Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
An Exploratory Study to Understand Sugar Price
Fluctuations in Bihar, India
Shiwangi Singh*
Sugar prices are fluctuating in India. Bihar state’s in India situation is no different from
rest of other states. Bihar has 29 sugar mills and large area under sugarcane
cultivation. In spite of this, sugar prices in Bihar are always varying. An attempt is
made here to find out the factors affecting sugar price movements. And the
relationship between these factors impacting on sugar prices oscillation was covered.
It was first exploratory study covered to the sugar price variations in Bihar. The study
found that some critical factors are influencing sugar price fluctuations in Bihar. In
addition to general factors like Sugar demand and supply, climatic influences, the role
of unorganized trade sector was found to be a major driver of sugar price up and
down movement in Bihar.
Keywords: Bihar, Price Fluctuations, Sugar Trade, Wholesalers
Introduction
In 2014-15 India is the world’s second largest producer of Sugar (Times of India,
May 2015). Sugar be it a few teaspoon is an integral part of diet of every Indian
household. But the sugar prices are fluctuating every day. In Industry it has been
noticed that there is no predictable pattern till present. Even in a single day sugar
prices keep fluctuating like stock market. Sugar Price depends upon many factors
like recovery percentage, sugarcane pricing, monsoon, drought etc. Day to day
sugar price variations is not exactly proportional Sugar Demand and Supply. There
are other factors, too, which affect the sugar price fluctuations which are regional
influencing factors which are unknown. Also Bihar has 5% of total mills in India. But
its production is just 1.915% of India’s production. So, it has no influence in the Price
fluctuations or price determination.
This study involved the survey of the wholesalers, distributors and retailers. It also
involved visiting Railway’s Rake Point Fatuha Jn., Bihar.
So far, no study has been conducted with a focus on Bihar, India. So, this research
is an exploratory study. Here we are trying to understand more about sugar price
fluctuations in Bihar. In the next section we are going to discuss the scenario of
Bihar and India.
BIHAR
By analyzing the sugar production trend, as given below in the graph we can say
that sugar production does not have a particular increasing trend. However Sugar
Production has an increasing trend from year 2009-10 onwards. From 2006-07 to
2012-13, we can see that the increase in Sugar production is 12.7%.
* Shiwangi Singh, PGDM, Chandragupt Institute of Management Patna, Bihar, India
shiwangi14@cimp.ac.in; shiwangisingh.1992@gmaail.com
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
Sugar Production in Lakh tonnes in Bihar
6
5
4
3
2
1
0
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
Figure I: Sugar Production in Lakh tonnes in Bihar
(Source: Ganna Udhyog Vibhag Sugar Production, 2015)
Area Sugarcane cultivation('000 hectares) in
Bihar
300
250
200
150
100
50
0
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
Figure II: Area Sugarcane cultivation('000 hectares) in Bihar
(Source: Sugar India, 2014)
As we can see in the Figure II, area under Cultivation has increased by 66.67% from
2006-07 to 2012-13.
Comparing area under cultivation and sugar production, we can say that one of the
factors influencing Sugar production is area under which the sugarcane is cultivated.
In general, sugarcane cultivation area is directly proportional to production of
sugarcane (Quantity), thus influencing sugar production.
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
Bihar is among the fifteen top sugar producing states in India. But the Sugarcane
cultivation area is not fixed. So, it may impact sugar production and increasing sugar
price fluctuations.
INDIA
In India the production of sugar was 275.50 lakh tonnes in the year 2014-15 (Times
of India, May 2015). The sugar producing states can be categorized into three
groups i.e. High, Medium, and low based upon recovery percentage of sugar from
sugarcane, area under cultivation and actual sugar production.
