Project EcoA PROJECT ON DECLINE IN SUGAR PRODUCTION ITS IMPACT ON ECONOMY

8/9/2019 Project EcoA PROJECT ON DECLINE IN SUGAR PRODUCTION ITS IMPACT ON ECONOMY

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MATRUSHRI

KASHIBEN

MOTILAL PATEL

SENIOR COLLEGEOF COMMERCE

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SUBJECT:

MANAGERIAL ECONOMICS

PROJECT NAME:

A PROJECT ON DECLINE INSUGAR PRODUCTION ITS

IMPACT ON ECONOMY

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CLASS:

S.Y.BMS (3rd

semester)

GROUP NAME:

SMRITI.P.SHINGANE (08)NAYANA.K.KASHIVALE (03)

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DECLEARATION

WE, SMRITI P.SHINGANE & NAYANA

K.KASHIVALE of S.Y.BMS (3rd semester) of

MAT.KMP college. Hereby declare that I

have complete my project on

MANAGERIAL ECONOMICS for the

academic year 2009-10

AKNOWLEDGMENT

IT is indeed a matter of great pleasure and proud

privilege to be able to present this project on

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managerial economics heartfelt gratitude to everyone

who helped me in my project

I would like to thank principle of MAT. Kmp collegemrs. Lekha mam ,Who provided me this wonderful

opportunity I am in short of words to empress my dee

sense of gratitude to my guide.

Miss. Poonam teacher who guided us.

Index

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CHAPTER NO. 1

1.1 Introduction

1.2 World Scene

1.3 Indian Scene

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1.1 INTRODUCTION

Sugar(sucrose) is a carbohydrate that occurs naturally in every fruit

and vegetable. It is the major product of photosynthesis, the process

by which plants transform the sun's energy into food. Sugar occurs in

greatest quantities in sugar cane and sugar beets from which it is

separated for commercial use.

For sugar cane, this is accomplished by :

a) Pressing the cane to extract the juice;

b) Boiling the juice until it begins to thicken and sugar begins to

crystallize;

c) Spinning the crystals in a centrifuge to remove the syrup,

producing raw sugar;

d) Shipping the raw sugar to a refinery where it is washed and filtered

to remove remaining non-sugar ingredients and color; and

e) Crystallizing, drying and packaging the refined sugar.

Beet sugar processing is similar, but it is done in one continuousprocess without the raw sugar stage. The sugar beets are washed,

sliced and soaked in hot water to separate the sugar-containing juice

from the beet fiber. The sugar-laden juice is purified, filtered,

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concentrated and dried in a series of steps similar to cane sugar

processing.

1.2 WORLD TRADE SCENE

For sugar year 2002-03 ending September 2003, world sugar

production is over 6 million tonnes in excess of global consumption.

World production of sugar is now estimated at 147.90 million tonnes

(raw value) signifying an increase of 4.5 million tonnes over previous

year. On the other hand, world sugar consumption is expected to

grow 2.7 percent from the previous year's level. The import demand

however is likely to fall by 1.3 million tonnes. World sugar production

in 2003-04 is estimated at 145.4 million tonnes (raw value) against

140.4 million tonnes in 2002-03. World consumption of sugar is

estimated marginally higher at 143 million tonnes in 2003-04 from

142.80 million tonnes in the previous year. World sugar surplus,

however, is marginally higher at 2.35 million tonnes compared with

2.40 million tonnes in 2002-03.

The aggregate production in five principal exporter countries in 2003-

04 is estimated to stand at 57.51 million tonnes which is expected to

increase to 62.10 million tonnes in 2004-05. These countries include

EU, Brazil, Australia, Thailand and South Africa.

Global exports of sugar in 2003-04 are estimated at 45.25 million

tonnes against 46.14 million tonnes in 2002-03. Brazil is likely to

emerge as the largest exporter.

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1.3 INDIAN SCENE

Sugar is India's second largest agro-processing industry. Sugar area

accounts for 2.2 percent of country's total cropped area. India's sugaryear (SY) is October-September. India's domestic sugar market is

estimated at Rs. 250 billion.

