Just a year after the global downturn derailed Dubai’s explosive growth, the city is now so swamped in debt that it’s asking for a six-month reprieve on paying its bills.
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24 Oct
Hello Friends, just an extension of our previous blog on Commodity Corner Series where we touched upon the aspects like seasonality,cyclic nature and analysis of price trend of Sugar.
Sweetness Of Sugar Part 2
Now we would read into the implication of falling production of sugar on stock market,market sentiment and the country’s import status.
Sugar Scrips Sweetens…
Falling production has sweetened sugar scrips.
Sugar stocks prices seems to remain strong for next three years.
The key drivers for such a strong up-cycle are:
1) Nominal production in current season as compared to consumption,
2) Lack of scope for further reduction in dealer stock level,
3) Increased cost of production as well as of import,
4) More sugar cane in India is being used to make jaggery that sells for almost double the price of white sugar.
In Diwali, sugar prices touched Rs. 35/ kg level.
This in turn helped all sugar companies to show growth as compared to current year’s net profit.
The most promising long positions and best return may be in sugar stocks like Shree Renuka Sugars and Balrampur Chini. Overall sugar stocks are bullish.
So take the best & calculated decision.
Imports Soaring……
For the 2009-10 crushing season (CS), the domestic and international price trends will depend on the production in Brazil, where producers should start favouring sugar over ethanol, as ethanol demand declines with falling crude prices.
With domestic consumption at 23 million tonnes for the next two years, & sugar consumption surpassing production, the country may import 3-4 million tonnes till September 2010.
The landed cost of imported sugar should be around Rs 19,000 a tonne. In the short term, the weaker USD will also support sugar.
The market seems to be in a set-up to move higher over the short run as India will continue to buy buying and the potential for imports will continue into 2009/2010 season.
……..Markets Bullish
Market sentiment has turned bullish, with the demand outlook boosted after the Indian government removed import duties.
A recovery in the world economy coupled with an increasing uptrend in these years leaves ahead sugar as a longer-term “buy and hold” commodity.
The factors that can determine the price direction for sugar futures in 2009 are:
1) If Dollar continues to rise in 2009, the upside potential for sugar could be limited,
2) Demand is a key factor for price direction,
3) A shift in acreage away from cane to crops like wheat, paddy and oilseeds as UP creating panic among farming community for Increase in cane payment arrears and delay in verdict on state advised price (SAP),
4) Mills are on the verge of early closure this season on limited availability of cane,
5) Government has come out with a policy to allow raw sugar imports to India,
6) Depreciating rupee and rising global prices, making sugar imports dearer & harden domestic sugar prices,
7) Greater diversion of cane towards the unorganized sector.
Concluding I would like to say that both the technical and fundamental outlook for the Sugar market appear to be bullish, but one is advised to trade with caution and stop losses.
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17 Sep
Due to the speedy buying by stockists in advance of the festival season, in the midst of the global rates climbing to an 18-month high of $ 1,018.15 an ounce, GOLD rose by Rs 250 to touch a new high of Rs 16,220 per 10 gram in the gold market.
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However, it is said that after the metal in London increased to an 18-month high, the buying action gathered momentum as stockists indulged in buying gold.
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While, the concern was that a global economic revival may strengthen inflation in the midst of a weak dollar, enhancing demand for the metal as an alternative investment.
On the other hand, gold in overseas markets advanced 10.60 dollar, or 1.1%, to 1,018.15 dollar an ounce whereas silver coins also touched a record high of Rs 31,800 per 100 pieces.
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Further, standard gold and ornaments spurted by Rs 250 each to Rs 16,220 and Rs 16,070 per 10 gram, respectively.
On the other side, sovereign increased by Rs 50 to Rs 12,950 per piece of 8 gram.
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Marketmen said the precious metal might see new peaks in the coming days once the festival and marriage season starts on September 19.
Current upsurge maybe purely out of reason of stockists buying as retailers refrained from buying gold during ‘Sharaadh’, the ongoing inauspicious fortnight in Hindu mythology.
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According to analysts, gold may climb a high level of $1,100 an ounce in the overseas market in the next six months.
Silver ready shot up by Rs 700 to Rs 26,600 per kg and weekly-based delivery by Rs 910 to Rs 27,570 per kg.
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Silver coins rose to an all-time high by gaining Rs 200 to Rs 31,700 for buying and Rs 31,800 for selling of 100 pieces.
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However in between due to the increasing investment demand with the commencement of festival and marriage season, gold imports observed a huge rise during August at 21.8 tonnes as compared to the previous month where the import of the precious metal was 7.8 tonnes this year.
This shows that India’s gold imports have trebled in a gap of one month.
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16 Sep
Indian stocks rose to a 15-month high yesterday. 🙂
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DLF Ltd led gains as investors judged recent declines as excessive. Mahindra & Mahindra Ltd climbed on a report it will make sports utility vehicles for overseas markets.
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DLF, the biggest real estate developer, jumped 5.5% after losing 10% in the previous five trading sessions.
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Mahindra & Mahindra, the largest sports utility vehicle maker, advanced 1.5%.
Sterlite Industries (India) Ltd, the No 1 copper producer, added 3.8% after metals prices climbed.
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The Bombay Stock Exchange’s Sensitive Index (Sensex), rose 240.26, or 1.5%, to 16,454.45, the highest since May 28, 2008.
The gauge declined 0.3% on Monday, snapping a six-day rally.
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“There is strong liquidity supporting the market,” Jagannadham Thunuguntla, the head of equities at SMC Capitals Ltd in New Delhi. “Yesterday’s fall has made some stocks attractive.”
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The rupee advanced against the US dollar as overseas investors added to holdings of the nation’s assets amid signs economic growth is quickening.
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The rupee climbed 0.2% to 48.655 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg.
The currency has risen 0.4% this month.
India’s $1.2tn economy expanded 6.1% in the three months to June from a year earlier, accelerating for the first time since 2007, the government said last month.
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