Rahul TERM Paper ECo

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TABLE OF CONTENT

INTRODUCTION

SUGAR PRICE

DEMAND FACTOR – GLOBAL

DEMAND FACTOR – INDIA

RELATIVELY INELASTIC DEMAND CURVE

GLOBAL PRODUCTION, SUPPLY

SUGAR PRODUCTION AND SUPPLY IN INDIA

FACTORS AFFECTING PRODUCTION

THE BREAK-EVEN POINT

SUGARCANE UTILIZATION

SUGAR CONSUMPTION IN INDIA

SUGAR EXPORT

SUGAR PRODUCTION

SUGAR MARKETS IN DISARRAY

SUGAR IN THE NEXT CENTURY

Introduction:



India is the largest producer of sugar in the world. In terms of sugarcane production, India and Brazil are almost equally placed. In India, out of thetotal cane available for crushing, 45% goes for sugar production and 55%for the production of ethanol directly from sugarcane juice. This gives thesugar industry in Indial an additional flexibility to adjust its sugar

production keeping in view the sugar price in the international market asnearly 40% of the sugar output is exported.

Sugar industry – Global:

India are the largest sugar producing countries followed by China, USA,Thailand, Australia, Mexico, Pakistan, France and Germany. Global sugar

production increased from approximately 125.88 MMT in 1995-1996 to149.4 MMT in 2002-2003 and then declined to 143.7 MMT in 2003-2004,whereas consumption increased steadily from 118.1 MMT in 1995-1996 to142.8 MMT in 2003-2004.

The world consumption is projected to grow to 160.7 MMT in 2010 and176.1 MMT by 2015. According to ISO, the world sugar output isforecasted to reach 145.0 MMT and consumption to reach 147.0 MMT in2004-2005, resulting in a deficit of around 2 MMT in 2004-2005. Further,since October 2003, nearly 5 MMT of surplus sugar are expected to have

been removed from the world sugar balance, reducing the stock/consumption ratio to less than 42%.

SUGAR PRICE:

The Government has been following a dual pricing policy for sugar, under which, a fixed percentage of the total production is to be necessarily sold bythe sugar mills to the Government or its nominees at a pre-determined pricereferred to as "levy sugar". The sugar so collected is distributed toconsumers through Fair Price Shops under the public distribution system.The balance sugar referred to as "free sale sugar" can be sold in the openmarket. Free sale sugar is also regulated to some extent, by way of a releasemechanism, whereby the Government determines the quantum of sugar thatcan be sold every month. This helps the Government maintain stability insugar prices, by regulating the supply of sugar based on the underlyingdemand. Thus, the Government statutorily determines the price of levysugar, while the price for the free market sugar is market determined,affected to some extent by the release mechanism. As per Tuteja Committee,the Central Government decided, in February 2002, to dispense with the



release mechanism with effect from April 1, 2003. However, in March 2003,it was decided to continue with the release mechanism up to September 2005 and to review the position in February, 2005. The Tuteja Committeehas also recommended that the Central Government may dispense with therelease mechanism for free sale sugar with effect from October 1, 2005

The levy imposed has reduced from 40% in the 1990s to 10% effective fromMarch 2002. The Tuteja Committee has also recommended continuing withthe 10% levy obligation level. The Committee has also recommended that

beyond the initial time limit, a maximum of 3 months may be permitted for lifting of levy sugar by the Government, where after, the levy sugar quotawould automatically be converted into free sale sugar, without any recurringlevy obligation on this portion of levy sugar.

LEVY OBLIGATION OVER THE YEARS

Year Levy Sugar: Free sale sugar ratio

1996-1997 40:60

1997-1998 40:60

1998-1999 40:60

1999-2000 40:60

2000-2001 30:70 (wef. January 2000)

2001-2002 15:85 (wef. February 2001)2002-2003 10:90 (wef. March 2002)

2003-2004 10:90

2004-2005 10:90

As can be seen from the table, while the gap between levy sugar prices andfree sale sugar prices had narrowed considerably until 2002-2003, it hassince widened due to high free sale sugar prices.

Historical Free sale sugar and Levy Sugar Prices(Rs. / metric tonne)



DEMAND FACTORS – GLOBAL:

According to ISO, the world sugar output is forecasted to reach 145.0 MMTand consumption to reach 147.0 MMT in 2004-2005, resulting in a deficit of around 2 MMT in 2004-2005. Further, since October 2003, nearly 5 MMTof surplus sugar are expected to have been removed from the world sugar

balance, reducing the stock/ consumption ratio to less than 42%.

The world consumption is projected to grow to 160.7 MMT (Million MetricTons) in 2010 and 176.1 MMT by 2015. According to ISO, the world sugar output is forecasted to reach 145.0 MMT and consumption to reach 147.0MMT in 2004-2005, resulting in a deficit of around 2 MMT in 2004-2005.Further, since October 2003, nearly 5 MMT of surplus sugar are expected tohave been removed from the world sugar balance, reducing the stock/consumption ratio to less than 42%.

The world's largest consumers of sugar are India, China, Brazil, USA,

Russia, Mexico, Pakistan, Indonesia, Germany and Egypt. According toUSDA Foreign Agriculture Service, the consumption of sugar in Asiancountries has increased at a faster rate, as a direct result of increasing

population, increasing per capita income and increased availability.



DOMESTIC CONSUMPTION FOR 2004-2005(All units in MMT)

The Essential Commodities Act (ESA) was amended and the sugar releasemechanism was brought within the direct purview of the ESA. This will

bring discipline in the sugar release mechanism by making it legallyenforceable.In the past, the Government permitted only small sized units of 1,250TCD

(TONS OF CANE) and 2,500 TCD. Expansions for 5,000 TCD and abovewere discouraged. The industry has grown horizontally as a result of this.The Government of India de-licensed sugar sector in August 1998encouraging entrepreneurs to set up sugar mills without a license but at adistance of 15kms away from existing factories. The de-licensing isapplicable not only for new capacity initiatives but also for expansion of existing capacities.The Government permitted futures trading in sugar and granted approval tothree Companies for setting up Futures Exchange. Consequently, certainsugar Companies floated Public Limited Companies to cater to this newsegment. Futures trading will allow sugar companies to hedge and managetheir risk better.The Government of Uttar Pradesh has issued a new UP Sugar Policy. TheUP Sugar Policy recognises the need to attract new private mills because theGovernment sector and the Co-operative sector may not be able to put upthese mills due to constraints of funds. The incentive package under the UP



Sugar Policy includes capital subsidies, reimbursement of transportationcosts of sugar, etc.

Demand Factors:

The demand or in other words, the consumption of sugar is increasing andthe demand is being fulfilled by more production. Still, the price of sugarhas been elastic and rising steadily. Though, being a basic commodity,

price hike limit has been fixed time to time by the government. Otherwise,sugar would have been directly influenced by little fluctuations in demandand supply.

Main Production Centers:

In India, major sugarcane growing states are Uttar Pradesh, Maharashtra,Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh. These six statescontribute more than 85% of total sugar production in the country; Uttar Pradesh and Maharashtra together contribute more than 57% of total

production.

Sugarcane Production in India:

Sugarcane occupies about 2.7% of the total cultivated area (Source: ISMAWebsite accessed on May 16, 2005) and it is one of the most important cash

crops in the country. The area under sugarcane has gradually increased over the years mainly because of much larger diversion of land from other cropsto sugarcane by the farmers for economic reasons. The sugarcane area has,however, declined in the year 2003-04 mainly due to drought and pestattacks. Following table shows area under sugarcane farming and total can

production.

SUGARCANE AREA AND PRODUCTIONFROM 1980-1981 TO 2000-2001 & UPTO 2003-2004



Year Area under sugarcane(Million hectares)

Sugarcane Production(MMT)

1980-81 2.7 154.31990-91 3.7 241.1

1999-'00 4.2 299.2

2001-02 4.4 298.4

2002-03 4.3 281.6

2003-04 3.9 221.2

2004-05 3.7 201.9

Economics Overview on Demand (PRICE ELASTICITY):Sugar as a necessity commodity is used by each and every individual. The

price elasticity for sugar is relatively inelastic demand. We can express it byfollowing graph:

D

P0

PRICE OF SUGAR

P

D

Q0 QQUANTITY OF SUGAR

The above relatively inelastic demand curve shows that with a more increasein price of sugar the demand for the sugar is less affect. Because of necessitygood.



Global Production Supply:

Following table provides an overview of the production, supply anddistribution of sugar in the international market.

WORLD SUGAR PRODUCTION, SUPPLY, AND DISTRIBUTION(September - August)

(All figures in '000 metric tons)

2003-2004 2002-2003 2001-2002 2000-2001 1999-2000

OpeningStocks 69,327.3 62,040.0 62,063.3 62,223.6 57,611.7

Production 143,701.9 149,405.2 137,982.6 132,200.0 134,753.9

Imports 48,190.3 48,593.2 45,261.1 43,573.9 41,226.3

Exports 52,062.7 51,339.9 47,759.7 44,212.9 42,720.6

Consumption 142,766.9 139,371.1 135,507.3 13,1721.2 128,647.7

Ending Stocks 66,389.9 69,327.3 62,040.0 62,063.3 62,223.6Ending stocks as% of consumption

46.50% 49.74% 45.78% 47.12% 48.37%

According to ISO, the world sugar output is forecasted to reach 145.0MMT and consumption to reach 147.0 MMT in 2004-2005, resulting in adeficit of around 2 MMT in 2004-2005. Further, since October 2003, nearly5 MMT of surplus sugar are expected to have been removed from the worldsugar balance, reducing the stock/ consumption ratio to less than 42.

Sugar Production and Supply In India:

The sugar industry in the country uses only sugarcane as input, hence sugar Companies have been established in large sugarcane growing states like



Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu, and AndhraPradesh. These six states contribute more than 85% of total sugar productionin the country; Uttar Pradesh and Maharashtra together contribute more than57% of total production.

Following table shows the state-wise sugar production in India for 2002-2003 and 2003-2004.

SUGAR PRODUCTION BY STATE IN INDIA (in MMT)

State 2002-2003 %of Total 2003-2004 % of Total

Uttar Pradesh 5.65 28.06% 4.55 33.60%

Maharashtra 6.22 30.86% 3.18 23.44%

Karnataka 1.87 9.28% 1.12 8.24%

Gujarat 1.25 6.22% 1.07 7.87%

Tamil Nadu 1.64 8.16% 0.92 6.80%

Andhra Pradesh 1.21 6.01% 0.89 6.54%

Haryana 0.64 3.16% 0.58 4.30%

Punjab 0.59 2.91% 0.39 2.88%

Uttaranchal 0.50 2.47% 0.39 2.86%

Bihar 0.41 2.03% 0.27 2.02%Others 0.17 0.85% 0.20 1.46%

TOTAL 20.14 100.00% 13.55 100.00%

Indian sugar industry has grown horizontally with large number of smallsized sugar plants set up throughout the country as opposed to the



consolidation of capacity in the rest of the important sugar producingcountries, where greater emphasis has been laid on larger capacity of sugar

plants. The average sugarcane crushing capacity in India, Brazil andThailand is given below:

AVERAGE SUGARCANE CRUSHING CAPACITYCountry Avg. Capacity (TCD)

Thailand 10,300

Brazil 9,200

India 3,500

FACTORS AFFECTING PRODUCTION:

Sugarcane availability depends on:Area under sugarcane cultivation: The area under cultivation of sugarcane inthe proximity of the mill determines the amount of sugarcane that can bemade available. Crop switching from sugarcane to other crops effectivelylowers the area under cultivation of sugarcane.

Climate and irrigation facilities: Sugarcane is a tropical crop whichrequires adequate water and sunshine. In addition, monsoons can affect thecrop yield and quality of the crop. The state of UP is supplied water from the

Ganga, which along with its tributaries and associated canal system accountsfor 34% of the total river water available in the country. This available

perennial water reduces the state's reliance on seasonal monsoons.