There are 450 sugar factories accounting for 57-60 percent of India's

total sugar production. Indian sugar industry's total installed capacity

(estimated) stands at 16.5 million tonnes per annum while actual

production stood at 18.5 million tonnes. Production during 2001-02 isestimated at 17.2 million tonnes.

After Brazil, India is world's second largest sugar producer. The

country produced 20.01 million tonnes in SY 2002-03 signifying 1.51

million tonnes increase over previous year's production of 18.51

million tonnes. The 2003-04 production is estimated at around 14

million tonnes or about 6 million tonnes lower than the previous year.

The shortfall is attributed to drought situation in Maharashtra,

Karnataka and Andhra Pradesh. Production in Maharashtra alone is

likely to be 3 million tonnes lower than the last year's production of

6.2 million tonnes.

India's sugar consumption in 2002-03 is estimated at 18.2 million

tonnes against 16.5 million tonnes in 2001-02, according to ISMA.

Sugar consumption in 2003-04 is estimated at 18.5 million tonnes.

The domestic packaged sugar market is estimated at 40,000 tonne.

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According to USDA's provisional estimate, India's sugar stocks at the

end of 2001-02 stood at 12.11 million tonnes (raw value) which is

equivalent to over eight and a half months' domestic consumption.

The stock at the end of 2002-03 is estimated to be substantially lower

at 10.66 million tonnes. According to India's federal government

norm, 'safe' buffer stock is equivalent to three months' domestic

consumption.

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CHAPTER: 2

3.1 Sugar Import policy

3.2 Sugar export policy

3.1 Sugar Import policy

After the uncertainty of over 2 years, the new millennium appears to

have bought a ray of hope for the beleaguered Indian sugar industry,

with the Government of Indias conscious efforts to provide a, long

denied, level playing field to the indigenous sugar vis-a-vis imported

sugar. On 29th December 1999,two important announcements were

made. First, that the import duty on sugar was increased to 40% and

the second, the levy free ratio of 40:60 was relaxed to 30:70 w.e.f. 1st

January 2000.

The imported sugar was free of levy obligation, release control,

bagging requirement into gunny bags etc. applicable to indigenous

sugar. Government amended the Sugar Control Order in June 1999

creating an enabling provision for subjecting imported sugar to the

mechanism of monthly releases. However, due to further decline in

the International sugar prices, even this increase in import duty did

not have much impact on unabated imports

Though the industry had been asking the Government to increase the

import duty for long time, the decisions had been delayed mainly due

to an apprehension that it would lead to price rise. The fact that there

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was no rise in prices following the import duty hikes has provided this

apprehension to be baseless. Besides, increase in import duty,

imported sugar also needs to be subjected to levy obligation as

applicable to indigenous sugar.

3.2Sugar Export Policy

The Government of India have permitted an export of 10 lakh of

Sugar from India with a view to liquidating atleast a part of the

excessive sugar stocks which have accumulated with the industry for

a variety of reasons. The safety level of stocks taken into account by

the Government in policy planning are much lower, equal to about

2/12 months requirement of free sale sugar and 3 months

requirement of levy sugar i.e. total quantity of no more than 40 lakh

tones on an optimistic basis. Since no other country in the world

follows dual pricing policy of free sale and levy sugar the above step

is intended to place the Indian sugar industry on an even keel to

facilitate exports. The government's decision to free sugar export

from levy obligations a welcome step.

Limitation of time has created certain inadequacies. Firstly, it ignoresthe fact that actual shipment of sugar is a 45 to 60 days operation in

India, as opposed to much shorter time lead in other exporting

countries. A major handicap is that under Governments order mills

have to pack sugar in 100kg. Jute bags. No country accepts such

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large packs of sugar, which is also against the ILO convention for

handling. Secondly the current crushing season is already over and

the entire stocks with the factory are in 100 kg bags. Under the

circumstances, sugar mills have to re-fill 50 kg bags from out of sugar

already packed in 100kg gunny bags. This is a time consuming job. In

India the price of sugarcane moves only in one direction. The

Government of India announces an increase in the Statutory

Minimum Price of sugarcane every year and the State Government

go a step further in announcing much higher state advised prices

year after year.

