Financial Daily from THE HINDU group of publications
Wednesday, Dec 14, 2005
Financial Daily from THE HINDU group of publications Wednesday, Dec 14, 2005 |
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Stocks Markets - Stock Markets Agri-Biz & Commodities - Sugar Sugarcane price, global trend push sugar stocks to a high R. Balaji
Chennai , Dec. 13. INTERNATIONAL developments and lower than expected sugarcane prices in the domestic markets are among the reasons contributing to the continued buoyancy in sugar company stocks. Sugar stocks gained 10 - 20 per cent today. Bajaj Hindustan gained around 20 per cent at Rs 283.25 against the previous day's close of Rs 237.40, Balrampur Chini 7.8 per cent at Rs 105.25 (Rs 97.65), Rajshree Sugars 5.58 per cent at Rs 81.4 (Rs 77.10), Bannari Ammai Sugars 5.6 per cent at Rs 964.3 (Rs 913.35) and Thiru Arooran Sugars 5.8 per cent at Rs 161 (Rs 152.15). KCP Sugar and Industries Corporation closed with a gain of 9.11 per cent at Rs 447.95 (Rs 410.55) on the NSE. Sugar companies are also looking at attracting investors by going in for a stock split to address liquidity concerns. According to officials at the KCP Sugars, their board will consider a stock split on Saturday. It may be recalled that sugar majors Balrampur Chini and Bajaj Hindustan have already split their stocks (to Re 1 face value). Sugar mills are buoyant as sugar prices rule high and sugarcane prices are at realistic levels. In Uttar Pradesh, the State known for high sugarcane prices, it has been fixed at flat rate of Rs 1,150 a tonne for the current season; Rs 950 in Maharashtra; Rs 935 in Andhra Pradesh; and Rs 1,075 in Tamil Nadu. Sugar prices are also buoyant at about Rs 16,500-17,500 in the North and about 10 per cent lower in Tamil Nadu. Export hopes: Prospects for export are also on the increase with international prices on the upswing. Brazil, a leading exporter, continues to divert its sugarcane production to ethanol rather than sugar because of high oil prices. Exports are also expected to drop from Europe due to a proposed drop in export subsidies, and from Thailand, which is hit by a drought. International sugar prices are ruling around $350 a tonne, which is good news for sugar mills that are facing export obligations following the import of raw sugar during the previous season. In the domestic market, while sugar production estimates range around 180 lakh tonnes supply is going to be tight and shore up prices. Regional differences could have an impact. For instance, initially, in Tamil Nadu where sugar production is estimated at about 18 lakh tonnes, recovery is expected to be lower due to extensive flooding and water logging. Sugar mills have observed a 0.5 - 0.75 per cent drop in recovery, say sugar mills sources. The exact production estimates and stock estimates would be available in February next when some stability in sugar prices may be expected. Till then sentiments could drive up the markets, they said.
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