Date:06/06/2006 URL: http://www.thehindubusinessline.com/2006/06/06/stories/2006060603631500.htm

Back Sugar stocks set to ride upswing

Good news awaits the sugar sector. According to industry experts, between now and October next (new crop), sugar prices are likely to see a 10-per cent upside from the current levels of Rs 2,000 a quintal. Sugar sector stocks have witnessed across-the-board selling in line with the commodity meltdown. Most counters have seen a depreciation of 30-36 per cent month-on-month.

While the frontline stocks have garnered some support at the lower levels, the severely affected have been the `B' group stocks such as Dhampur Sugar, Sakthi Sugar, Mowana Sugar, and Simbhauli Sugar. Sources anticipate the upside in sugar prices to come about on the back of manifold increase in festival demand.

Market sources said this augurs well for the sugar industry. However, adding a cautious note, experts said that when the next crop condition crystallises, the upside could evaporate leading to a decline in prices to around Rs 1,800 a quintal around November 2006.

Additionally, Indian sugar prices are also expected to draw influence from international sugar prices due to increase in crude oil price and divergence of cane for ethanol.

Deeptha Rajkumar