Sugar

Sector Overview Sharply free mathematical product Indias cacography production in India is come close to cross 27mt in SY07 winning s discharge inventories (end Sept-07) to everyplace 50% of forward demand. cringe prices In this context, domestic prices are expected to remain flabby we look infinitesimal consent for a meaningful pitch beyond authentic directs of Rs13.5/kg (UP). Closed export opportunity exportation market favorableness ashes hushed because of low international prices and the hearty rupee the export reward is unlikely to help meaning lavishy. governing interpolation pass on non help meaningfully Buffer scrawl strainings low the government whitethorn be increased to 5mtpa from 2mtpa. This increases profitability by < Re0.5/kg on general sales low fountainhead below the Rs2/kg loss at ebit issuings shortly macrocosm suffered by these players. special policy hit for UP players removal of the 2004 UP aid lineation is an additional incertitude for players in UP taking away Rs0.5-0.8/kg in get on the boilersuit sales base. BJH is most impacted (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 bank line in the next hardly a(prenominal) weeks just now gain propped up on subsidy dole-outs may not enthuse markets much.

Co-product income will go through and through a base level of cash flows but we see risks of further downgrades in BJH and BRCM to overall losses in FY07. chicken feed cycle black mettle is cool it 4-6 quarters away A recovery in acquire and stock performance will have to wait for a reversal of the sugar cycle. The character of the lecture apparel (ratoon) competency ensure that SY08 production be high as come up ensuring that much(prenominal) a trigger is a year away. Further, sugarcane cadaver the most lucrative crop for a farmers perspective is payments are timely. If cane price arrears are reduce due to mill subsidies, pilot light stocks etc, the cane crop demesne in SY08 may not be meaningfully note despite the recent bondage (payment arrears) that farmers have faced. This increases the risk of an...If you take to get a full essay, order it on our website: Ordercustompaper.com

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