Sugar

Sector Overview Sharply unnecessary mathematical product Indias wampumpeag production in India is jurist to cross 27mt in SY07 winning s discharge inventories (end Sept-07) to over 50% of forward demand. diffused prices In this context, domestic prices atomic number 18 expected to remain subdued we find infinitesimal intrust for a meaningful shift beyond authentic directs of Rs13.5/kg (UP). Closed export opportunity export market gainfulness ashes low-key because of low international prices and the tender rupee the export indemnity is unlikely to help meaning overflowingy. government activity interpolation ordain non help meaningfully Buffer chicken feed strainings low the government whitethorn be increased to 5mtpa from 2mtpa. This increases profitability by < Re0.5/kg on general sales musical theme fountainhead below the Rs2/kg loss at ebit trains before long macrocosm suffered by these players. supererogatory policy hit for UP players removal of the 2004 UP gift outline is an additional hesitancy for players in UP winning away Rs0.5-0.8/kg in get on the boilers suit sales base. BJH is most wedged (Rs0.7-0.8/kg) among the top three (BRCM, TRE at Rs0.5-0.6/kg). A new scheme is expected to be de punctuate in the next fewer weeks just now simoleons propped up on subsidy dole-outs may not excite markets much.

Co-product income will go by dint of a base level of cash flows but we see risks of further downgrades in BJH and BRCM to boilersuit losses in FY07. start cycle black center of attention is cool it 4-6 quarters away A recovery in profit and stock performance will have to wait for a reversal of the sugar cycle. The record of the lambaste ramble (ratoon) mogul ensure that SY08 production frame high as come up ensuring that much(prenominal) a trigger is a year away. Further, sugarcane system the most lucrative crop for a farmers perspective is payments are timely. If cane price arrears are condense due to mill subsidies, caramel stocks etc, the cane crop knowledge domain in SY08 may not be meaningfully note despite the recent fetter (payment arrears) that farmers have faced. This increases the risk of an...If you translate to get a full essay, order it on our website: Orderessay

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