@Aarti Is it fair to consider replacement cost of 1000 TCD capacity to be around 5crore rupees, and can replacement cost be a fair metric to value these?
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with increase in ethanol price likely to be announced as crude has reached USD and exchange rate crossed 86 ethanol can go up by Rs. 5 per litre. ethanol will also save forex.
also increase in MSP for sugar expected shortly. sugar sector should bounce back from here.
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UP may increase SAP and the yields are expected to be less. It is going to be volatile for some ore time. Disclosre: invested in sgar stocks. Views Biased
Just some raw data, which could be of some use.
Read ānumber of sugar factoriesā column as āplace of operationā
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sugar companies should stop supplying ethanolā¦ at these prices it is better to make sugarā¦
in fact sugar prices will go up 5 to 10%.
Did you conclude on this? Below suggests ~16Cr. per 1000 TCD when Land is already in place:
~20 Cr. per 1000TCD. Refer Page-36:
https://environmentclearance.nic.in/DownloadPfdFile.aspx?FileName=i8v/vaxDffNRSoYzTiHIvH+4TrHJKqCHErh/DZas2jtovz8xVY9ynHqdvsiDtXk2fVL0k1+1/Wy3vDLzRnY6FQ==&FilePath=93ZZBm8LWEXfg+HAlQix2fE2t8z/pgnoBhDlYdZCxzWF1OLE6RXe5MiAhSH8vdQ1
~21 Cr. per 1000TCD. Refer Page-19:
https://environmentclearance.nic.in/DownloadPfdFile.aspx?FileName=GmgdVCs2yw/3MPMslEO0YoJBCtQbaiM1BjWzpDiYoRg5wJau877vghyaESZsMF0I3HMo48fJhh4FgZXeA2LH08QrqwCK51cUGDwf56h8Vhs=&FilePath=93ZZBm8LWEXfg+HAlQix2fE2t8z/pgnoBhDlYdZCxzUlDadBGu7t8v4JoQvNU6UBlSmL0YQ7WQYaxkvlQvexKQ==
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When the ethanol procurement price is more than 1.6 times the price of sugar, it makes economic sense for sugar mills to maximize ethanol production. This was nicely explained by Mr. Narendra Murkumbi, Ex-Co founder of Shri Renuka Sugars in one of the Youtube channels. The current ethanol procurement price is Rs.65.61 and hence till the sugar price reach Rs. 41 it is more beneficial to rpoduce ethanol. The link to the channel is https://www.youtube.com/watch?v=UMjHWi5uaUY. Disclosure: Invested in sugar stocks. Views Biased
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Mill prices in UP have reached 40/kg. so it is almost reaching parity. but will they be allowed to supply less than quantity contracted? first govt cuts the ethanol allotment of private sugar mills - now they could be forced to increase beyond contracted quantity.
it is always lose-lose for private millsā¦ thats why i have always been saying that any mill expanding any capacity you should exit.
only those mills focuing on sugar recovery and mill efficiency are worth investingā¦ and those getting into new products ENA/ IMFL/ CL / Chemicals/ Bio plastics.
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