A quick exercise reveals that at the prevailing higher international

prices, millers on an average cannot hope to realise even the price of

levy sugar on sugar export on ex-factory basis. Indeed, considerable

sacrifice is called for on the part of the industry to ship sugar out of

the country. The president of India on January 15,1997, repealing the

Export promotion act, 1958 has boomeranged The ostensible

purpose of decimalizing export of sugar was to provide the much

needed incentive to sugar in order to clear surplus stock, thereby help

farmers to realise their due and to let India earn it place in

international export market. Even the government is now concerned

over the situation of no exports despite surplus stock in the country.

Prior to decanal sing of sugar export, sugar export was being handled

by State Trading Corporation (STC) and Indian Sugar &General

Industry Export Imports Corporation Ltd (SIEC). It captured new

markets with the strategic advantages like Sri Lanka, Pakistan,

Indonesia, Russia and so forth and had also managed better

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realizations. In the year of surplus, export of sugar has been helping

sugar factories from incurring unnecessary expenses on storage and

in getting better realization in free market.

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CHAPTER NO.4

4.1 INTERNATIONAL MARKET

World sugar demand

According to the FAO (Food and Agriculture Organization of the

United Nations), total world sugar imports from 1998/99 to 2001/02

were approximately 36 million tons. World raw sugar imports in

2000/01 were 35 million tons, a decrease of 5 percent from 37 million

tons in the previous year. The world's biggest sugar importer is Asia,

with an import volume of 12 million tons in 2000/01 and 11 million

tons in the following year, as a result of high consumption in this

continent. It is estimated that in 2002/03, the import volume of sugar

in Asia will be constant at 11 million tons. The biggest volume of

sugar was imported to Indonesia between 2000/01 and 2001/02,

accounting for 1.5 million tons, and it is predicted that the import

volume will increase slightly to 1.6 million tons in 2002/03.

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Table: Total world sugar demand during 2000-03

Country

Import

(1,000 metric

tons)

Domestic

consumption

(1,000 metric

tons)

Total North America

2000/01 2,672 14,978

2001/02 2,504 14,928

2002/03 N/A 15,014

Total Caribbean

2000/01 306 14202001/02 271 1,424

2002/03 267 1,426

Total Central America

2000/01 0 1,463

2001/02 0 1,525

2002/03 5 1,538

Total Western Europe

2000/01 764 15,454

2001/02 793 15,710

2002/03 674 15,923

Total Eastern Europe

2000/01 2,231 14,981

2001/02 2,233 15,024

2002/03 2,209 15,079

Total Africa2000/01 4,869 9,594

2001/02 5,008 9,746

2002/03 5,208 9,865

Total Middle East

2000/01 6,026 9,293

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2001/02 5,900 9,368

2002/03 6,035 9,633

Total Asia, Ocean

2000/01 11,925 47,610

2001/02 11,043 49,039

2002/03 11,319 49,926

World total

2000/01 37,482 129,699

2001/02 35,319 131,766

2002/03 N/A 133,449

Source: FAO

China is another big sugar importer, with an increasing import volume

every year. The FAO reports that China imported only 543,000 tons

of sugar in 1998/99, but 687,000 tons in 1999/00. And surprisingly,

the import volume jumped to 1.1 million tons in the following year, as

a result of increasing domestic consumption.

Any downward pressure on prices may offer increased incentives for

imports by African, Asian and Middle Eastern nations and increased

shipments to those countries. These regions are important because

imported sugar accounts for a significant portion of their consumption.

Sugar remains a principal source of inexpensive energy and is

attractive when compared to alternative commodities. Import demand

for sugar in African countries, which account for about 14 percent of

world imports, will increase if the price remains low.

A significant development in the world market in supporting

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expanding demand in the short term is the expectation that Russia

will announce an increase in its 2003 sugar import quota from 3.65 to

4 million tons, with the increased quota put to tender in September

2002.

Total world sugar consumption from 1998/99 to 2001/02 was around

128 million tons. And it is estimated that global consumption of sugar

will reach 133 million tons in 2002/03. Domestic sugar consumption in

Asia from 1998/99 to 2001/02 was approximately at 47 million tons.

