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A bitter sugar industry cries for deregulation

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A bitter sugar industry cries for deregulation

  1. 1. A Bitter Sugar Industry Cries for Deregulation Vivek Ethiraj 11EMBA10
  2. 2. Economic Times: 22 Aug 2011By, Ajay ShriramChairman and Senior Managing DirectorDCM Shriram Consolidated Ltd
  3. 3. Reasons to deregulate the pricePDS Sugar is 40% below the productionprice causing a loss of Rs. 3000 crore.Domestic Consumption is 1/3 the totaloutput.Mills neither have adequate storagecapacities nor cash flows to manage thesurplus inventories, which may triggerdistress sale.4 Year crop cycle.
  4. 4. Cane Production cycle
  5. 5. Influence on the Market• Supply is highly inelastic.• Government is burdened on multiple counts- – Sustain the cane farmers. – Constantly monitor Supply and regulate the price. – Keep the sugar Industries from exiting the business.
  6. 6. Thank You

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