Crop diseases and pests: Crop diseases affect both the quantity andquality of sugarcane. Harvests have been impacted severely by insects and

pests (Eg. Wholly Aphid). Several sugar factories are currently investing inresearch and development in the field of Entomology to control such pestoutbreaks.

Sugarcane yield: This is the total sugarcane output per hectare of land. Itdepends upon several factors like climate, soil, variety of sugarcane, anddevelopment measures undertaken by sugarcane farmers, agencies, co-operatives, government, and sugar manufacturers. Agricultural engineeringand extension services, usually undertaken by individual sugar mills, have

played an important role in increasing sugarcane yields



Diversion of sugarcane to other products: The sugarcane producers may notsupply the sugarcane to a sugar manufacturer and divert the production toother products like gur, and khandsari which are forms of crude sugar.

THE BREAK-EVEN POINT:

In its simplest form, the break-even chart is a graphical representation of costs at various levels of activity shown on the same chart as the variationof income (or sales, revenue) with the same variation in activity. The pointat which neither profit nor loss is made is known as the "break-evenpoint" and is represented on the chart below by the intersection of the twolines:

`In the diagram above, the line OA represents the variation of income atvarying levels of production activity ("output"). OB represents the totalfixed costs in the business. As output increases, variable costs are incurred,meaning that total costs (fixed + variable) also increase. At low levels of output, Costs are greater than Income. At the point of intersection, P, costsare exactly equal to income, and hence neither profit nor loss is made.Sugarcane Utilization:

Not only has the sugarcane acreage and sugarcane production beenincreasing, drawal of sugarcane by the sugar industry has also beenincreasing over the years. In India sugarcane is utilised by sugar mills aswell as by traditional users like gur and khandsari producers.In early 1980s, the proportion of sugarcane drawn by the sugar industry washovering around 35%, which went upto to 50% in 1990s and to as high as69% in the year 2002-2003. The sudden growth in 2002-2003 can beattributed to the fact that sugar prices in this year were very low and Gur andKhandsari manufacturers could not effectively compete with the low sugar



prices.

In the year 2003-2004, percentage drawal of sugarcane, however, declineddue to rising sugar prices and more intense competition from the alternatesweeteners - gur and khandsari.

Following table gives data on sugarcane utilization for differentpurposes.

SUGARCANE UTILISATION% Sugarcane utilisation for

Year Whitesugar Gur and khandsari Seed, feed and chewing

1980-1981 33.4 54.8 11.81990-1991 50.7 37.4 11.8

2000-2001 59.7 28.8 11.5

2001-2002 57.4 31.5 11.1

2002-2003 68.9 20.1 11.1

2003-2004 56.1 32.5 11.4

SUGAR CONSUMPTION IN INDIA:

Total Indian Consumption of sugar has grown at a Compounded AnnualGrowth Rate of 3.6% from 14.7 MMT in 1997-1998 to 18.2 MMT in 2003-2004.

Apart from white sugar, India also consumes alternate sweeteners - gur andkhandsari, which are placed at about 9 MMT per annum. Taking intoaccount all the 3 sweeteners i.e. white sugar, gur and khandsari, on a per capita basis, Indian consumption is more than the world average (See thetable below). However, white sugar consumption is much lower than theworld average.

The consumption of white sugar in India is generally urban based. In ruralareas the alternate sweeteners gur and khandsari are consumed in larger quantities. The consumption of sugar in urban areas in some of the Indianstates with higher GDP and income levels, matches favorably with various



developed countries. The highest per capita consumption of sugar is in thestates of Punjab and Haryana which are adjoining the sugar producingregion of western UP. As income levels and GDP rises, it can be expectedthat there will be a gradual shift from consumption of alternate sweeteners towhite sugar. Also, as can be seen from the following table, the total per

capita consumption of sweeteners in urban India is higher than total Indiaaverage by around 5 kg per annum. This clearly implies that per capitaconsumption of sweeteners in rural India is much lower. It can be expectedthat this gap will close with increase in urbanization leading to a growth inthe total sweeteners market in India.