Category
Sugar Producing States
Approximate
Production of India
High
Uttar Pradesh And Maharashtra
20% and above
Medium
Gujarat, Andhra Pradesh, Karnataka, Tamil 5-19%
Nadu
Low
Jammu Kashmir, Himachal Pradesh, Punjab, 0-4%
Haryana, Uttaranchal, Rajasthan, MP, Bihar,
WB, Orissa, Jharkhand, Arunachal Pradesh,
Assam, Nagaland, Meghalaya, Tripura and
Mizoram
Table I: Sugar Producing States
(Source:http://www.vsisugar.com/india/statistics/world_indiasugar.htm)
Based on a survey of Retailers, selling price of Sugar in Bihar is Rs. 3200 per
Quintal. The rate for different quality of sugar keeps varying at the distributors,
wholesalers and retailers point. But the price which consumer pays for the sugar is
fixed.
Bihar’s sugar price and Maharashtra’s sugar price for end consumer in same type of
sugar cannot be the same because of difference in basic price per quintal of sugar,
margin of intermediaries, weather conditions, and recovery percentage of sugar from
sugarcane. In Maharashtra recovery percentage of sugar from sugarcane is around
11% whereas in case of Bihar it is around 9%.
Literature Review
In This section we are trying to study the Global and Indian scenario of Sugar and its
price movements.
Global Scenario
According to “World Sugar Price Volatility Intensified by Market and Policy Factors,”
by McConnell, Dohlman, and Haley, the factors affecting sugar prices are dependent
generally upon demand and supply. However, Evaluation of economic and policy
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
factors driving production and trade in global sugar markets supports, underlying
dynamics related to Brazil's exchange rates and ethanol's roles in energy markets
putting upward pressure on global prices of Sugar. Further, the volatility of price
movements during the last year was mostly the result of supply shortfalls linked to
changing economic incentives, policy factors and weather disruptions in countries.
Brazil also has the world's largest land base committed to sugarcane, which
contributed to its rapid growth as the dominant exporter. Over the past 20 years,
Brazil more than doubled cane production area, from nearly 3.6 million hectares to
almost 8.5 million hectares, 2013 and a continuous increasing trend has been is
observed each year. China, Pakistan, and India together account for over 25 percent
of global sugar consumption, a share that has been growing since 2005. These
countries also account for 20 to 30 percent of global sugar production, depending on
the year, but are subject to volatile production cycles.
From the survey of literature, factors influencing sugar price worldwide are supply of
sugar, policy factors, weather disruptions, Brazil’s exchange rate, area under
production etc.
Rising incomes and lower sugar prices are making sugar more affordable,
particularly in Asia where per person consumption of sugar is remaining low relative
to the world average. Sugar consumption is also forecasted to grow strongly in North
Africa and the Middle East as a result of rising incomes and population growth.
Consumption in China will increase in response to rising incomes and lower sugar
prices, as well as substitution of sugar for starch sweeteners by food and beverage
manufacturers. Consumption of starch sweeteners has been relatively high in China,
but they have become more expensive as China’s domestic ethanol programs have
resulted in increases in the price of corn, the main ingredient in their manufacture.
Sugar consumption in the Russian Federation has been declining since 2002-03.
Lack of population growth and higher domestic prices caused by import tariffs are
likely to be key contributors to the declining consumption.
As Brazil is an efficient low cost producer of sugar, and all of their sugar is produced
from cane, falling prices are expected to have a limited effect on sugar production. In
addition, demand for ethanol generated by the large flex-fuel vehicle fleet, the
compulsory blending of ethanol in petrol, and growing export demand for fuel
alcohol, provides cane producers with some security against lower sugar prices.
Although there appears to be plenty of scope to convert more land into sugar cane
growing in Brazil, production costs may rise as additional infrastructure is required
and transport costs rise as more land further from the main processing centres is
brought into production (Wood, A. & Sheales, T., 2011-12)
Indian Scenario
In India (Bihar), factors affecting sugar prices fluctuations are explained by area
under production of sugarcane, supply shortfall of sugar and weather disruptions.
Sugar Consumption in different countries No such similar study had been conducted
in case of Bihar, India.
