Sugar recovery is the most important metric in the industry. pl refer to earlier post. While sugar recovery across mills/ regions will increase/decrease due to rain, disease, etc but for the country it depends on the overall climate of the country and any shift in country level recovery is difficult. even within India Maharashtra has better recovery than UP due to more suitable climatic conditions.
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Govt is continuing with the ban on exports
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Thanks.
" Govt allows sugar mills and distilleries to make rectified spirits and ENA from juice and B-heavy molasses".
In my opinion , it should be good for sugar stocks. Now, sugar companies can cater to different industries and different applications where rectified spirits and ENA is used.
Any views, pls
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Good work, Aadhar. A similar kind of worksheet can be prepared to track the companies that i am holding.
Few points add before jump on Export part:
- Availability of Sugar for domestic market: Available till Jan / Feb 2025, No issue
2.The mills will start at MH and Kar in somewhere ~ Oct end / Nov first half and UP ~ Nov / Dec 2024
3.The mills want to increase MSP 4000 to support farmers (watch this number carefully)
- Export : Should be open and support to the industries
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DATE : 19/09/24 THURSDAY.
M A T SONS, CHENNAI.
YESTERDAY NIGHT INTERNATIONAL MARKET CLOSING RATES ARE AS FOLLOW.
LIFFE REFINED SUGAR (LONDON)
DEC 24 : 555.50 + 19.80
MAR 25 : 557.90 + 23.50
MAY 25 : 552.50 + 21.20
ICE RAW SUGAR (NEWYORK)
OCT 24 : 21.16 + 1.18
MAR 25 : 21.55 + 1.18
MAY 25 : 20.26 + 0.80
DATE : 20/09/24 FRIDAY.
M A T SONS, CHENNAI.
YESTERDAY NIGHT INTERNATIONAL MARKET CLOSING RATES ARE AS FOLLOW.
LIFFE REFINED SUGAR (LONDON)
DEC 24 : 568.60 + 13.10
MAR 25 : 570.80 + 12.90
MAY 25 : 564.40 + 11.90
ICE RAW SUGAR (NEWYORK)
OCT 24 : 21.93 + 0.77
MAR 25 : 22.04 + 0.49
MAY 25 : 20.74 + 0.48
See the difference on daily basis!!!
International prices do not matter as no export / imports can happen.
Neverthess, domestic sugar prices will shoot up next month due to good demand and diversion towards ethanol. all dual fuel mills of sugar companies will switch to cane juice as maize/ rice prices are high.
huge grain based distillery capacity has been added which will keep maize/ rice prices high. Govt may be announcing subsidied rice/ maize… otherwise the industry is going into problem. International maize / corn prices are very low… imports?
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Which companies, do you think, fall within this category?
Why it is important:
- Either foreign demand is more at the time of winter and some mismatch on demand and supply
or major issue in sugarcane crop at Brazil (largest sugar cane producers) - This is lucrative proposition for Indian exporter
Domestic sugar price 3600-3700 per qual
Now export market price 4600-4700 per qual
Wait and watch on the situation and take the call.
Largest beneficiaries are UP based sugar companies like Triveni, Uttam, Balarampur etc.
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Sugar prices Friday extended this week’s parabolic rally, with NY sugar posting a 6-3/4 month high and London sugar posting a 2-1/2 month high. Sugar prices are soaring as drought conditions in Brazil threaten its sugarcane crops. Gains in sugar accelerated Friday after Rabobank cut its 2024/25 Brazil sugar production forecast to 39.3 MMT from a previous forecast of 40.3 MMT.
Fund buying supported sugar prices this week after meteorologist Climatempo said hot and dry conditions will persist in Brazil’s sugar-producing areas until next week. Drought and excessive heat have caused massive fires in Brazil that have damaged sugar crops in Brazil’s top sugar-producing state of Sao Paulo. Sugar cane industry group Orplana said that as many as 2,000 fire outbreaks affected up to 80,000 hectares of planted sugarcane in Sao Paulo. Green Pool Commodity Specialists said that as much as 5 MMT of sugar cane may have been lost due to the fires.
