i. India has the largest area under sugar cane cultivation in the world. The yield per hectare is extremely low (about 70 tons), when compared to Java, Hawaii, Peru, Rhodesia (more than 150 tons per hectare). Even within the country, the yield is higher in South India than in North India.
ii. In India about one-third of the sugar cane production is utilised for making gur and khandsari. This causes shortage of raw material for the sugar mills.
iii. The sugar industry has a seasonal character and the crushing season normally varies between 4 and 7 months in a year. Thus, the mill and the workers remain idle for almost half of the year. This creates financial problems.
iv. The average rate of sugar recovery from the sugar cane is less than 10 per cent. This recovery rate is low, when compared to other sugar producing areas like Java, Hawaii and Australia, upto 14 per cent.
v. Most of the sugar mills in our country are of small size with a crushing capacity of about 1200 tons per day. Thus, most of them are not viable.
vi. Most of the sugar mills in Uttar Pradesh and Bihar are more than 50 years old. These mills are working with old and outdated machinery. Thus, low production reduces the amount of profit and finally makes the unit sick.
vii. The cost of sugar production in India is one of the highest in the world. This is due to high sugar cane cost, uneconomic production process, inefficient technology and high taxes exercised by the state and the central governments.
viii. The main by-products of the sugar industry are bagasse and molasses. The industry faces problems in disposing these by-products, especially under pollution control devices.
ix. The government policy, based on dual price system, discourages the entrepreneurs to make investment for further growth and improvement.
The profit margin should be increased for future developments.
x. The per capita annual consumption of sugar is about 10 kg in India, whereas it is about 20 kg in the world.