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
As literature indicates other regional factors influencing prices are:
Supply of Sugar
Sugar Recovery percentage from sugarcane
Climatic influences
Emerging Issues in Sugar Prices Fluctuations
The agricultural commodity markets have experienced extreme price fluctuations
more frequently. The main reasons for this was changes in fundamental supply and
demand factors.
According to Ministry of Food and Agriculture of India, reasons for Agricultural Price
Fluctuations are: the population growth rate, and changed dietary habits, resulting
increases in the consumption of feed grain and food.
Factors affecting sugar prices are almost common across the country, except supply
short fall in low producing states. Around 17 states in India are in category of low
sugar producing states. These states are not self-sufficient to cater to the
consumption needs of the people. So, sugar in these states are being procured from
outside states. Thus, more demand and less supply of sugar increases the price.
In addition to demand and supply factors there are other factors which have
contributed to the price increases of agricultural commodities. For example: It has
been argued that financial speculation in securities and derivatives linked to
commodities (including agricultural commodities) markets has helped push prices
higher (John, David and Joseph).
Methodology
The types of data used in this project are primary data and secondary data.
Primary data sources have been collected from Wholesalers and distributors.
Questionnaire was used to collect data from wholesalers. Questions were related to
price, quality, quantity of Sugar types, margin of trade, monthly order, preferred
place of buying Sugar, cost of transportation, ordering time period etc. Interview was
conducted for sugar distributor. Main points of interview were sugar demand in
Bihar, railways discount for bringing rake, preferred sugar type for brining sugar,
problems faced during whole process.
Wholesalers were surveyed using Formal questionnaire followed by discussion and
interview with distributor of Bihar. 12 wholesalers out of around 20 were visited in
different locations of Patna.
Secondary data was collected from the following sources:
 Hindustan Biofuels Limited Price of sugar in Sugauli and Lauria for
Sugar Price Correlation
 NCDEX website (Sugar Prices of Kolhapur, Erode, Vaishi) for Price
correlation
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
 Ganna Udhog Vibhag, Bihar – Bihar’s Mills Sugar Production data of
past 9 years and Cane Crushing Capacity per day and actual cane
crushed per day
 Sugar India 2014 – Sugar Production of other states of past 9 year
Secondary Research studies have been done from various journals like Food Price
Fluctuations, Policies and Rural Development in Europe and Central Asia, World
Sugar Price Volatility Intensified by Market and Policy Factors etc.
Techniques of Data Analysis: Various techniques like SPSS Correlation Analysis,
Standard deviation, percentage have been used in this study.
Correlation analysis has been used to predict the relationship between prices of
Bihar, Maharashtra and Tamil Nadu. This analysis was done to predict the variation
in sugar prices of Bihar, if we have the sugar prices of Maharashtra and Tamil Nadu.
An Overview of Sugar Trading
Here we are trying to study the general trade pattern and system of sugar trade in
Bihar.
There are 578 sugar mills in India out of which 29 are located in Bihar. In Bihar out
of these 29 mills, only 11 mills are functional.
Location and production chart of 11 Functional Mills:
Mill Location
Bagha
Production (Lakh ton)
.755
Hari Nagar
1.152
Narkatiyaganj
.765
Majhaulia
.477
Sasamusa
.155
Gopal ganj
.369
Sighwalia
.478
Riga
.420
Hasanpur
.311
Lauria
.2
Sugauli
.185
Total
5.267
Table Number II (Source: Ganna Udhyog Vibhag Sugar Production, 2015)
Sugar demand in Bihar is estimated to be 20 lakh metric tons. However mere 5.267
Lakh metric ton is produced in Bihar. In order to meet the deficit demand the
remaining amount of sugar is bought from the states of Maharashtra, Karnataka,
Uttar Pradesh, Andhra Pradesh and other states. Around 74% of sugar is being
procured from outside to meet the domestic demand of the states.
