Sugar Industry Insights (Feb 25, 2020)
Last few years sugar industry has been a beneficiary of government largesse. Sugar cycle turned in 2015. