Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains!

(CommonMan) #1045

Volatility is very high right now.It can go a few points lower or jump back to higher levels. While prices are indicative of the short term uncertainties, long term numbers could be very different. Post June we will have a definitive number to work with.
Indian Domestic situation is enough to support us until q3 at the least.

(Mehnazfatima) #1046

keep a close watch on Sugar price in domestic market…There is a good probability of reversal in sugar price…which in turn will lead to the next leg of rally in sugar stocks…

(umang_1991) #1047

Dear Mehnaz,
Cant the government force the mill to not so sell beyond an X price, I mean they cant sell if they want to at X+1 but they can sell at X or X - 1. A kind of oral order, a soft signal, I meant this a poor people’s government and mill owners are seen looting the poor junta. No one will oppose this…

(Rajesh) #1048

Poor people’s government ? Mill owners are looting ?

(csteja) #1049

Sugar investors, @Mehnazfatima @CommonMan
Where do you track sugar prices live Indian and international for same quantity (kg or otherwise).
I have and
As the international sugar prices are getting lower, why don’t government allow imports which can lead to price fall locally as well ?

(CommonMan) #1050

I track the international prices here

Domestic price link is same as yours.

(CommonMan) #1051

Govt is tight rope walking between supporting the farmers and checking inflation. For a couple of years the mills sold below cost, to support politically high priced sugar cane. This lead to high debt levels. If mills are not allowed to make money, the cane arrears will come back next year, mills won’t pay the cane arrears . It will hit their vote bank.

Its in govt interests to keep the price in 39-42 range. But beyond a point market dyanamics will kick in. Price controls won’t work. There will be a big spike, then govt will allow imports. This would happen probably in spetember- November. The cheap international price which we see now would have changed by that time.

(Emh) #1052

Hi Mehnaz. I have been following & appreciating your great work on this board for the last few months, I am attaching the following graphs that indicate that the speculative interest in the internaitonal sugar contract is dramtically low. I wonder whether it confirms your current thesis that sugar price is likely at a turning point.

Second graph has sugar price and speculator and hedger share of open interest. First graph has breakup of speculator ,hedger and swap dealer open interest.

(Emh) #1053

Sorry, only posted second graph. Here is the first one for your perusal.

(Mehnazfatima) #1054

In depth technical analysis is not my forte. I like to keep things simple and just look at what the market is doing…on the basis of long term charts.

If we look at the monthly chart if sugar 11 contract (line chart), then we can very clearly see the formation of a head and shoulders topping pattern. The price is now trying to claw back to above the neckline.

If the price pulls back above the neckline, then according to the technical guru - Walter Deemer, nothing is as bullish as a failed head and shoulders pattern.

However, if the sugar 11 contract stays below the neckline, then the sugar rally is over for now.

Now have a look at the weekly chart, which brings out the price action near the neckline with much clarity

(Emh) #1055

Thanks for your reply. Normally one could get into serious trouble for closely watching necklines. Your chart is an important exception.

(csteja) #1056


Thanks for prompt response. shows May contract trading at Rs. 3780
Nasdaq futures contract is trading at $16.54 --> Rs. 1075

How do you get the disparity between Indian and international prices ?

(Pavas) #1057

Govt. allows duty free import of 0.5mt till June

(Saurabh) #1058

whats the source of this

(Pavas) #1059

(umang_1991) #1060

Imports are allowed and the thread is silent. No analysis … Any views now that imports are finally allowed. No great upward movement in international sugar prices though…

(mahi) #1061

Port restriction have been applied as to which port can import how much. Out of 5LT ,60% from south based ports.

All imports allowed till 12th June under Tariff Rate Quota aka TRQ, any idea what is this?

(mahi) #1062

I guess since this news is all unofficial , market is waiting for it to be offical and post which we could see the movement. But the question is when this same thing( imports were allowed) was done in 2008-2009 market crashed by 40%+… is hisory going to repeat itself??

How will the UP sugar mills react is what we will see may be tomorrow or when it becomes official.This unofficial news of imports came in around 11AM and since then UP sugar stock reacted very eratically except Renuka which jumped more than 3% in 5 minutes and maintained its climb.

(shrivaibhav) #1063

Please go through the below vids

The Industry was anyways expecting imports due to low sugar output , The prices will not come down drastically will be in same range as they are now , but may not go up as well.

In the intw Mr murkumbi mentioned that June,July,Aug would be deciding the future path.
He did sound positive about the North based sugar mills.

(Raj A A) #1064

Consequent to the decision of imports by GOI, global prices have hardened by 3.7%. Imported sugar will be Rs 34-35 per Kg at Ex port while doemstic suagar is sold @ Rs 37 a kg.