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
In Bihar, around 7.3% of the total production in Bihar is sold through NCDEX
(NCDEX E MARKET LIMITED), while the remaining production is sold via
unorganized channel which does not involve exchange.
There are two types of sugar consumption, institutional consumption and mass
consumption. 65% constitutes Institutional consumption which includes use of sugar
in making sweets, biscuits, cold drinks and confectionaries whereas 35% includes
consumption by mass population. In this study we are focusing upon mass
consumption.
A Study done on Sugar Trading in Bihar, (respondents: wholesalers) stated M is the
sugar quality which is mostly demanded in Bihar, because of people’s preference
towards large grain size of the sugar. L is not sold despite having largest grain size
due to increase of price. So, we can say that people prefer bigger grain size and
also see price at the same time. The sample also told that quality difference exists
between sugar of other states and Bihar (Sugar Mills in Bihar). Sugar of
Maharashtra are more white in color and grain size is also bigger.
Supply Chain of Sugar: The sugar supply chain depends upon the channel of sugar
procured i.e. organized channel which involves exchange into it and other channel is
unorganized channel which directly involves distributors.
UNORGANISED
Producer
Distributor
Wholesaler
Retailer
Final Consumer
Proceedings of 12th Asian Business Research Conference
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ISBN: 978-1-922069-85-6
ORGANISED
Producer
Exchange
Distributor and/or
Wholesaler
Retailer
Final Consumer
Generally, the channel involves three or four parties between producer and final
consumer.
Producer: Responsible for getting raw materials and converting sugarcane into
sugar and other byproducts.
Exchange: Responsible for facilitating trade between Producer and Distributors. It is
wholly responsible for all the sales of the mills.
Distributors: Where exchange is not present then the Distributors directly take
Sugars from millers. Producers may have contact with many distributors for sale.
Wholesalers: Buys in bulk from the distributors / sometimes directly with exchange
and breaks into small quantities to retailers. In case of organized channel the
wholesalers are directly buy sugar with the help of exchange.
Retailers: They sell goods to end consumers. They also provide information which
goes to the producer about which sugar quality people are liking and why.
Consumers: One who buys/consumes sugar.
When transportation cost for Sugar was analyzed from different places to Patna, it
was found that, the cost from Fatuha (Rake Point) to Patna is lowest which is
economical compared to other locations.
Patna, Purbi Champaran, Muzaffarpur, Madhubani and Gaya are the top five
districts in Bihar in Sugar consumption. Optimal locations for sugar transfer coming
from rake based on distance from Fatuha and consumption are Patna, Gaya,
Nawada, Munger, Jamui, Nalanda, Saran, Jehanabad (EXHIBIT IV).
On a date, random chosen, the wholesale price of Sugar, S 31 is lower in case of
sugar which is procured from Maharashtra than produced in Bihar (Table III).
Proceedings of 12th Asian Business Research Conference
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ISBN: 978-1-922069-85-6
Maharashtra
Rs.)
2215
Basic price difference
Logistics
difference
wholesaler
till
(In Patna, Bihar (In
Rs.)
Difference
2655
440
335
70
-265
25
15
-10
0
-40
Total difference in Logistics, Overhead expense and
Profit margin difference
125
Overhead Expense Diff
profit margin of Distributor
40
difference
Table III: Price Differences in Sugar of Maharashtra and Bihar, S31
Data Analysis
Analyzing sugar production of states Fig. 3 of different states like Maharashtra (High
Sugar Producing state), Tamil Nadu (Middle Sugar Producing state) and Bihar (Low
Sugar Producing state) we can say that the sugar production fluctuation trend is the
same.
160
140
120
100
80
60
40
20
0
Tamil Nadu
Maharashtra
Bihar
Figure III: Sugar Production of three states (Source: Sugar India, 2014)
Sugarcane production data analysis: Four year data, 2010-11 to 2013-14 has been
taken into consideration for doing analysis.
