Business Daily from THE HINDU group of publications
Tuesday, Sep 05, 2006
Business Daily from THE HINDU group of publications Tuesday, Sep 05, 2006 |
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Markets - Stocks Agri-Biz & Commodities - Sugar Columns - Ear to the ground Deeptha Rajkumar
Analysts predict that domestic sugar prices for the next 6-8 months are likely to remain stable to weak. Following this, profit of sugar companies are expected to come under pressure. Industry experts maintain that following a decline in global sugar prices, companies have lost export opportunities, which could hit their bottomline. Even if the Government was to allow exports post-October 1, given that prices have crashed to less than $300 a tonne, profits on exports would be completely squeezed, said sources. With a fairly large cane crop expected next season starting October (around 300 million tonnes), total production of sugar for the year is expected to be around 21-22 mt. Thus there will be a huge surplus within the country, leading to a decline in sugar prices. Domestic price of sugar in fact is expected to decline to less than Rs 1,700 a quintal by December, industry experts predict. Leaving aside the counter of Balrampur Chini, most other sugar stocks (B1,B2), including that of frontliner Bajaj Hindusthan, have been rangebound in the recent past. Amongst the stocks that were trading flat to weak on Monday were Mawana Sugar (Rs 77.25), Oudh Sugar (Rs 118.30), Simbhaoli Sugar (Rs 75.95) etc on the BSE.
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