I don’t think there will be any worthwhile impact on prices.
If Govt. controls supply, prices will increase… If they try controlling price, supply decreases would balance the same…
If, out of desperation, they try controlling price, along with supply, black markets will emerge to counter that…
While a rampant black market will not benefit the shareholders in any way, it will do more harm to the Govt. than the shareholders.
But I personally think that Modi Govt. won’t let it’s image be tarnished to that point. Afterall they’re trying to woo the Capitalist Investors… 
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This rise is fundamental…means there is less sugar than required…they can check higher prices but there steps wont’t lower it much…current sugar prices are more than sufficient for bumper profits and skyrocketting the eps of some companies.Regards
According to Howard Marks, those investing in cyclicals should always remember that a cycle is a cycle is a cycle…and there is no such thing as this time its different.
The mega sugar rally of 2003-06 happened when the sugar sector was fully under Govt control. So was the case of last sugar rally in 2009-10.
Today, Sharad pawar has said that there will be 3.5 to 4 million tons shortage of sugar. This will cause the sugar prices to be at an elevated level.
A business savy Govt like the one headed by Narender Modi realises that if the sugar mills are not able to repair their balance sheets in this 2 year upcycle, then within next 3 years about 25 -30% of the sugar industry in India will permanently shut down. If the mills don’t make money in 2 years upcycle, then how will they pay for the losses incurred in the 6 years of downcycle. Even a fool like Paswan would know that.
And another thing which is like an elephant in the room is the farmers reaction to control of sugar prices…first dalits and now the huge and strong farmers lobby in UP…can the govt afford to displease them in an election year.
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And did you notice that Govt is talking all the small steps and making the right kind of noises but is not even talking about ONE SINGLE STEP that will really make a difference - abolition of import duty. That shows that the intention of the Govt is that it wants to be seen as if its taking action.
Its no coincidence that all this talk is when Rahul Gandhi has criticized the govt over rising prices. Once the parliamentary session is over and a good monsoon cools down the food and pulses prices…then nobody will bother about sugar prices.
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Pulses are the main culprit for haaye tauba by media… opposition…
This year if monsoon remains to be good…pulses production will be at record level…and prices gonna crash…hope that happens and govt. Gets relief from inflation and media/opposition. From that side …so that they are not so aggresive to control sugar prices…
Sometimes i wonder pulses at 200/- kg for a year now…and last 15 days sugar crossed 40/- mark and govt is getting mad…hope they do not get hyper and tighten up everything…
But i also belive that when price rise is due to demand/supply…all this actions would not help govt…instead they will help hoarders as they will hoard more after such govt action…stamping the genuine shortage…
We all know govt has been talking …and done evrtything but pulses prices have not come down…
Same gonna happen here…
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The harder govt try …the more hoarders wil take the prices high…as such actions by govt tells the shortage is real…govt gets exposed at one side they say there are sufficient stock and on other side crushing season has even not started and they are starting their silly tools to control prices…
Isma 23.5mt production will be a joke…it wont even cross 21.5 mt for 2017…soon everh 2 months you will see downward forecast by them …
Prices will remain abobe 40/- kg at retail levels for 1 year minimum…
That will be good enough…from C.m.p. 2-3 /- more for a year will be great for sugar mill for record profits…
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Thanks a lot to all for the quick replies. I think Govt will allow import of Raw Sugar at reduced rate. I saw Pawar’s comments in ISMA convention.
@Mehnazfatima Yes one point really surprised in the article. Inventory of Mills were under Govt. control till 2013 and still Sugar had its peak and trough before 2013. Thanks for mentioning it.
Abhinash Varma of ISMA has made a point that to fulfill their previous debt obligations, sugar mlls need to sell sugar @36-37 rupees per kg whereas the realisation now is around 34 rupees…
If the govt is taking over the release mechanism for sugar, then it will also have to ensure adequate returns for the mills…i.e it should ensure higher price for mills.