PER CAPITA CONSUMPTION OF SUGAR IN URBAN INDIA

States Kgs. Per annum

Punjab 71.5

Haryana 68.5

Maharashtra 40.9

Gujarat 40.9

Kerala 41.5

Uttar Pradesh 35.2

Tamil Nadu 29.1

Karnataka 23.3All India 31.5

In India, the glut on the domestic market following the sharp rise in 1998/99 production did not stop importers bringing in huge amounts, given thedifferential between world and domestic prices, and low import tariffs.Following protests by the domestic industry, the government stepwise raisedthe import duty. But imports continued because of the sharper fall in worldmarket prices.Even Malaysia, the government of which took steps to control domesticdemand to stem the outflow of foreign exchange, kept imports at reasonablelevels. The same is true of South Korea, where net imports dipped onlyslightly in 1998, while a modest rise is forecast for 1999.In the Philippines, careful economic management, together with liberalimport rules to augment domestic supplies after the 1998/99 crop shortfall,



prevented a fall in sugar consumption. As a result, imports in 1998/99 werenoticeably above those of the previous year.The very high support levels for sugar that form part of the stabilizationregime in Japan have for years impacted on that country's sugar consumption and imports. While Japan has been affected by the economic

crisis in the Far East, the long-term declining trend of imports and demandhas hardly varied in the past two years.The Chinese economy has remained largely untouched by the Asianfinancial crisis, although GDP growth has slowed to single digits. But anexpected growth of more than 6 percent in 1999 can hardly be called adisaster. What has affected China's demand growth is not so much theslowdown of the economy but the large usage of high-intensity sweeteners,mainly saccharin. And that has nothing to do with Far Eastern economic

problems.

CHART OF ASIAN SUGAR CONSUMPTION



Sugar Export:

Exports of sugar from the country have been de-canalized since 1997,enabling sugar mills to undertake exports on their own and to competedirectly in the international market. Further, exports from a mill do not form

part of the quota under the market quota releasesystem.

Despite this, India has not been a consistent exporter of sugar in the past. It

has been exporting sugar occasionally in periods of sugar surpluses. In thelast five years it exported 4.07 MMT sugar. In these years, India had anaverage exportable surplus of 6.23milliontonesevery year. As against this,on an average, the sugar exported was only 0.81 MMT or 7.69% of the totalexportable surplus. This is primarily because domestic prices have remainedhigher than international prices. However, should quotas for LOME / APECfor India increase; there will be enough incentive for Indian manufacturersto export.

EXPORTABLE SURPLUS, SUGAR STOCK & ACTUAL EXPORTS

Year ClosingStock (MMT)

Exportablesurplus (MMT)

ActualExport

% export of surplus stocks



(MMT)

1999-00 9.38 5.38 0.07 1.30

2000-01 10.4 6.4 1.2 18.75

2001-02 11.3 7.3 1.1 15.062002-03 11.6 7.6 1.5 19.73

2003-04 8.5 4.5 0.2 4.44

Average 10.23 6.23 0.81 7.69

Lax financial discipline forced Brazil to freely float the real from January1999. Between March 1998 and March 1999, the real devalued by more than60 percent, which greatly increased Brazil's competitiveness and the

attractiveness of the export market relative to the domestic market for thecountry's sugar producers. The devaluation of the real has undoubtedlydrawn significantly more sugar into the international arena. To a largeextent, the devaluation cushioned the effect of the fall in world market

prices and helped Brazil to pump out enormous amounts of sugar, facilitated by the diversion of cane from alcohol to sugar production. Greater competitiveness and low freight rates made Brazilian sugar appear inmarkets as far afield as South Korea, Malaysia and Indonesia. The growth of Brazilian sugar exports must be regarded as one of the main factors behindthe fall in world prices.

Asian exporters have also contributed to weak prices, albeit to a far lesser extent. Thailand's sugar industry was plunged into financial difficulties bythe country's economic problems and poor returns from the world market.Many mills had to put sugar up as collateral against bank loans. Thecreditors in turn were unwilling to release the sugar at rock-bottom prices,which restricted legal exports in 1998/99, despite a recovery of production.

Following table provides an overview of the Import and Export of sugar in

the international market.



Net Sugar Imports/Exports - 1000 Tonnes, Raw value

Notwithstanding such gyrations, it cannot be denied that the structure of theworld market has changed and that today's price response differs markedlyfrom that before the mid-1980s. Without going into details, it is obvious thatone of the consequences of these changes is greater price stability than in the

past.

SUGAR IN THE NEXT CENTURY:

Looking towards the next century, we need have no fears about the future of sugar demand. On any estimate of world population growth, a great dealmore sugar will be needed. Can the additional sugar be produced and whichcountries will be the main suppliers?Technological advances already under way in the areas of genetic

engineering; ground-based and satellite-borne sensor and positioningsystems for precision field and transport management; juice filtration;combined heat and power generation and so on promise that the ever greater

productivity achieved in this century will continue in the next. The widerange of unit sizes and performance still existing within most national sugar industries, as well as between countries, indicates the vast production andefficiency reserves not yet exploited. There will also be new developments



in the field of alternative sweeteners. These new products will contribute tostill the world's hunger for sweetness, but, at the same time, will impose aceiling on the price expectations sugar producers can entertain in the longer run, without opening the gate to competitors.Structural changes on the supply side are the daily bread of the market. At

the beginning of the 19th century, Jamaica was the world's leading sugar exporter; at the end, it was Germany. From 1904 onwards, Cuba was for decades firmly installed in first place. On the eve of the 21st century, Brazilis the greatest sugar exporter.There is circumstantial evidence that with the devaluation of the real Brazilcan make money, or at least break even, at 5-6 cents/lb. If true, this couldcompletely change the face of the supply side, unless the Brazilian coststructure changes markedly for the worse. None of the other efficient

producers (Australia, Guatemala, and Thailand) are profitable at this price.Brazil already controls 25 percent of the market and still has enormous

potential for expansion. In a few years, perhaps, the world sugar market willmirror that for coffee, and adverse weather in Brazil will send shock wavesthrough the global sugar market.Alongside the challenges posed by the ongoing process of liberalization, thecall to the world's sugar industries in the 21st century is to devise strategiesof sustainable development in order to avoid the dangers of an excessiveconcentration of production and associated price fluctuations.

SUMMARY

India is one of the largest producer of sugar in the world and so alsothe consumer. Can manage its inventory to its advantage by rotatingthe same through imports and exports.Agriculture growth pegged at 3.5% - sugar cane has to compete andcompete on its own.There exists a potential in terms of increase in productivity, extractionand production.Like in the past planners/policy makers/farmers producers - should

get together to form a policy also acceptable to politicians.Optimistion of sugar mill capacity - vertical growth need of the day.PricingDecontrol may not be the answer - at the same time dual pricing

policy has to go to provide level playing field for all sweeteners.Govt. can procure sugar from market and subsidies in case, it is amust for PDS.



For the good of consumer, farmer and the mills sugar price shouldmove in a band, meaning monthly inflow to market to be regulated byGovernment.Balanced export/import policy.Mills and farmers to work together to improve yield and extractionthrough better harvesting.To become internationally competitive - i.e. cost effective and quality

producer.To be ready for free marketing i.e. to hedge on futures.With consistent policy and competitiveness India can be a regular

player in the international market.



India sugar hits record high on demand, supply delay

3 Sep 2009, 1750 hrs IST, REUTERS

MUMBAI: Indian spot sugar prices jumped over 4 per cent to a fresh record peak on

Thursday buoyed by good retail demand and a delay in announcingnon-levy sugar quota for September, traders said. Depleting stockpile and firmness inoverseas markets also bolstered sentiments, they said.

In Kolhapur, a key market in top producer Maharashtra, the price of the most tradedS-variety sugar climbed 4.2 per cent to Rs 3,021.3 ($61.7) per 100 kg, breachingearlier high of Rs 2,965 on August 11. The spot price had risen more than a quarter inAugust, while in 2009 it has jumped more than 64 per cent.

"Prices rose as government delayed announcement of non-levy sugar quota. Millerswere not releasing stocks as they were not aware how much they can sell," saidMukesh Kuvadia, secretary of Bombay Sugar Merchants Association.

Non-levy, or free sale sugar, is sold by millers in the open market, but the quantityeach mill can sell is fixed by the federal government on a monthly basis. In last week of the month, the government usually announces quota for next month, but this month

it delayed announcement till Thursday evening.

The country released 1.83 million tonnes of non-levy sugar for September, up 9.6 per cent compared to the previous month as the country is heading towards the peak festive season, the government said in a statement on Thursday.

"Prices may rise by another 4-5 per cent this week. Quota is lower than marketexpectations. Besides, household demand is robust due to new month's beginning andfestivals," Kuvadia said. Wholesale traders stock up on food articles in the last andfirst week of the month to prepare for purchases by India's salaried middle class, who

buy in the first two weeks of the month after receiving wages.

The country's peak festival season runs from August to October, when demand for sugar goes up as people consume more sweets and confectioneries. India's new sugar season will begin with much lower stocks and production will be hit by lower sugar recovery from cane after the failure of monsoon rains, Farm Minister Sharad Pawar said on Tuesday.

Last week, the head of the National Federation of Cooperative Sugar Factories Ltd,

JB Patel, said India's opening stocks would be at 2.7 million tonnes, down threequarters from 10 million tonnes on Oct 1, 2008. India has put stock limits for big



Demand outstrips supply on Nokia 3G phone

Tony Hallett sil

Published: 26 Feb 2004 11:50 GMT

Nokia handsets for use on the first 3G networks in Europe provided by3 are in very strong demand, according to comments from the boss of the continent's largest mobile retailer.

Charles Dunstone, Carphone Warehouse CEO, this morning said his

company cannot satisfy demand for Nokia 7600 terminals on 3 networks inthe UK and Sweden, which are units of Hutchison Whampoa.

Speaking at this week's 3GSM World Congress in Cannes, he said: "The barrier to 3G has been handsets [size and performance]. We had high hopesfor sales but in reality sales [of the Nokia phones] have greatly exceeded our expectations."

He went on to say that as they are manufactured in the Far East, there must be "planes flying in to London and Stockholm to satisfy demand".

The 7600 is sold by Carphone Warehouse but not directly by 3, as it doesn'tsupport all the operator's services, most notably video calling. However,there is clearly much greater demand than that for existing offerings fromMotorola and NEC, which customers have complained are too big, have low

battery life and generally are a step back from current GSM phones.

Dunstone was generally positive about progress in the mobile industry,singling out the success of the Blackberry email device from RIM andsaying Apple's iPod may go down as a turning point. "It has begun the ideathat you download content," he said, and predicted phones may end updoubling as iPod-like devices.

However, he criticised mobile content offerings, often in the form of services such as Active from O2, Live! From Vodafone, OrangeWorld andT-Mobile's T-Zones, saying content is often not exclusive or just tooexpensive.

http://www.zdnet.co.uk/archive/26-Feb-2004.htm

http://www.zdnet.co.uk/archive/#year2004

http://reviews.zdnet.co.uk/hardware/mobilephones/0,39023925,39145297,00.htm


http://reviews.zdnet.co.uk/hardware/audio/0,39023775,10004138,00.htm

http://www.zdnet.co.uk/archive/26-Feb-2004.htm

http://www.zdnet.co.uk/archive/#year2004



http://reviews.zdnet.co.uk/hardware/audio/0,39023775,10004138,00.htm



Speaking about channels such as CNN trying to charge for their news, hesaid: "Everyone is too greedy. News is too freely available for people tothink they can charge €5 per month [for it]."

He added ringtones and games shouldn't be priced above €0.99 and MMS

photo messages not more than twice that of SMS."People don't understand the price elasticity," he said. "We're pretty unsophisticated.Pricing seems to be set by accounts people, not those in sales or marketing."

Reference:http://www.google.co.in/#hl=en&q=articles+on+high+sugar+prices&meta=&aq=f&aqi=&aql=&oq=&gs_rfai=&fp=5bcb77e30ca73bbeManagerial economics. By getika piyali ghosh.

http://www.google.co.in/#hl=en&q=articles+on+high+sugar+prices&meta=&aq=f&aqi=&aql=&oq=&gs_rfai=&fp=5bcb77e30ca73bbe




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