TRADE AND DOMESTIC MARKET: AN ECONOMETRIC ANALYSIS OF SUGAR IN INDIA
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Date
2021
Authors
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Publisher
Dr.RPCAU, Pusa
Abstract
Sugar is an essential commodity derived largely from sugarcane which is an agricultural produce. It is the most preferred source of energy required for proper functioning of human brain and body. It acts as a sweetener in food and beverages. Apart from these, it has many non-food and beverages. Apart from these, it has many non-food applications. Because of these properties, there is a great demand for sugar in domestic and international markets. Looking at its importance, the present study was conducted with the main objective of estimating the growth and instability in production of sugarcane and examining the performance of Indian sugar trade over time.
The study is based on both primary data and secondary data. Primary data were collected from randomly selected sugar exporters located all over India by conducting telephonic interviews. Secondary data were collected from various published and unpublished sources. The time-series data so collected pertained to a 30- year period spanning from 1989-90 to 2018-19. The entire period under consideration was further divided into three sub-periods- period I (1989-90 to 1998-99), period II (1999-2000 to 2008-09) and period III (2009-10 to 2018-19) for detailed analysis. Various statistical and econometric methods and tools and techniques like CAGR, CV and CII, Index number, Trend analysis, EPR, NPC, Markov Chain
Analysis, Cobb Douglas Function, HHI, TEI, CEI, Rank Based Quotient and Garrett’s Ranking Technique were used to arrive at a meaningful conclusion.
The area under sugarcane, its production and productivity increased at the rate of 1.20 per cent, 1.54 per cent and 0.34 per cent per annum, respectively in the period under study. Production of sugar increased at the rate of 3.15 per cent per annum whereas, consumption of sugar increased at 3.63 per cent per annum in the entire period. The export of sugar had positive growth of 11.13 per cent per annum. The value of exported sugar witnessed a growth of 12.72 per cent per annum while, there was 1.43 per cent annual growth in unit price of exported sugar. On the other hand quantum of imported sugar recorded a positive growth of 25.86 per cent per annum, value of imported sugar grew at the rate of 28.68 per cent per annum while unit price of imported sugar recorded a positive growth of 2.08 per cent per annum. The growth in area, production and productivity of sugarcane along with production and consumption of sugar in India was found to be relatively stable. The growth in trade of sugar showed high instability. The Indian sugar faced comparative disadvantage and non- competitiveness in the international market. Myanmar was the only loyal market for Indian sugar among the six major Indian sugar importing countries. Among all the factors undertaken, only exchange rate had a significantly negative influence on the sugar export from India. Myanmar had the lowest share of market in the initial years of study which increased gradually and became the highest shareholder of Indian sugar market at the end of study period. The Indian sugar was highly concentrated in a handful of countries. The major problems identified by the Indian sugar exporters were marketing problems, infrastructural problems, Governmental interventions, packaging problems, financial problems and time management.
The main conclusion that can be drawn from this study is that steps have to be taken for quality improvement of Indian sugar which includes setting up of storage and grading facilities for sugar. This will help Indian sugar to penetrate new overseas markets leading to higher returns to the exporters and to the country at large.