies

in Tamil Nadu for the year 2016-17, the sales will be the highest in Sakthi sugars

Ltd., and followed by EID Parry (India) Ltd., the annual sales will be the lowest in

Bannariamman Sugars Ltd.,

Table 4.13

Annual Crushing of Sugar Canes by Selected Sugar Companies in Tamil Nadu (2002-2003 to 2011-2012) (in MT)

Year



2002-03 977246 148265 665951 541022 2954526 2358890 1429034 1273653 1247672 1284803 977246 1358421

2003-04 370187 380227 372919 670519 1937186 2503029 928868 1364093 278226 1451099 370187 1289951

2004-05 387288 612189 389126 800015 2052195 2647168 1136340 1454532 992062 1617395 387288 1221482

2005-06 944189 844150 1264649 929512 2825282 2791308 2045334 1544972 3046861 1783691 944189 1153013

2006-07 1089582 1076112 1500723 1059008 4106477 2935447 2140204 1635411 3240162 1949988 1089582 1084544

2007-08 775437 1308074 1547093 1188504 3462929 3079586 1916428 1725851 3074090 2116284 775437 1016074

2008-09 579221 1540036 1055849 1318001 2624760 3223725 1455989 1816290 1847036 2282580 579221 947605

2009-10 750835 1771997 1204317 1447497 2473677 3367865 1594328 1906730 1348315 2448876 750835 879136

2010-11 2585486 2003959 1328721 1576994 2835736 3512004 1725139 1997169 2356303 2615173 2585486 810667

2011-12 3461458 2235921 1908214 1706490 4802397 3656143 2434644 2087609 2900630 2781469 3461458 742197

Mean 1192093 1123756 3007517 1680631 2033136 1050309

S.D 1015264 508011 893928 465826 1038655 503682

CV 85.17 45.21 29.72 27.72 51.09 47.96

CAGR 0.151 0.124 0.055 0.061 0.098 0.151


107

108

The annual crushing of sugar cane by the private sugar companies in

Tamil Nadu has been shown in Table 4.13. There was fluctuation in crushing of

sugar cane in all the selected sugar companies in Tamil Nadu. The highest mean

values of EID Parry (India) Ltd., is 3007517 Mt., in Sakthi Sugars Ltd., is

2033136 Mt., and 1680631 Mt. in Rajshree sugars and Chemicals Ltd., and the

compound annual growth rate of crushing of sugar cane which worked out as

0.151 of Bannariamman Sugars Ltd., and Thiru Arooran Sugars Ltd., is the highest

in the selected private sector sugar companies. The coefficient of variation

indicates that the crushing of sugar cane of selected private sector sugar companies

are moderately fluctuated during the study period.

Table 4.14

Estimates of Trend Co-Efficients for Annual Crushing of Sugar Canes by

Selected Sugar Companies in Tamil Nadu (2002-03 to 2011-12)

S. No.

Companies

P = α + βt + e

p-value

S/NS

α

Βt R2

F-value

1

BASL

83696.7

231962

47.9%

7.34

0.027*

S

2

DSCL

411526

129496

59.6%

11.78

0.009**

S

3

EID

2214750

144139

23.8%

2.5

0.152

NS

4

RSCL

1183214

90439.5

34.6%

4.22

0.074

NS

5

SSL

1118506

166296

23.5

2.46

0.156

NS

6

TASL

1426890

68469.2

47.9%

7.34

0.027*

S

** P<0.01 *P<0.05 S- Significant NS – Not Significant


value of crushing capacity of sugar cane among different years”

109

The results estimate of trend co-efficient for annual crushing capacity of

selected private sector sugar companies in Tamil Nadu are presented in

Table 4.14. It is clear that, the p-value is less than 0.01 per cent and 0.05 per cent

in crushing of sugar cane in Dharani sugars and Chemicals Ltd., and

Bannariamman Sugars Ltd., Thiru Arooran sugars Ltd., respectively the null

hypothesis is rejected at one per cent and five per cent level of significance

respectively. Hence, there is significant difference between actual value and the

trend value of crushing of sugar cane in Dharani sugars and Chemicals Ltd.,

Bannariamman Sugars Ltd., and Thiru Arooran sugars Ltd., except EID Parry

(India) Ltd., Rajshree sugars and Chemicals Ltd., and Sakthi sugars Ltd., among

different years.

