Sugar... rare +ive outlook

A lot of people don't realize it, but Brazil uses all sugar-based ethanol to run their vehicles. This makes them less reliant on the Middle East unlike us here in the United States. In 2010, Brazilian distributors are expected to sell more ethanol than gasoline, the Gazeta Mercantil newspaper said. The popularity of flex-fuel cars in the country will help ethanol sales over reach gasoline sales.
Fundamentally, we still currently have excess supplies. This is part of the reason why we've had this downward trend over the last couple years. However, any supply problems going forward from here gives the market really potential to move up. On Thursday, September 27, ICE/NYBOT sugar #11 March futures traded near 10.19 cents a pound. This market has been as high as 19 cents back in January, 2006.
If you look at the chart below, I think this is a huge bottom. We have broken the trend line. I would be accumulating sugar long term. In my opinion, the true economic value of sugar is between 14-15 cents. Over the next year, I'm looking for sugar to possibly double. I don't think we can go much lower than 8.37 cents so I would suggest placing your stop near that area if you are looking long term in this commodity.

Water as Commodity

I personally feel that like oil, water will also become scare and will be treated and traded as commodity in coming future. Being a freely available or rather publicly we have never realised its real value. Next few days I want to dedicate some time to study this topic and suggestion, comments are feedback are welcomed with open arms.... those who agree and don't agree, please feel free to write...

back to those speculative times...

Its month end and all satorias are gearing up for a week full of news/ rumours/ statements etc for coming month's Quota. October... the beginning of new season is starting with depressed mindset of millers & farmers and consumers are rejoicing... lets play out some number game :
2006-2007
Opening Stock: 4 mmt
Production: 28.5 mmt
Consumption: 20 mmt
Export: 2 mmt
Buffer: 5 mmt (just on papers as physical sugar still with mills)
Ending stock: 5.5 mmt (actually 10.5 mmt)

2007-2008
Opening Stock: 10.5 mmt
Production: 32 mmt
Consumption: 21 mmt
Export: 4 mmt (Including Raw sugar)
Buffer: Zero as of now
Ending stock: 17.5 mmt

If we go purely on nos. than we are talking about an ending stock of almost a year's requirement. Well this may be an inflated no. and and even if we assume that only 60% of sugar actually is available, still that no. turns out to be very high @ 10.5 mmt.

Where will this all sugar go... well today no one has answer for that, so in short next season gonna be an depressing year for millers and farmers and consumer will command the price.

Let all speculators and millers have the final laugh (expected price increase during October month) before sugarcane starts knocking on mill's doors.

rush to crush ... finally starts.....

Nearly 41 co-operative sugar mills in the MH state have indicated they will start crushing sugarcane from the first week of October. They will be followed by another 46 in the second week so that by October 15, over 90 factories in the state will be operational. The state expects a second consecutive record breaking year, with sugarcane production expected to be 840 lakh tonnes, giving sugar production of 95-98 lakh tonnes. Indications are that yield projections for Marathwada will have to be scaled back by 10% due to a prolonged dry spell in the region. The first to start crushing operations will be mills in western Maharashtra, followed by those in Marathwada.

We'll have to wait n watch when other states start to crush..... UP should start soon followed by Karnataka, Gujarat and then AP & TN.

when politicians turn speculators.....

last 48 hours have been very amazing for the sugar industry... sugar co. stocks moved up by whooping 20%+ yesterday. few mills closed their sales, banking on expected bull run in sugar prices. NCDEX September expiry saw amazing swings....suddenly physical market started to climb especially in Delhi. Suddenly sentiments turned and everyone forgot huge inventories & bumper crop knocking the mill's doors.

the man who drives this is the man we all know as "the great gambler" from cricket to food & agriculture... he's the man who controls players, farmers, traders, sugar and to some extent Global wheat prices now.

How immature of our sugar industry to fall in the vicious loop of political interest and industry dynamics. I'm reiterating that its time that we need to relook into ourselves and must set our own rules on how an industry move forward and not letting politicians decide what & when we should we buy and sell.

Oil since our Aazaadi

this one is interesting.... I got this on net somewhere... since our independence how OIL has moved till date... today it crossed $80 mark and there are good chances that it may well go on to touch $100 this time.... what this means to importers like us and where our petrol bills gonna go. and not to forget the Ethanol story... will it have any impact on ethanol usage and prices.. which may in turn spur prices of Brazilian sugar and US corn.... lets wait n watch.....

Kharif crop acreage-----

Kharif crop acreage up.... esp for Pulses, oilseeds & Sugarcane...

Pulses prices likely to remain subdued with good crop in India and regular flow from exporting countries like Canada. India's output for oilseeds esp Soybean looks promising but international market looks tight.

Sugarcane crop in India & Brazil looks very promising and as expected will come up with huge sugar production.

Govt. eyes wheat output of 75.5MMT

Well I wonder with such good production figures why someone would think of importing @$400!!!!!!

The government set a target Friday of producing 75.5-million metric tonnes of wheat in 2008, compared with an actual output of 74.89-million tonnes a year-earlier. Planting of wheat will begin next month for harvest from mid-February onwards. The rice output target for 2007-08 crop year that began in July has been fixed at 93-million tonnes. The total foodgrains output target has been fixed at 221.50-million tonnes, based on the current crop plantings, moisture in the soil, level of water table and availability of fertilizers. The target for oilseeds production has been fixed at 29.99-million tonnes.

Sugar market 15 sep 07

Sugar market still holding on to its small spikes...
West UP mills quoting @ Rs. 13.90 to 14.20 ex-mill where as East & Central UP is quoting 13.50 to 13.70. West and south markets are quite and with South averaging about Rs. 12.

NCDEX Expiry is nearing and no good quality sugar available for deliveries, which may result in some positive run in Sep & Oct contracts. Any spike in Dec/ Jan/ Feb 2008 contract is an opportunity to sell.

Kharif season sowing up....

Kharif season plantings of all major crops is higher on the year though rice is facing stress because of deficient rains in northwest region, latest government data showed Friday. One-third of the 36 weather districts of the country received deficient rains in the week to Wednesday. According to the data,
plantings of rice as of Sept. 14 were estimated at 35.57-million hectares as against 35.51-million a year-earlier. Planting of oilseeds are estimated at 17.30-million hectares as against 16.17-million hectares a year-earlier.
The data also showed corn has been planted in 7.61-million hectares during May 1 to September, up from 7.17M ha planted during the same period last year. Pulses, has been sown in 12.12-million hectares of land, up from 11.03-million ha a year-earlier. Among oilseeds, soybean, the largest grown oilseed in India during the summer planting season has been sown in around 8.74-million hectares of land, up from 8.09-million ha a year-earlier. Groundnut has been sown in 5.32-million hectares, as against 4.72M ha a year-earlier. Cotton was planted in 9.06-million hectares, up from 8.68-million ha a year-earlier.