In the Thailand that may damage the country’s sugarcane crops is bullish for sugar prices. On May 6, Thailand’s Meteorological Department said that more than three dozen of Thailand’s 77 provinces posted record-high temperatures in April, with new highs beating records as far back as 1958. Sugar millers in Thailand are reporting the lowest yield from crushed cane this year in at least 13 years. However, Thailand’s government on April 22 estimated that Thailand’s 2023/24 sugar production from Dec-Apr 17 was 8.77 MMT, above a Feb estimate from the Thai Sugar Millers Corp for sugar production of 7.5 MMT. Thailand is the world’s third-largest sugar producer and the second-largest sugar exporter.
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all sugar companies have to hold stocks. and they mention the inventory price per kg… that reflects the cost of the company. (of previous season)
Govt mulling increasing ethanol price, sugar MSP: Food Minister Pralhad Joshi
New Delhi, Sep 26 (PTI) The government is considering increasing the ethanol price for 2024-25 season as well as minimum selling price of sugar, Food Minister Pralhad Joshi said on Thursday.Joshi said the proposal on hiking the ethanol price is under consideration of the government. The petroleum ministry is looking into the matter.
Speaking to reporters on the sidelines of an event here, the minister also mentioned that the government is “considering a proposal to increase the minimum selling price of sugar”, which remains unchanged at Rs 31 per kg, a rate established in February 2019.He also said the sugar production looks good for the 2024-25 season (October-September) on account of good monsoon.
Ethanol prices, fixed by the government, have not been hiked since the 2022-23 ethanol supply year (November-October).Currently, ethanol produced from cane juice is priced at Rs 65.61/litre, while rates for ethanol from B-Heavy and C-Heavy molasses stand at Rs 60.73/litre and Rs 56.28/litre, respectively.
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any idea when is the announcement of ethanol price increase expected…
Triveni has put their ethanol expansion on hold… margins are low as cane price is high and ethanol price low. Dhampur Bio had already put the new plant on hold last year.
i think any company going for ethanol expansion is going to get into trouble… whether is it is cane based or grain based… companies which have added capacity in last one year will see fall in profits.
it is better to focus on improving efficiency (if possible) to increase margins.
Today’s International price (Dec 24): $ 566.70 ~ Rs 47500/-
Three Factors to be tick
- Current MSP ~ 31000 and industry demand of ~ 36000 - 40000
- Ethanol price revision from Rs 65.71 to 70+
- Export quote
There is some disparity on MH mill price and UP mill price ~ 4/- per kg
and season will start @ Nov’2024
Usually in Nov or Dec.
Every year the ministry calculates OMC ethanol price for each input (C-Heavy, B-Heavy, juice) based on both input FRP & prevailing sugar price based on loss.
Last year they artificially inflated C-Heavy ethanol price (and others were low) to “discourage” ethanol diversion.
Since no-limit ethanol diversion has been announced this year hopefully OMC prices will be normalized.
Maybe days of sugar mills’ ethanol expansion are over, unless crop acreage/yields increase dramatically to crush high volumes consistently year over year. They learnt a bitter lesson last year.
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Fully agree… new ethanol plants will not come up for at least a few years.
Cane production is limited and cane prices are high - neither a volume nor margin play.
any company going for expansion - shares should be sold as they are sure shot into problems…
Grain based distilleries are praying for maize prices to come down… which is highly unlikely given so much capacity has been added for grain distilleries…
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Q2 results of sugar companies will again be muted due to low ethanol sales and high sugar stocks.
Q3 onwards the performance will jump - as both ethanol sales will be back to normal and sugar stocks will be liquidated.
However, share price could come down due to bad Q2 results and that is the time to accumulate…
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a fund has bought in Dhampur Bio. seems finally institutions are buying.
23 Sep 2024
Augmenta Value Trust - Scheme 1 BUY 5,00,000 155
Falling maize prices augurs well.
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Augmenta value trust generally invested in the Microcap and Small cap kind of the companies!!
Important Sugar and Ethanol thesis will be work out.
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Lots of delivery based buying in Dhampur Bio.
all other sugar companies also not falling… it seems bad Q2 has already been factored in. Mkt is expecting hike in ethanol prices…
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