Moreover, consumption of sugar in this continent is increasing each

year, accounting for 45, 46, 48 and 49 million tons in 1998/99,

1999/00, 2000/01 and 2001/02, respectively. In 2002/03, it is

estimated that sugar consumption will increase to 50 million tons and

grow fastest in the Far East, reaching a forecast growth rate of 3.5

percent in 2003, against a backdrop of annual GDP growth exceeding

5 percent and a population growth rate of around 1.5 percent.

The largest consumer of domestic sugar is India, using 17 and 18

million tons in 2000/01 and 2001/02, respectively. Surprisingly, India

did not import any sugar between 2000/01 and 2002/03 because the

country can produce sufficient sugar by itself.

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CHAPTER NO.5

5.1Causes of decline sugar production

Drought to affect Indias sugar production

Mumbai - A drought-like situation affecting 246 out of the country's

625 districts could sharply impact India's rice and sugar production in

the current fiscal year, Agriculture Minister Sharad Pawar warned on

Wednesday.

A farmer and his bullocks walk to a field against the backdrop of monsoon

clouds in Singur about 50 km (31 miles) northwest of the eastern Indian city

of Kolkata, July 15 2009. A drought-like situation affecting 246 out of thecountry's 625 districts could sharply impact India's rice and sugar

production in the current fiscal year, Agriculture Minister Sharad Pawar

warned on Wednesday. (Reuters Photo)

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"Ten states have declared 246 districts as drought-affected. It comes

to about 46-47 percent of total districts in the country. This year there

is 29 percent less rainfall. This has affected crops in many states,"

Pawar said on the sidelines of a meeting with state food ministers.

The worst affected states were Uttar Pradesh, Madhya Pradesh,

Andhra Pradesh, Bihar, Jharkhand, Karnataka and Maharashtra.

According to Pawar, rice production in the country could decline by

10 million tones this year because of the drought. India produced

nearly 100 million tones of rice during 2008-2009, according to official

figures.

"The shortfall in monsoon may result in shortfall in area coverage of

paddy by about 5.7 million hectares as compared to last year and

production of rice may reduce by 10 million tones. Some shortfall in

production of oilseeds and sugarcane is also expected," Pawar said.

The summer rains are crucial to crops such as rice, soybean,sugarcane and cotton.

"Sugar production in the current sugar season has declined from 26.3

million tones to about 15 million tones as against the domestic

requirement of 22.5-23 million tones which has put pressure on sugar

prices. Sugar production prospects for the next sugar season are also

not bright," he added.

"Due to the expected reduced production of rice, there could be

pressure on availability and market price," the minister said, adding

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that the government might take steps to regulate market price and

launch a crackdown on hoarders.

India is the world's second largest sugar manufacturer after Brazil,

and the news that Indian production would be low this year has

already sent world prices to a 28-year high.

To mitigate the effects of drought, the government, Pawar said, is

ready to release wheat and rice from its reserves in the open market

if prices shot up. The government is also mulling an increase in sugar

supply through ration shops, he added.

Earlier, a senior official with the Meteorological Department said

India's annual monsoon rains were 27 percent below the 50-year

average during the June 1-Aug. 17 period.

However, leading economist and member in charge of food at India's

Planning Commission Abhijit Sen. told a newspaper that he did not

"foresee a situation where we need to import food."

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CHAPTER NO.6

REVIEW OF LITURATURE

6.1Increase in sugar price to cause more expensive

bread

BAKERS are set to increase bread price if the suggested retail price

(SRP) for sugar is not imposed properly.

Retailers in public markets said the price for sugar has been

irregularly increasing and decreasing for the past two months until it

reached almost 45 pesos per kilo.

The group said the suppliers are overpricing the sugar product, which

is why they also have to sell it at a higher amount.

Aside from retailers, the bread industry is affected by the increase,

with bakers forced to increase the cost of bread as well.

Chito Chavez of the Philippine Federation of Bakers Association said:

We will have a costing on our bread and pastry products as well. If

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we dont increase the prices of our product, we wont be able to sell

and that would indicate a drop in our profit.

