Sugar Outlook for 2011: Care Ratings

Besides, increase in government control by hiking levy sugar quota by additional 10% and introduction of fortnightly release mechanism, instead of monthly release, led to a steep fall in sugar price after January 2010.

The sugar industry is cyclical in nature and the entire value chain is controlled by the government. In SS10, the performance of the sugar companies was adversely impacted by shortage of sugarcane resulting in very high raw material cost. Besides, increase in government control by hiking levy sugar quota by additional 10% and introduction of fortnightly release mechanism, instead of monthly release, led to a steep fall in sugar price after January 2010.

(Source: http://www.indiainfoline.com/Markets/News/Sugar-Outlook-for-2011-Care-Ratings/5137353991)