Medium Term Outlook for Indian Agriculture:Sugar SectorRoshan TamakBusiness Head (Sugar),Olam Agro India Ltd

Global Sugar IndustryBrazil and India are the highest sugar producing nations in the world

Global per capita consumption of sugar

Indian Sugar Industry a snapshot

ParticularsUOMCrushing Season2010-112011-12Sugar Factories in OperationNos527529Crushing Capacity Million TCD24,224,8Sugarcane Crushed mmt239,8256,9Sugar Produced Mmt24,426,3Sugar Recovery %10,210,2Yield of Sugarcane MT/Hect70,170,3

Sugarcane Area Contribution of Major States

India: Area under Sugarcane cultivationThere is no significant expansion in the acreage of sugarcane *above numbers are in 000 Hectares

StatesSeason2002-032003-042004-052005-062006-072007-082008-092009-102010-112011-12AverageIndia45203938366242015151504344084202494450864516Andhra Pradesh233209210230264247200158192204215Gujarat203176197197214208197192188202197Karnataka383243178219326296210326421430303Maharastra573443324501104910887707369641022747Tamil Nadu261192232336391352323314336382312Uttar Pradesh21492030195521562247217920581977212521622104

India- Sugar recovery %Sugar recovery is more or less stagnant over the decade

StatesSeason2002-032003-042004-052005-062006-072007-082008-092009-102010-112011-12AverageIndia10,3610,2210,1710,2110,1610,5510,0310,2010,1710,2510,23Andhra Pradesh10,1010,3110,6510,059,7010,129,899,289,759,799,96Gujarat10,5810,9310,7610,8210,6410,6710,7210,539,9910,6110,63Karnataka10,7910,1910,1110,8210,5710,8710,2810,7010,9111,1410,64Maharastra11,6410,9211,3911,6811,3911,9211,4411,5111,2911,6511,48Tamil Nadu9,889,929,649,249,259,329,628,939,089,319,42Uttar Pradesh9,539,829,799,519,479,798,949,139,149,079,42

India Sugarcane yield /hec Sugarcane productivity is almost stagnant over the years.(In Tons per hectares)

StatesSeason2000-012001-022002-032003-042004-052005-062006-072007-082008-092009-102010-112011-12AverageIndia69676459656769686766697066Andhra Pradesh82836672757782827874778277Gujarat71716972747473817370767073Karnataka103818566808388838390949085Maharastra83787458637875817985858076Tamil Nadu1051029392101104105108106101108103102Uttar Pradesh55585656615860575259576057

Limitations in increasing productivity

Cyclicality in sugar Industry Unpredictable climateDepleting water resources Crop competition and food security challenge Land fragmentation and small land holdingsDepleting soil health/monoculture Increasing cost of cultivation-inputs/labor etc Improper sugarcane varietal mix and low sugar yieldLack of focus on Cane research and development

Sugar Production and Sugar Consumption

India- State wise per capita consumptionStates with relatively lesser demand will soon catch up with the high sugar consumptionWide gap from 10-28 Kg/Person

India- Projected domestic sugar consumption

Increasing demand expected to reach 30 million tons by 2020

Shared VisionPolicy MakersFarmers & MillersConsumersFulfill customers needsSelf sufficiency to meet domestic demand

Social welfare of stakeholders

Contribution to Indias energy requirementEconomic profit driven growth

Risk and cost minimization

Collaboration between each otherTowards a more efficient sugar industry

Potential & Opportunities

Implementation of sugar & cane price linkage formula ( Dr Rangarajan Committee) Integration of Indian commodity exchanges with the world marketStable trade policy-import/export (Timely decisions)Mandatory support for Cogen Power (tariff support/REC benefit)Implementation of Ethanol Blending policy (10% -recently announced) Proper coordination for research and development (IISR,SBI,VSI,UPSCR)Integration of all Govt schemes like SDF,NFSM,RKVY for the purpose of sugarcane development and infrastructure improvement Water harvesting/drip irrigation to be taken up as a major initiative Development of Micro entrepreneurs/custom hiring model Training modules for growers/staff to be developed and implemented

Action Agenda

Thank you!