Sugar business in India | Amazing ideas related to sugar industry for happy buyers

Want to information on origin of sugar?  What is composition ,types and basic parameters of sugar Business. 

My self Nita Hinduja and NH Global with company partner's are involved in sugar business in India. We observed that some basic aspect that lead to failure of sugar industry and here in way of blog we are navigating you to important part of big picture of sugar Business.

Here I am to give you some valuable insight that covers some facts and some working practical ideas with sugar and sugar industry.

Sugar Business in India. 

Sugar Business

Sugar sweetens our life with its sweet taste.

Sugar is widely consumed all over world since ages. People having habit of sweets simply can't resist without sweet food.

Sugar is evergreen product in regular demand through ages. People of all age group of different community like to consume it in form of confectionery, dessert, recipes, sweets, chocolate,syrups etc.  Sugar is widely consumed in occasions like marriages, birthday parties, anniversary and other occasions.

Since centuries sweetning material was stored in lockers and was valuable traded material.

Nowadays it has become part of our daily diet. 

Let's enjoy in informative roller coaster about sugar.

Around 17 th century a German scientist named Marggraf  discover sweetness aspects of beet and sugar cane and thought of preparation of sweetning material from it.

Origin of word is from Sanskrit word "Sarkara" refined sugar. Nearly after first century sugarcane cultivated in northern part of India that play vital role in sugar formulation. Term 'Glucose' was made by Jean Dumas around  1838  from Greek word 'glyco'.

 Around 6 th century sugarcane originally from New Guinea was traded to India and other places.

Types of sugar element in sweet material .

• Sweetness is found natural form like  glucose, fructose, galactose example of monosaccharides. 

• Whereas sucrose, Lactose,Maltose, Trehalose are disaccharides.

• Homopolyssaccharides are Starch , glycogen, Cellulose.

• Hetropolyssaccharides are Peptidoglycans,Agarose,Glycosaminoglycans.

• All are different in chemical composition, form and effective consumption.

Sugar cane has natural form of sugar.

Types of Sugar 

• Granulated Sugar

• Caster Sugar

• Confectioners Sugar

• Pearl Sugar

• Sanding Sugar

• Cane sugar 

• Demerara Sugar

• Turbinado Sugar

• Muscavodo Sugar

• Light Brown Sugar

• Dark Brown Sugar. 

Further sugar types and most trading sugar or sweentning material used are

Unrefined sugar

Raw sugar also known as brown sugar. They are available in different taste and colour shades of brown. It is used as sweetener in many bakery items. ICUMSA (International Commission of Uniform Method of Sugar Analysis) level is 600 to 1200.

Jaggery

It is condensed sugarcane juice date or palm sap without separation of the molasses and crystals, and can vary from golden brown to dark brown in colour

Refined sugar

White crystallizing granular sugar made up of sugar cane or sugar beet.

Powdered sugar, superfine sugar, sugar cubes are examples 

India have two types of sugar granulated and superfine Granulated Sugar (icumsa below 100)

• M -30

• M -31

• SS -30

• S1 -30

• S2 -30

• Superfine sugar

• Icumsa 45

• Damage sugar :- sugar which is damage due to wet, old crop,and other process is used mainly for industrial purpose like ethanol productions and for various methods.

Sugar cane field cultivated land with fertile soil is important for quality of sugar

Sugar Business foundation 

• Sugar trade is risk free if certain rules and principles are followed along with spark of luck.

• This Business can be executed in any good city of India. 

Major advantage if it is opened in Maharashtra, UP , MP , Gujarat etc.

• Registration process involves MSME registration, GST registration, Trade license, Office state registration, Firm current bank account, Firm PAN card.

• For finances they can invest there money or from angel investors, loan from private firms or  bank loan.

• They need proper firm documents, license, identity documents,IT return, Fund assurance etc. 

• Average size trading company of sugar can be initiated with basic investment on office , warehouse , website and basic staff. 

• Office rent cost per month can range from 5k to 20k plus INR  and warehouse rent from 15k to 20k approx.