110

Ba

nn

ari

am

ma

n

D h

a r a

n i

Figure 4.22

Trend Analysis of Crushing of Sugar Cane by Bannariamman Sugars Ltd.,

3500000

3000000

2500000

C 2000000

1500000

1000000

500000

0


Yt = -83696.7 + 231962*t

Variable Actual

Fits

Forecasts

Accuracy Measures

MAPE 5.85912E+01

MAD 5.49911E+05 MSD 4.83783E+11

Index

Figure 4.23

Trend Analysis of Crushing of Sugar Cane by Dharani Sugars Ltd.,

T r e n d A n a l y s i s P l o t f o r D h a r a n i

L i n e a r T r e n d M o d e l

Y t = 4 1 1 5 2 6 + 1 2 9 4 9 6 * t

2 5 0 0 0 0 0

2 0 0 0 0 0 0

1 5 0 0 0 0 0

1 0 0 0 0 0 0

5 0 0 0 0 0

V a r ia b le

A c tu a l

F its

F o r e c a s ts

A c c u r a c y M e a s u r e s

M A P E 3 . 5 7 5 4 5 E + 0 1

M A D 2 . 9 2 4 1 9 E + 0 5

M S D 9 . 3 9 2 1 0 E + 1 0

In d e x

110

111

Ra

jshr

ee

EID

Pa

rry

Figure 4.24

Trend Analysis of Crushing of Sugar Cane by EID Parry (India) Ltd.,

5000000

4500000

4000000

3500000

3000000

2500000

2000000


Yt = 2214750 + 144139*t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 2.25835E+01

MA D 6.66047E+05

MSD 5.47794E+11

Index

Figure 4.25

Trend Analysis of Crushing of Sugar Cane by Rajshree Sugars Ltd.,

2600000

2400000

2200000

2000000

1800000

1600000

1400000

1200000

1000000


Yt = 1183214 + 90439.5* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 2.18088E+01

MA D 3.39630E+05

MSD 1.27815E+11

Index

112

Thir

u A

roo

ran

Sa

kth

i

Figure 4.26

Trend Analysis of Crushing of Sugar Cane by Sakthi Sugars Ltd.,

4000000

3000000

2000000

1000000

0


Yt = 1118506 + 166296* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 7.20297E+01

MA D 7.26062E+05

MSD 7.42774E+11

Index

Figure 4.27

Trend Analysis of Crushing of Sugar Cane by Thiru Arooran Sugars Ltd.,

2000000

1500000

1000000

500000

0


Yt = 1426890 - 68469.2* t

Variable

A ctual

F its

F orecasts

A ccuracy Measures

MA PE 6.23971E+01

MA D 3.61646E+05

MSD 1.89649E+11

Index

113

Table 4.15

Projections for Annual Crushing of Sugar Cane by Selected Private Sector

Sugar Companies in Tamil Nadu (2012-13 to 2016-17)

(in MT)

Year

BASL

DSCL

EID

RSCL

SSL

TASL

2012-13

2467882

1835986

3800283

2178048

2947765

673728

2013-14

2699844

1965483

3944422

2268487

3114061

605259

2014-15

2931806

2094979

4088561

2358927

3280357

536790

2015-16

3163768

2224476

4232701

2449366

3446654

468320

2016-17

3395729

2353972

4376840

2539806

3612950

399851

Source: Computed

The projections obtained for annual crushing of sugar cane by selected

private sector sugar companies in Tamil Nadu by linear growth models listed in

Table 3.15. It shows the private sector sugar companies in Tamil Nadu have been

growing marginally. The trend movement crushing of sugar cane by selected

private sector sugar companies in Tamil Nadu for the year 2016-17, the crushing

of sugar cane will be the highest in EID Parry (India) Ltd., and followed by

Thiru Arooran sugars Ltd., The crushing of sugar cane units will be the lowest in

Dharani sugars and Chemicals Ltd.,

114

REFERENCES

1. http://www.sugarcane crops.com/introduction/ 2. http://en.wikipedia.org/wiki/sugarcane

3. http://www.fao.org/docrep/005/X0513E/x0513e16.htm

4. ISMA Indian sugar year book 2005-06

5. KPMG Analysis

6. www.industrialeconomist.com/March%202011/46.pdf

7. AC Nielsen, Business World Marketing White book 2006. Sugar production

for the year 2007 has been estimated to be 27 million MT Source: ISMA

8. http://www.indianmirror.com/indian-industries/sugar.html 9. http://www.sugarresearch.library.qut.edu.au/108/1/Cane_Sugar_Manufacture

_in_India.pdf 10. http://www.ponnisugars.com/attachments/INDUPD.pdf

11. http://business.mapsofindia.com/sugar-industry/Tamil Nadu.html

12. http://www.tn.gov.in/sugar/dept.htm

13. http://www.eidparry.com/the-company/about-us.aspx, Profile: E.I.D-Parry

(India) Ltd

http://en.wikipedia.org/wiki/sugarcane

http://www.fao.org/docrep/005/X0513E/x0513e16.htm

http://www.industrialeconomist.com/March%202011/46.pdf

http://www.indianmirror.com/indian-industries/sugar.html

http://www.sugarresearch.library.qut.edu.au/108/1/Cane_Sugar_Manufacture

http://www.ponnisugars.com/attachments/INDUPD.pdf

http://business.mapsofindia.com/sugar-industry/Tamil

http://www.tn.gov.in/sugar/dept.htm

http://www.eidparry.com/the-company/about-us.aspx

growth and trend position of industry -...

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