Sugar mills getting 2-3 rupees more than the present price, is not such a bad thing for sugar mills / sugar stocks.
fasten your seat belt guys, looks like as stated by Many and specially our technical analyst @Mehnazfatima here , its time that next leg of Sugar rally has indeed started after a good consolidation and forming a good base !
I guess after yesterday statement by Sugar man himself Sharad pawar, many institutions and DII must have taken a note … will be interesting to see todays close of most sugar stocks and the delivery volumes which suggest some big pockets have entered today … added more to Dhampur and Balrampur today 
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I have added Balrampur Chini and the same is not moving with the same ferocity as which other sugar names are moving. Same was the case when I used to hold KCP sugar, so I moved out of it @25 to Balrampur @100 and since than KCP has doubled and Balrampur is languishing and before that KSP was languishing and Balrampur was running with full steam.
@mehnazfatima off topic but do you also follow other cyclicals like shipping stocks? If yes, could you comment on something like Shipping Corp? There is a thread on that and discussion can continue there.
HG 6470: Yeah I have some working knowledge about the shipping cycle…very good information is contained in the book Maritime Economics by Dr Martin stopford. The present downcycle in shipping industry is worst then the one that happened during the great worldwide depression of 1928…The down cycle is now almost 8 years long.
The Dry Baltic index fell from 11000 in 2008 to 640 in 2013…at that time I thought that it was the bottom and the index rose to around 1200…but with the fall in Chinese growth rate, recession in EU and japan and fall in OIL, coal, iron ore and other commodities…the Baltic dry index again fell to around 400 level…
just imagine the extent of the fall…11000 to 400…
The anticyclical activities of the shipping lines who continue to purchase new ships is delaying the recovery…as more ships are getting added than the old ones getting scrapped. Now the situation is so bad that a few months ago, there ware no ships sailing in the Atlantic…this had happened earlier during collapse of the Lehman brothers when the global banking sector was under threat…hence, no merchandise was getting traded.
you can get good info in the present state of the shipping industry from the website market realist.
Now I don’t have money to invest anymore, so I wont be able to invest in shipping.
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Thanks for the reply and the pointers. Yes, shipping seems to be really in the doldrums (pardon the pun). That is actually why I was looking at it. Do let us know when you decide to get into shipping
Well well well…as I suddenly remembered…at the bottom of the cycle, we should rely not on our emotions but on the technical…
Sci is very precariously poised…it can go up hugely or it can even go down…I think it all depends on Q1 result…
When is the result? market is yet to make up its mind …
I don’t know anything about the present fundamentals but I think the risk reward ratio favour the bulls…
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Dear Fatimaji I Dr NKArora have been reading your messages on
sugar for last 5 yrs .I have to tell you that these days demerger can
be completed in 6 months if nobody has any objections.Date for court covened meetings for triveni is on 3rd SEP .SO if everything goes well
record date would be in OCT.I am invested in TRIVENI & BALRAMPUR . Both have underperformed the sugar cycle for reasons not known to me.
I am from Shipping industry and i serve various listed companies for their export shipments. The situation is so bad that from the high of 2009, where the shipping rates were highest due to commodity boom and exports from India, the freight rates have fallen by more than 90%, in some case 99% or 100%. Shipping line is just charging local admin fee and port fee and carrying containers for free and recovering small fee from buyer by the way of admin charges at destination which is collected by the shipping agent at destination and re-imbursed to indian shipping agent.
The rate for Far East Ports, Middle East base port is 10 to 20 USD per TEU for base port.
Europe rate is 100 USD per TEU, USA is 250 to 300 USD per TEU.
Shipping goods to USA and Europe is cheaper than shipping it from Pune to Bombay.
The margin of Shipping agent has dropped from 25 to 50 $ to less than 5$ per TEU, hence many agents have suffered and close the shop.
Amit
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I am posting end of the week review of the price action of the three major sugar stocks…stock technical indicate that the said sugar stocks rally may continue for a few weeks atleast…Bye for now…will meet you guys again on monday.
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Please don’t post thread related to Shipping here. One off was fine. Thanks
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