Financial crisis of Indian sugar industry: Case study of Uttar Pradesh

Abstract

The sugar industry is in the middle of a severe financial crisis. It’s getting harder and harder for the industry to keep up with payments to cane growers because of its persistent cash flow issues. Sugar prices continue to fall on a monthly basis. A government incentive to increase raw sugar production and exports was announced, but prices have fallen even further. Teng, Y. P., & Liu, Y. A. [17]. Oversupply in the domestic market has led to record cane arrears in the Indian sugar industry. Mills’ inability to generate cash flow due to low sugar realisations has also led to financial crises. The research paper is divided into three major portions. The first portion is the descriptive study of Indian sugar industry. Second portion is regarding the identification of the problem through the short empirical analysis. Some key indicators are being analyzed through the financial ratios. After finding out the challenges in sugar industry, the government support and policies drafted to bring back the industry on track are discussed in the third portion.

Subject Classification:

• 00A17

Keywords:

• Sugar mills
• Financial crises
• Cane arrears
• Liquidity