In Bihar, sugarcane is cultivated in almost all districts. In this analysis it has been
tried to know the sugarcane production in different districts and their contribution in
total production of Bihar, mill’s sugarcane crushing capacity in respective district,
categorization of districts based upon production of sugarcane etc.
Top four districts of sugarcane production are Sitamarhi, East Champaran,
Gopalgunj, and West champaran. These four districts comprises of on an average
78% of total sugarcane production in Bihar. West champaran alone contributes to
51% of the total sugarcane production.
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
Top four districts in area under production of sugarcane are Sitamarhi, East
Champaran, Gopalgunj, and West champaran. These four states have on an
average 76.5% of total sugarcane production area in Bihar. West champaran alone
have 51% of the total sugarcane production area.
Categorization of Districts based upon production of sugarcane. The districts have
categorized on the basis of percentage contribution to total production in Bihar.
(Based upon Sugarcane production data of 2013-14)
Districts
Percentage contribution
Sitamarhi,
East
Champaran, 5% and above
Gopalgunj, and West champaran
Banka, Madhepura, Begusarai, Between 1 to 4.99%
Samastipur, Siwan, Madhubani,
Bhagalpur, Muzaffarpur
Supaul,
Arwal,
Lakhisarai, Less than 1%
Jehanabad,
Kaimur,
Katihar,
Aurangabad Munger, Nawada,
Nalanda, Khagaria, Araria, Rohtas,
Kisangunj, Buxer, Sheikhpura,
Bhojpur, Patna, Gaya, Saharsa,
Purnia, Vaishali, Jamui, Saran,
Darbhanga, Sivhar
Total
Contribution
80%
15%
5%
Table IV: Categorization of Districts based upon production of sugarcane
Basically there are few factors which affect sugar prices and few indicators to show
how sugar prices are fluctuating in Bihar.
Firstly we are going to deal with indicators to show sugar price fluctuations:
Indicator:
Do the relationship exist between sugar prices of Bihar and other states? To
know this a correlation analysis was done between sugar prices of Bihar,
Maharashtra and Tamil Nadu. It was found that highest correlation in prices
exists between Vaishi (Maharashtra), Kolhapur (Maharashtra), Erode (Tamil
Nadu) and Sugauli and Lauria (Bihar). It gives the result that around 85%
variation in prices (EXHIBIT II & III – Correlation Analysis) of Bihar is
explained by price variation of other states and 15% variation is regionally
influenced. This 15% price variation accounts for price variation from the
distributor side, local social influences etc.
Standard deviation in prices of Sugar of Kolhapur (Maharashtra), Erode
(Tamil Nadu) and Vaishi (Maharashtra) are Rs. 215.801, 208.187 and 215.53
respectively. In case of Bihar standard deviation is found to be Rs. 218.5. So,
there is larger deviation and fluctuation in sugar prices of Bihar as compared
to other states.
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
Factors affecting sugar price fluctuation:
 The Sugarcane production is also not adequate to utilize maximum
capacity of plants. Only 10% of the capacity is utilized (EXHIBIT I). Not
utilizing even 10% of their production capacity lead to increase in their
expenses. Obsolete equipment’s and inadequate skills are the two
factors resulting into closure of sugar mills in Bihar.
Capacity Utilization of sugar mills just 10%. In 10% of capacity
utilization 5.267 lakh tonnes of sugar is produced.
As, Bihar’s expected sugar consumption is 20 Lakh tonnes. The unmet
demand i.e. 14.733 Lakh tonnes are catered to by procuring sugar
from other states. So, for producing the sugar demanded capacity
utilization must be around 38%.