The Department of Trade and Industry (DTI) pulled out the price

control on basic goods, including sugar that was implemented in the

aftermath of typhoons in the Luzon area.

Trade Undersecretary Zenaida Maglaya said the maximum price for

refined sugar should be P41 as agreed between DTI and the Sugar

Regulatory Administration.

6.2 Rain Halts Cane Crushing in India,

Widening Shortage:

Sugar mills in Maharashtra, Indias biggest producer, halted crushing

for a second time in a week after heavy rainfall overnight disrupted

harvests. Prices in New York and London advanced.

Mills may idle capacity for the next two to three days as heavy

unseasonal falls inundated fields, Prakash Naiknavare, managing

director of the Maharashtra State Cooperative Sugar Factories

Federation Ltd., said in a phone interview.

A delay in supplies from the second-biggest producer may worsen a

global shortage as nations such as Indonesia, Egypt and Pakistan

import sugar. Prices have almost doubled this year in New York

because of weather disruptions to crops in Brazil and India, the

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largest growers.

Sugar will be driven by news such as weather disrupting harvests in

Brazil and India, and cane price-dispute delaying crushing in India,,

an analyst at Standard Chartered Plc in Dubai, said by phone.

Raw-sugar futures for March delivery gained as much as 2.2 percent

to 23.21 cents a pound in after-hours in New York. White sugar for

March delivery rose as much as 1.9 percent to $605.10 a ton in

London, a one-week high. Prices at Mumbai have surged 81 percent

this year.

About 35 mills in Uttar Pradesh, the nations biggest cane- grower,

will begin crushing on Nov. 18 after mills agreed to pay farmers prices

that are higher than the rates set by the federal and state

governments, Shyamlal Gupta, secretary general of Uttar Pradesh

Sugar Mills Association, said in an interview Nov. 14. The tariff

dispute had threatened to halt supplies.

Wet Fields

In Maharashtra, about 60 mills produced 262,000 tons of the sweetener since

crushing began Nov. 1, 19 percent less than the 325,000 tons a year earlier. A

total of 2.68 million tons of cane was processed until yesterday, compared with

3.64 million tons last year, Naiknavare said from Pune.

Mills have run out of cane supplies as trucks and bullock-carts cant

make their way into the wet fields, he said. The rain may help yields

to some extent and theres definitely no loss of production because of

this delay.

Mills in the state idled capacity for three days last week after tropical

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brought heavy rains.

Maharashtra is forecast to produce 4.8 million tons of sugar this crop

year, compared with 4.6 million tons last year. It may harvest 41

million tons of cane, Naiknavare said Nov. 12.

CHAPTER NO.7

EFFECTS ON SUGAR PRICE

7.1 Production shortage causes high price ofsugar:-

Commerce Minister Lt. Col. (Retd) Faruk Khan, MP yesterday saidsugar price would not hike in the next two or three months.

He said the government had already started building buffer stock ofsugar through the TCB with a view to controling its price.

The Minister was addressing a roundtable on 'Sugar Industries inBangladesh: Problems and Potentialities', which was organised bythe daily Vorer Kagoj at Sonargaon Hotel in the city.

Secretary of Industries Ministry Dewan Zakir Hossain, former Vicechancellor of Dhaka University Prof AK Azad Chowdhury, JournalistNaimul Islam Khan, Chairman of Meghna Group Mostafa Kamal,among others, addressed the roundtable.

Organising Secretary of Bangladesh Sugarcane Industries

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Development Forum Shahjahan Ali presented the keynote paper,while Editor of the daily Shyamal Datta moderated the function.

Faruk Khan said the delivery order (DO) business was alsoresponsible for high price of sugar, which should not be allowed.

He also said none who played role behind the price hike would beexonerated from legal actions.

Commerce Minister stressed on enhancing efficiency of sugarrefinery mills, adding that the government was taking initiative toboost up the sugar production.

Shahjahan Ali, in his keynote paper said, now 15 out of 17 public

sugar mills produce sugar which are out-dated. Technologies of themills are almost obsolete.

