How sugar has eaten into jaggery, khandsari’s market share

From 4.8 kg/year in 1960-61 to 19 kg/year in 2020, per capita consumption of sugar in India has grown steadily while per capita consumption of gur (jaggery) and khandsari (unrefined raw white sugar made from thickened sugar cane syrup) has declined from 15.2 kg/year in 1960-61 to 4.1 kg/year.

The data available with the ICAR- Sugarcane Breeding Institute show that the total consumption of sugar in India was 21.13 lakh tonnes in 1960-61 which increased to 254.50 lakh tonnes in 2017-18.

Out of total sugarcane production of 140.604 million tonnes in 1975-76, about 30 per cent was used for production of sugar while 58 per cent was used for gur and khandsari production. In 2017 -18, out of about 376.90 million tonnes of sugarcane, 80 per cent was used for sugar production while just 11 per cent for gur and khandsari .

Why the shift

The increase in production of sugar is largely due to regulations that have given large profits to farmers giving their sugarcane output to sugar mills, through the Fair and Remunerative Price (FRP) and State Advised Price (SAP) mechanisms. According to the Indian Sugar Mill Association (ISMA), the mark up above the cost of production of sugarcane, at an all-India average basis, is as high as 100 per cent over the cost of producing sugarcane. Also, cane has become a political crop in Maharashtra and Uttar Pradesh helping farmers get FRP and SAP hike every season, say experts. On the other hand, there is no organised sector when it comes to jaggery and khandsari .

Higher consumption due to changing lifestyle and increased urbanisation could also be causing the shift. OECD-FAO’s Agricultural Outlook 2019-2029 predicts increases in global sugar consumption over the next 10 years exclusively from the developing countries. Asia and Africa will be the largest contributors to additional demand, with 68 per cent and 30 per cent of additional demand respectively. In Asia, it is expected that India, followed by Indonesia, China, and Pakistan, will experience the largest increases in sugar consumption.

The decline in consumption of gur and khandsari has a direct impact on their manufacturing units. Khandsari and jaggery are manufactured from cane juice with traditional technology and provide job opportunities for the locals. The village technology used in-house resources available in the village, including inputs and knowledge. Villagers have known the science of producing khandsari from purified cane juice for decades. “ The khandsari sugar sector is shrinking whereas the jaggery sector is expanding” observed the government of India’s status report on khandsari and jaggery. There is a lack of authentic data on the number of khandsari and jaggery units in India while 497 sugar mills crushed cane this season.

Sugar industry’s worry

The number of sugar mills in India are however multiplying. Mills across the country have produced 305.68 lakh tonnes of sugar between October 1, 2020 and May 31, 2021. This is 35.63 lakh tonnes higher than 270.05 lakh tonnes produced at the same time last year. The rise in domestic consumption and export are the two main targets before the sugar industry to trim down inventory, fight liquidity crunch and pay cane arrears.

Even as the sugar industry continues to look to export sugar to other countries, it is also busy allaying fears about sugar consumption in the domestic market.

According to the Indian Sugar Mill Association, the per capita sugar consumption in India is much lower than the world average of 23 kg. The per capita growth of sugar consumption in India between 2000 and 2016 has been amongst the lowest in the world at around 1.25 per cent a year, based on a simple average.

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