Medium Term Outlook for Indian Agriculture Sugar Sector

Medium Term Outlook for Indian Agriculture: Sugar Sector Roshan Tamak Business Head (Sugar), Olam Agro India Ltd

Global Sugar Industry Brazil and India are the highest sugar producing nations in the world

Global per capita consumption of sugar

Indian Sugar Industry a snapshot Crushing Season Particulars UOM 2010 -11 2011 -12 Sugar Factories in Operation Nos 527 529 Crushing Capacity Million TCD 24, 2 24, 8 Sugarcane Crushed mmt 239, 8 256, 9 Sugar Produced Mmt 24, 4 26, 3 Sugar Recovery % 10, 2 MT/Hect 70, 1 70, 3 Yield of Sugarcane

Sugarcane Area Contribution of Major States

India: Area under Sugarcane cultivation *above numbers are in 000 Hectares Season States 2002 -03 2003 -04 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 Average India 4520 3938 3662 4201 5151 5043 4408 4202 4944 5086 4516 Andhra Pradesh 233 209 210 230 264 247 200 158 192 204 215 Gujarat 203 176 197 214 208 197 192 188 202 197 Karnataka 383 243 178 219 326 296 210 326 421 430 303 Maharastra 573 443 324 501 1049 1088 770 736 964 1022 747 Tamil Nadu 261 192 232 336 391 352 323 314 336 382 312 Uttar Pradesh 2149 2030 1955 2156 2247 2179 2058 1977 2125 2162 2104 There is no significant expansion in the acreage of sugarcane

India- Sugar recovery % Season States 2002 -03 2003 -04 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 Average India 10, 36 10, 22 10, 17 10, 21 10, 16 10, 55 10, 03 10, 20 10, 17 10, 25 10, 23 Andhra Pradesh 10, 10 10, 31 10, 65 10, 05 9, 70 10, 12 9, 89 9, 28 9, 75 9, 79 9, 96 Gujarat 10, 58 10, 93 10, 76 10, 82 10, 64 10, 67 10, 72 10, 53 9, 99 10, 61 10, 63 Karnataka 10, 79 10, 11 10, 82 10, 57 10, 87 10, 28 10, 70 10, 91 11, 14 10, 64 Maharastra 11, 64 10, 92 11, 39 11, 68 11, 39 11, 92 11, 44 11, 51 11, 29 11, 65 11, 48 Tamil Nadu 9, 88 9, 92 9, 64 9, 25 9, 32 9, 62 8, 93 9, 08 9, 31 9, 42 Uttar Pradesh 9, 53 9, 82 9, 79 9, 51 9, 47 9, 79 8, 94 9, 13 9, 14 9, 07 9, 42 Sugar recovery is more or less stagnant over the decade

India –Sugarcane yield /hec (In Tons per hectares) Season States 2000 - 2001 - 2002 - 2003 - 2004 - 2005 - 2006 - 2007 - 2008 - 2009 - 2010 - 2011 01 02 03 04 05 06 07 08 09 10 11 -12 Average India 69 67 64 59 65 67 69 68 67 66 69 70 66 Andhra Pradesh 82 83 66 72 75 77 82 82 78 74 77 82 77 Gujarat 71 71 69 72 74 74 73 81 73 70 76 70 73 Karnataka 103 81 85 66 80 83 88 83 83 90 94 90 85 Maharastra 83 78 74 58 63 78 75 81 79 85 85 80 76 Tamil Nadu 105 102 93 92 101 104 105 108 106 101 108 103 102 Uttar Pradesh 55 58 56 56 61 58 60 57 52 59 57 57 Sugarcane productivity is almost stagnant over the years. 60

Limitations in increasing productivity Ø Cyclicality in sugar Industry Ø Unpredictable climate Ø Depleting water resources Ø Crop competition and food security challenge Ø Land fragmentation and small land holdings Ø Depleting soil health/monoculture Ø Increasing cost of cultivation-inputs/labor etc Ø Improper sugarcane varietal mix and low sugar yield Ø Lack of focus on Cane research and development

Sugar Production and Sugar Consumption 300. 0 300 283. 3 255. 0 263. 7 230 219 185. 3 200. 0 210 192. 7 201. 4 185. 2 225 185 200 183. 84 172. 85000001 167. 81 162. 01 199 189. 0 185 145. 4 135. 5 126. 9 100. 0 100 Sugar Production 0. 0 2000 -01 2001 -02 2002 -03 2003 -04 Sugar Consumption 2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 0

India- State wise per capita consumption States with relatively lesser demand will soon catch up with the high sugar consumption Wide gap from 10 -28 Kg/Person

India- Projected domestic sugar consumption Increasing demand expected to reach 30 million tons by 2020

Shared Vision Consumers Policy Makers Fulfill customers needs Farmers & Millers Self sufficiency to meet domestic demand Economic profit driven growth Social welfare of stakeholders Risk and cost minimization Contribution to India’s energy requirement Towards a more efficient sugar industry Collaboration between each other

Potential & Opportunities

Action Agenda Ø Implementation of sugar & cane price linkage formula ( Dr Rangarajan Committee) Ø Integration of Indian commodity exchanges with the world market Ø Stable trade policy-import/export (Timely decisions) Ø Mandatory support for Cogen Power (tariff support/REC benefit) Ø Implementation of Ethanol Blending policy (10% -recently announced) Ø Proper coordination for research and development (IISR, SBI, VSI, UPSCR) Ø Integration of all Govt schemes like SDF, NFSM, RKVY for the purpose of sugarcane development and infrastructure improvement Ø Water harvesting/drip irrigation to be taken up as a major initiative Ø Development of Micro entrepreneurs/custom hiring model Ø Training modules for growers/staff to be developed and implemented

Thank you!