Sugar Sector

itachi

Starting on a negative note here, as I never wanted to write about sugar sector as its my favourite sector for investment.
But looking at the condition and falling loading writing it, hope it won’t come to haunt me some day.

itachi

Just sharing what I was working on for Delhi Division. It will benefit Moradabad Division too and to a certain extent Ambala Division.

Avadh belt also is very important but work was too much and my focus was a on Delhi Division so I rejected some of the best sugar mills which are in Avadh Belt.

itachi

This is mainly for Delhi Division

itachi

These are the major Sugar Mills in Uttar Pradesh. Most will come under Delhi and Moradabad Division. But we must focus on Saharanpur too.

Other than NR, Avadh belt divisions will have a huge opportunity. If someone interested I will take out time and get it done.

itachi

The Sugar Sector has changed drastically and now at the inflection point. It is no more an agricultural commodity rather it will soon be and “Industrial Commodity”.

India and Brazil are two main countries in Sugar market

http://www.worldstopexports.com/sugar-exports-country/

Now the reason I said that sugar has changed the nature from agricultural to Industrial commodity is this:

https://www.investopedia.com/articles/investing/101615/5-countries-produce-most-sugar.asp

https://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil

http://siteresources.worldbank.org/INTAFRICA/Resources/Ethanol_Profile.pdf

https://www.nsenergybusiness.com/features/top-biofuel-production-countries/

itachi

Now above was the reason of shift in nature of sugar.

There are many other factors going on which are related to loading for railways and some factors which are very helpful for loading in NR & Awadh Belt.

I will write about them later.

There is one factor which will become apparent in few months or may be an year.

itachi

Bottom was done around 12.

itachi

This will be the Game Changer

https://in.reuters.com/article/india-sugar-exports/india-to-provide-subsidy-to-export-6-million-tonnes-sugar-in-2019-20-idINKCN1VI1MG

itachi

El Nino and Climate change will severly impact Sugarcane farming in Maharashtra region so their decline will be fulfilled by the Sugar mills in UP and Avadh Belt as they have water availability. Now if we analyse result of sugar companies we will be surprised how bad results they showed. But when we will dig deeper (sugar has to be analysed differently as many factors are there) then we should look at “INVENTORY” figures that’s where the game was done by the best mills, they just didn’t produced when Brazil was in boom and there was glut and leading to crash in prices they instead kept increasing the inventory while those players which were not smart kept on producing during those times. Now this inventory and the policy changes (domestic subsidy) as well as Global Change (from agri to industrial commodity) due to bio-fuels will lead to new dynamics