• Basic expenses includes stationery cost , electricity bill , maintenance cost, tax filing, staff salary, miscellaneous cost average of 10k to 20k plus per month.

• Transportation and logistics cost depends on order and can be in lakhs depending on distance from sugar mill to destination area. 

• Labour cost to load and unload material depends on labour rate per day of region and number of labour employed.

• For process orders are needed from India and abroad.

• Buyer should be proper  registered company with money, knowledge, connection, power and right attitude.

• Price of sugar are as per current market price of sugar and current year crop and last year crop sugar price.

• Packing of sugar comes in 50 kg PP bags but customized packing can be done through additional cost.

• Sugar business in India involves risk as number of fraud activities are being noticed and reported but with Government policy , commerce chamber rules and State sugar association have updated policy for better trading.

• Many strategies should be considered in sugar business plan leaving no chance for any failure.

• Depending on trader, funds and well executed strategies will generate sugar business profit to highest level every month.

• Sugar distribution business plan should be made and various outlet for sugar retailing should be provided.

• Sugar export business can be started providing atleast one 20 feet container to Dubai , Singapore and other places on LC basis. Regular orders can be obtained and more places in world be targeted to supply sugar.

• Sugar production business is done by sugar mill or sugar factories that produces sugar from sugarcane juice that is extracted from sugar cane cultivated on fertile land. 

• Sugar retail business can be profitable if they have price benefit and other facilities. 

Company Policy for sugar trade

• LOI letter of Intent is must along with last year IT return before we quote price as price validity remains for 6 to 7 days and update price as per market will be provided.

• Without any sound buyers profile we can't ensure you any meeting,visit, inspection or any lab report, SGS report , CHA prices, proof of product, samples. Furthermore legal claims and charges will be claimed from fake documents and fake people.

• Only potential sugar buyer required Ex-Factory sugar stock then they pay us commission for our work or for export FOB or CIF process LC and other payment terms are must.

• We refuse payment on COD, against BL,TT, Usance LC etc.

• For export LC payment from only top International Banks 

• For booking of the stock proof of Fund  POF is mandatory after receiving SCO buyer have to ensure MT-799 as per bank and buyer consent.

Precautions in sugar trading

• Buyer should focus to pay EMD upto 2% approx and to be paid to factories not to rely on any mandate companies as this can lead to scam or financial loss.

• Any  advance payment can be given in form of DO and don't pay any advance to any other terms or to any mandate.

• Never impress after seeing allocation and any video and photos from mandate company name because their are lots of person who inspect sugar factories and take video of stock but lots of them are fake mandates.

• Never believe the person who committed you to give sugar in cheap rate on BG, LR, LC, PDC and SBLC.

• Never fall for cheap price sugar in market because you may be in big trouble if scammers will contact you and promise prices on any company who committed you that they have sugar in their warehouse because government has banned to any longer stock holding they are either time pass or want to do scam with you.

• Please stay away from company or mandate who have any allocation of 50,000-1lac-10lac tonnage they have no idea how to do business in that sector.

Sugar crystals

Government schemes for sugar business 

Under the Sugar Scheme, NCDC has been expanding formation and development of sugar factories in the co-operative sector so as to help them in achieving the basic objective of confirming remunerative prices to the farmers for sugarcane that help in sugar industry.

• For equity participation in new co-operative sugar mills State Government are provided investment loan to remain resourceful.

• For establishment of new mill term loan will be made available

• For existing co-operative sugar mills for modernization/ expansion of capacity term loan is made available.

• For development of sugar by-product units availability of term loan..

• Existing co-operative sugar mills will be provided additional money.

• For working capital requirements of cooperative Sugar mills short term loans will be made available

Eligible Cooperative Societies:

Funding is provided to National/State/District/Regional/Primary level Cooperative Sugar Federations/Societies. Eligibility criteria can be checked as below.

