Sugar's bitter harvest: How FRP and SAP raise the cost of production

Fifty million sugarcane farmers, 5,00,000 mill workers and many others involved in ancillary activities are affected by Sugar industry’s ever-fluctuating fortunes.

The story remains the same, as Chart 1 bears out. With each bumper harvest, the stock of sugar grows far in excess of domestic consumption. This is what has happened over the last sugar season (2016-17) and the current one (2017-18); the situation is expected to worsen in the next (2018-19).

With international prices also plummeting, as shown by Chart 2, thus ruling out exports as a remedy, the sharp fall in domestic market prices, as shown in Chart 3, meant that farmers ended up facing an all-time high of Rs 220 billion in unpaid arrears from the millers. The government has introduced a buffer stock of 3 million tonnes but even then, next season’s opening stock is likely to be almost double of this year’s.

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines; Compiled by BS Research Bureau.