The mills were profitable during the post-liberation time till 1983-'84.But now they are not profitable.

He said the domestic demand of sugar is 21 lakh 25,000 tonesannually.

"If proper steps are taken, the sugar can be exported," he added.

"Inadequate quantity of sugarcane, low efficiency of factory, highproduction cost, low recovery rate and trade barriers cause reducedproduction of sugar, which results in price hike."

Some speakers said necessary steps should be taken to attractfarmers to sugarcane production and make the production profitable.The sugar industry has huge potentialities, if the problems in thissector could be eased, they added.

They said the government should monitor market prices and supplychain strictly, so that unscrupulous businessmen could not hike sugarprice.

They also suggested to appoint dealers of sugar mills to keep uniformand fixed price all over the country.

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India is the world's largest consumer of sugar. But a weak monsoonand a growing demand have turned the country from being anexporter to a net importer of sugar in the space of one year.

Also, with sugar prices in country soaring to 30-year record high,even middle class families in Jaipur are finding it tough to indulgetheir sweet tooth.

Sugar prices have more than doubled and given the skyrocketingprices, the sweetness of sugar is ironically turning sour for the

common man.

Even making tea for her family is no joy for Veenu Jain, housewife,these days.

With sugar prices shooting up dramatically in recent months, shecan't sip her favourite beverage whenever she wants.

And with winter setting in, Veenu says, sugar prices are turning herlife tougher everyday.

As sugar is so costly, we now have to think many times before wemake tea. Earlier in winters, we used to drink 6-7 rounds of tea dailybut now we can't afford even 2-3 cups a day, she said.

Vennus husband Nirmal Jain, who is a salaried employee said, Weare a vegetarian family so sugar is essential for the growth of ourchildren. But as prices have doubled, we now give them just onespoon of sugar in a glass of milk while earlier we gave them two

spoons or even more.

Like the Jains, most families in Jaipur have now cut down on sugarconsumption.

From Rs 18 rupees last year, every kilo of sugar now costs Rs 40.

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Inevitably, mithai sales have slid by over 50 per cent as most sweetsthat cost Rs 100-150 rupees earlier, now cost well over Rs 200 a kilo.

Naresh Saini, a consumer said, Sweets that cost Rs 100 are nowcosting over Rs 200. Earlier I used to buy sweets for my childrenevery Sunday. But now even though my kids keep asking for sweets,I can't afford to buy them any.

Well, soaring sugar prices have also hit the wedding season inJaipur.

Caterers say that till last year most middle class families served 6 to 8sweet dishes in wedding feasts. But their number has now shrunk to

just 2-3 items.

Clearly, sugar has started tasting bitter for most Indians.

7.2 Production shortage causes highprice of sugar:-

Commerce Minister Lt. Col. (Retd) Faruk Khan, MP yesterday saidsugar price would not hike in the next two or three months.

He said the government had already started building buffer stock ofsugar through the TCB with a view to controling its price.

The Minister was addressing a roundtable on 'Sugar Industries inBangladesh: Problems and Potentialities', which was organised bythe daily Vorer Kagoj at Sonargaon Hotel in the city.

Secretary of Industries Ministry Dewan Zakir Hossain, former Vicechancellor of Dhaka University Prof AK Azad Chowdhury, JournalistNaimul Islam Khan, Chairman of Meghna Group Mostafa Kamal,among others, addressed the roundtable.

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Organising Secretary of Bangladesh Sugarcane IndustriesDevelopment Forum Shahjahan Ali presented the keynote paper,while Editor of the daily Shyamal Datta moderated the function.

Faruk Khan said the delivery order (DO) business was alsoresponsible for high price of sugar, which should not be allowed.

He also said none who played role behind the price hike would beexonerated from legal actions.

Commerce Minister stressed on enhancing efficiency of sugarrefinery mills, adding that the government was taking initiative toboost up the sugar production.

Shahjahan Ali, in his keynote paper said, now 15 out of 17 publicsugar mills produce sugar which is out-dated. Technologies of themills are almost obsolete.

The mills were profitable during the post-liberation time till 1983-'84.But now they are not profitable.