Eligibility conditions for cooperating New Mills

Fix term loan. Placed orders for plant and machinery. Adequate sugarcane potential. Techno-economic feasibility

Eligibility conditions  for assisting Modernisation-cum-expansion Projects

Adequate cane potential. Techno-economic feasibility. Capable of raising own share of project cost

Eligibility conditions for Assisting Sugar By Product Units

Techno-economic feasibility. Capable of raising own share of project cost

Term loan assistance towards margin money requirements and Working capital Scheme.

Quantum of short/medium term loan to cooperative sugar factories assistance will be on case to case basis.

Dovetailing Govt. of India scheme:

1. The Sugar Development Fund (SDF) of the Ministry of Food, Public Distribution and Consumer Affairs, Govt. of India  provides soft loan to meet shortfall in promoters' contribution towards equity participation up to a maximum of 40% of the project cost, depending on financial resources of the coop. Sugar factories. The balance not less than 10% of the project cost is to be met by the society either by way of raising as additional shares capital or from its internal accurals.

2. SDF assistance for all Cooperative Sugar Mills is routed through NCDC.

3. Capital subsidy from Ministry of New and Renewable Energy (MNRE) for co-generation projects funded by NCDC is routed through NCDC.

Bridge loan assistance against SDF sanction:

Bridge loan assistance up to 85% of SDF sanctioned assistance may be provided for the intervening period between SDF sanction and disbursement. The rate of interest on bridge loan is 1% more than the rate applicable to NCDC term loan assistance at the time of release.

Mode of Funding:

Financial assistance is provided through the State Government or directly to the eligible cooperatives on certain prescribed terms and conditions. NCDC provides financial assistance in the form of loan (both Term Loan and Investment Loan). Under the Working Capital Scheme, the assistance can also be extended through the State Apex Coop. Banks providing working capital assistance to the sugar mill(s) directly/through DCCB.

Quantum of Assistance and Pattern of Assistance:

Quantum of assistance may be up to 90%-95% through State Government & 65-75% of project cost directly to the society. In case of business promotion viz. margin money/ working capital / strengthening of share capital quantum of assistance can be upto 100% of the requirement..

Yuva Sahakar - Cooperative Enterprise Support and Innovation Scheme:

To encourage newly formed cooperatives take advantage of innovative ventures, especially by societies with new/innovative idea, NCDC has introduced a new scheme titled, “Yuva Sahakar - Cooperative Enterprise Support and Innovation Scheme” linked to a Cooperative Startup and Innovation Fund created by NCDC.  

Norms for direct funding:

Cooperatives operating for minimum three years & broadly fulfilling following criteria are eligible:

Net worth should be positive.. There should be no erosion in share capital..Should be in a position to provide 1.25 to 1.5 times security..Financial /operational performance of the cooperative should be at satisfactory level of NCDC.

Impact of NCDC’s assistance in the sector:

The role played by NCDC in promoting and financing cooperative sugar mills has given a real boost to sugar industry. Consequently, the share of cooperatives in the national production of sugar has risen from 15.54 lakh ton since 1973-74 to 98.56 lakh metric tons (upto crushing season 2020-21)..Increase in number of installed sugar mills from 102 in 1973-74 to 283 as on 31.03.2021..Improvement in the socio-economic standards of farmers.Cooperative sugar mills are acting as NUCLEI for area development..Value addition and remunerative price to sugarcane.

January 2022 News

About 4.68 lakh tonnes of sugar is in transit, the All India Sugar Trade Association (AISTA) said in a statement. Mills have contracted to export 33 lakh tonnes of sugar without the government subsidy so far in the 2021-22 marketing year, it added.

Thanks for reading my article

You can candidly contact me

Nita Hinduja

+91 9726682497

FAQ

Q Why sugar business is important?

Their is huge possibility to earn good profit if you manage to follow right steps.

Q What obstacles generally faced in sugar business?

Proper funds, Business plan, right connection with right people and right knowledge with right attitude is important.

Q How we can find solutions to any problem related to sugar Business.

It is important to be in connection with experience people and you can reach us Nita Hinduja +91 9726682497

Dear Readers

What other ideas can you add to this list that I may have not mentioned? Please comment in comment's inbox.

Did you find this blog post helpful? If so, please share it with friend.