1. A Bitter Sugar Industry Cries for
Deregulation
Vivek Ethiraj
11EMBA10

2. Economic Times: 22 Aug 2011
By, Ajay Shriram
Chairman and Senior Managing Director
DCM Shriram Consolidated Ltd

3. Reasons to deregulate the price
PDS Sugar is 40% below the production
price causing a loss of Rs. 3000 crore.
Domestic Consumption is 1/3 the total
output.
Mills neither have adequate storage
capacities nor cash flows to manage the
surplus inventories, which may trigger
distress sale.
4 Year crop cycle.

4. Cane Production cycle

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. Thank You