Total Expected demand of Bihar
Total Production inside Bihar
Total procurement from outside
states
Present capacity utilization (a)
If 100% capacity is utilized then
Sugar production
To produce the sugar procured from
outside capacity utilization (b)
To produce the estimated demand
capacity utilization (a)+(b)
Sugar Quantity
in Lakh tonnes
or percentage
20
5.267
14.733
10%
52.67
27.97%
37.97%
If the total installed capacity (i.e. 100% capacity) is utilized, then the
total sugar production will be 52.67 lakh tonnes. Excess of 32.67 lakh
tons can be sent to other states or exported. This could also lead to
surplus cash inflows for Bihar and price variations could be minimized
by the supply factor.

Sugar price is also affected by its transportation cost which in turn
depends upon medium of transportation and distance travelled. Hence for
longer distance railways is used and for shorter distance truck is used.
Railway department also provides discount to the parties in case if the
single party is bringing rake from the single origin for at least 3 years, they
can get a discount of 15-19% of the total railway freight, trigerring some
distributors are making profit on railways discount and selling it at original
cost. Thus it is influencing sugar price fluctuations.
Sugar is brought from distant states through Rake (Indian Railway’s
Freight Train) and from nearby states by Truck as a means of
Transportation.
Proceedings of 12th Asian Business Research Conference
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Major States from which sugar are procured in Bihar:
Distance
to
Patna,
Bihar Medium
of
(Approximately)
Transportation
Maharashtra (Kholapur) 1800 km
Railways
States
Uttar
Pradesh 277 km
(Gorakhpur)
Tamil Nadu (Erode)
2700 km
Truck
Karnataka
(Jamsakhandi)
Railways
1450 Km
Railways
The sugar prices are also affected and are fluctuated by penalty charged
by railways to the respective distributors.
The purpose of the visit was to know the Railway’s policy regarding loss,
theft, penalty, damage and discounts, if any, given to the distributors who
bring goods from other states through Rake. It was found that Penalty is
levied to the Party for:
A. Damage Charges
For exceeding the limit of unloading time
Maximum unloading time given by the railways is 09 hours. If the goods are
not unloaded within the specified time limit then penalty charge is Rs. 150 per
Hr. per wagon i.e. 6300Rs per Hr. This penalty is called Damage Charge.
B. Wharfage charge
Wharfage charge is levied on goods/consignment not removed from railway
premises after the specified time or time limit.
Time limit given to a party for fetching and removing goods from station is
12hours. If concerned party has unloaded the goods and kept it on the
Platform for more than 12 hours, then the penalty is charged to them. The
penalty is Rs. 150 per hour per wagon.
If the time exceeds more than 24hr then the wharfage charge is doubled.
Railway department does not handover entire consignment until and unless
whole penalty is paid. 1-2 wagon’s with consignment is generally seized by
the Railways for the same.
Application for Apology asking for some concession in penalty:
The apology letter is addressed to anyone of the following based on the sum
or amount of penalty.
Up to 2 Lakh – Senior Divisional Commercial Manager
2- 5 Lakh – Divisional Railway Manager
5 Lakh above – Chief Commercial Manager
After grant of penalty the party goes to the office with the receipt and the
amount is transferred to his account.
Proceedings of 12th Asian Business Research Conference
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ISBN: 978-1-922069-85-6
What if party reports the seal is broken?
When the party reports to the CGS that the seal is broken then unloading
process stops. Memo is prepared which includes wagon number and the
application for broken seal. Then physical counting of sacks is done in the
presence of CGS, Railway Protection Force (RPF) and the concerned Party.
If the sacks counting is lesser than what is expected to be then a Short
Certificate is issued by divisional office.
Government decides the value of the loss and the amount is credited to the
party’s account.
Entire process takes 3 months approximately.
Railway department also provides discount to the parties in case - if the same
party is bringing rake from the same origin for at least 3 years. The discount
given to the respective parties is between 15-19% of the total railway freight.

Recovery percentage of sugar from sugarcane is around 9% for Bihar and
11% for Maharashtra. This also increases the price of sugar produced which
in turn affects the variation in prices; as sugar from other states will be
available at a lower price (Commission for agricultural, cost and prices).