He said the domestic demand of sugar is 21 lakh 25,000 tones

annually.

"If proper steps are taken, the sugar can be exported," he added.

"Inadequate quantity of sugarcane, low efficiency of factory, highproduction cost, low recovery rate and trade barriers cause reducedproduction of sugar, which results in price hike."

Some speakers said necessary steps should be taken to attractfarmers to sugarcane production and make the production profitable.

The sugar industry has huge potentialities, if the problems in thissector could be eased, they added.

They said the government should monitor market prices and supplychain strictly, so that unscrupulous businessmen could not hike sugarprice.

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They also suggested appointing dealers of sugar mills to keepuniform and fixed price all over the country.

India is the world's largest consumer of sugar. But a weak monsoonand a growing demand have turned the country from being anexporter to a net importer of sugar in the space of one year.

Also, with sugar prices in country soaring to 30-year record high,even middle class families in Jaipur are finding it tough to indulgetheir sweet tooth.

Sugar prices have more than doubled and given the skyrocketingprices, the sweetness of sugar is ironically turning sour for thecommon man.

Even making tea for her family is no joy for Veenu Jain, housewife,these days.

With sugar prices shooting up dramatically in recent months, shecan't sip her favourite beverage whenever she wants.

And with winter setting in, Veenu says, sugar prices are turning herlife tougher everyday.

As sugar is so costly, we now have to think many times before wemake tea. Earlier in winters, we used to drink 6-7 rounds of tea dailybut now we can't afford even 2-3 cups a day, she said.

Vennus husband Nirmal Jain, who is a salaried employee said, Weare a vegetarian family so sugar is essential for the growth of our

children. But as prices have doubled, we now give them just onespoon of sugar in a glass of milk while earlier we gave them twospoons or even more.

Like the Jains, most families in Jaipur have now cut down on sugarconsumption.

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From Rs 18 rupees last year, every kilo of sugar now costs Rs 40.Inevitably, mithai sales have slid by over 50 per cent as most sweetsthat cost Rs 100-150 rupees earlier, now cost well over Rs 200 a kilo.

Naresh Saini, a consumer said, Sweets that cost Rs 100 are nowcosting over Rs 200. Earlier I used to buy sweets for my childrenevery Sunday. But now even though my kids keep asking for sweets,I can't afford to buy them any.

Well, soaring sugar prices have also hit the wedding season inJaipur.

Caterers say that till last year most middle class families served 6 to 8sweet dishes in wedding feasts. But their number has now shrunk to

just 2-3 items.

Clearly, sugar has started tasting bitter for most Indians.

7.3 India sugar prices fall as imports likely torise

Indian buyers are poised to sign deals for imports of up to 2 milliontonnes of raw sugar as the fall in global prices and the rise in Indianrates have made purchases viable after nearly two months, tradeofficials said.

Indian spot sugar prices have risen 17 percent in the last threeweeks.

In Kolhapur, a key market in top sugar producer Maharashtra, theprice of the most traded S-variety sugar fell 1.14 percent to 3,032rupees ($64.55) per 100 kg.

"There will be more sugar in the market...but I think with highergovernment support prices, there will not be a major fall in prices,"said a trader in Kolhapur.

India has fixed new state-set prices for cane aiming for stable sugarsupplies after the worst monsoon in decades raised fears ofshortages.

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Home Minister Palaniappan Chidambaram said the government hadapproved a new "fair and remunerative" price of 129.84 rupees per100 kg of cane.

This week, the government announced a new system of fixing a "fair

and remunerative" price which would be applicable throughout thecountry.

The new price is higher than the federally advised price of 107.76rupees, but lower than the the price of 170 rupees fixed by the UttarPradesh state, India's top cane grower.

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CHAPTER NO.8

CONCLUSION:

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CHAPTER NO.9

BIBLIOGRAPHY

NEWSPAPER

TIMES OF INDIA

MUMBAI MIRROR

INTERNET:

www.google.com

www.wikipadia.com

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Project EcoA PROJECT ON DECLINE IN SUGAR PRODUCTION ITS IMPACT ON ECONOMY