Despite Record Production, India's Sugar Mills Shutting Down. Here's Why
Indian sugar mills are facing a financial crisis despite record production levels due to rising input costs and stagnant sugar prices. Industry experts point to geographic disadvantages and payment timing mismatches as primary drivers of the closures.
Why it matters
The struggle of the sugar industry impacts the livelihoods of millions of farmers and the stability of India's agricultural economy.
India makes more sugar than almost any country on earth. So why are its mills going quiet?That's the question troubling India's sugar belt right now. Production numbers look strong. Export numbers, in good years, look stronger. And yet, mill after mill is buckling under financial pressure. Some have stopped crushing altogether. Others have changed hands."This isn't a production problem. It's an economics problem," says Alok Saxena, Executive Director of Zuari Industries Limited.The Numbers Don't Add Up AnymoreSaxena breaks it down simply. Sugarcane alone eats up nearly 70 per cent of what it costs to produce sugar. Labour costs are up. Maintenance costs are up. Financing costs are up. Compliance costs are up.Sugar prices, meanwhile, have barely moved. "When your biggest input keeps getting more expensive and your output price stays flat, something has to give," Saxena explained. "Margins vanish first.
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