Sugar prices down due to piling stocks
Sugar Mills, mostly in Maharashtra and south, have not been able to sell their sugar stocks of their last year produce. This has pushed the sugar prices downwards. As per the data of Central Excise department as on 30th September 2006 Maharashtra was holding 18 lakh tonnes, Karnataka 5.17 lakh tonnes, Tamil Nadu 6 lakh tonnes and Gujrat was holding 1.7 Lakh tonnes. The total sugar production in India was 192.62 lakh tonnes last year and as on 30th September 2006 it was holding 39.65 lakh tonnes of sugar. North Indian states like Uttar Pradesh, Haryana, Punjab and Bihar are holding relatively lesser stocks. Further more, the Government has imposed a ban on export of sugar, leading to the surging of stocks. The ban is likely to be lifted in wake of the demand from sugar companies and increasing stocks of sugar. The sugar companies are witnessing high margin pressures as the prices of sugar are coming down. Almost all sugar company stocks like Balrampur Chini, Dhampur Sugar, Bajaj Hindustan, Mawana Sugar, Uttam sugar, etc. are under performing. They are hovering around their yearly lows. Lifting of ban on Indian sugar export will impact Thailand, a major sugar exporter of Asia as Indian sugar prices pose stiff competition to Thai exporters and the major buyer Indonesia is expected to unveil its year 2007 import quotas till the end of December 2006.