As the Bihar’s sugar market is dominated by unorganized trading. Few
middlemen are making money out of it. They usually buy sugar at lower rate
from millers and then sell when the sugar rate is higher. This involves major
price fluctuation in regional influence.
Conclusion
The key factors influencing sugar price fluctuations are explained by 85% national
factors and 15% regional factors. National Factors include: sugarcane production,
Demand and Supply of sugar, sugarcane pricing etc. Regional factors include
distributor’s role, transportation cost, penalty to parties at Railway Rake points,
recovery percentage of sugar from sugarcane.
This Research was done for Bihar State. This paper would be valued by sugarcane
Industries, exchange, policy makers and Government.
Key recommendation for the Industries, Exchange, Policy makers and Government
are given as below:
If the entire capacity is utilized, then sugar production will be 52.67 lakh
tonnes i.e. 19% of India’s total sugar production. Then sugar prices will not be
so highly fluctuating.
Government of Bihar should promote cultivation of sugarcane. So, that
installed capacity of the mills could be utilized properly.
As for other States we have price listing of different type of sugar produced in
website like NCDEX. So, for Bihar similar pricing for every day should be
done.
Proceedings of 12th Asian Business Research Conference
8 - 9 October 2015, Novotel Hotel Bangkok on Siam Square, Bangkok, Thailand
ISBN: 978-1-922069-85-6
Trading through Exchange has a benefit of price transparency. So, Exchange
should take an initiative to promote people to trade online (SPOT & FUTURE
TRADE). This will reduce price variations to a great extent.
Exhibits
EXHIBIT I
Mill’s Cane Crushing Capacity and Cane Crushed per Day (Year 2014-15
Mill Location
Bagha
Hari Nagar
Narkatiyaganj
Majhaulia
Sasamusa
Gopal ganj
Sighwalia
Riga
Hasanpur
Lauria
Sugauli
Total
Cane
crushing
Capacity Cane Crushed
(Tons cane per day)
5000
79.86
10000
125.67
7500
82.08
5000
48.47
2500
18.44
5000
38.81
5000
51.56
5000
47.95
3000
34.55
3500
25.10
3500
21.96
57500
574.45
EXHIBIT II
Correlation between Sugauli (Bihar) and Kholapur(Maharashtra) /Erode (Tamil
Nadu) /Vaishi (Maharashtra)
Sugauli_Bihar
Pearson
Correlation
Kholapur
(Maharashtra)
Erode
(Tamil
Nadu)
Vaishi (Maharashtra)
.851**
.843**
.853**
**. Correlation is significant at the 0.01 level (2-tailed).
b. Listwise N=138
Proceedings of 12th Asian Business Research Conference
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ISBN: 978-1-922069-85-6
EXHIBIT III
Correlation between Lauria (Bihar) and Kholapur(Maharashtra) /Erode (Tamil Nadu)
/Vaishi (Maharashtra)
Lauria_Bihar
Pearson
Correlation
Kholapur
(Maharashtra)
Erode
Vaishi
(Tamil Nadu) (Maharashtra)
.878**
.882**
.886**
**. Correlation is significant at the 0.01 level (2-tailed).
b. Listwise N=178
EXHIBIT IV
Optimal location for Sugar Transfer, coming from rake from other States.
From Fatuha to
Distance
Demand
Patna
30.6km
5.61%
Gaya
93km
4.22%
Nawada
84.8km
2.13%
Jamui
141km
1.69%
From Fatuha to
Distance
Demand
Munger
151km
1.31%
Nalanda
69.6km
2.76%
Saran
78.7km
3.80%
Jehanabad
63km
1.08%
Endnotes
* Acknowledgement
I would like to acknowledge Dr. V. Mukunda Das, Director CIMP, for his exemplary
guidance, valuable feedback and constant encouragement throughout writing the
research paper. His valuable suggestions were of immense help throughout this
work.
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