India's Sugar Economy
How a Sugar Mill Makes Money
How sugar mills earn from sugar and by-products like molasses, bagasse, electricity and ethanol, and why integrated mills are more resilient.
A sugar mill earns from more than just sugar.
Products from cane
- Sugar: the main product; recovery is around 10 to 11 percent of cane weight.
- Molasses: a thick syrup left after sugar extraction, used for alcohol and ethanol.
- Bagasse: fibrous residue, burnt to produce steam and electricity (cogeneration), or used for paper.
- Press mud: used as fertiliser.
Cogeneration
Many mills produce electricity from bagasse, using some themselves and selling the surplus to the grid.
Ethanol
Mills can make ethanol from molasses, or directly from cane juice and B-heavy molasses, diverting sugar production into fuel.
Integrated mills
Mills with distilleries and cogeneration plants earn from several products, making them more resilient when sugar prices fall.
Efficiency
- Crushing capacity and season length.
- Recovery rate: better cane varieties like Co 0238 raised recovery in UP.
Old mills
Many old cooperative and public mills are small and inefficient, and some have closed.
When sugar prices fall, an integrated mill shifts more cane juice to ethanol and sells extra electricity, keeping profits steady.
They also earn from molasses, electricity and ethanol.
- Mills produce sugar, molasses, bagasse and press mud.
- Bagasse powers cogeneration electricity.
- Ethanol from molasses or juice adds revenue.
- Integrated mills are more resilient.
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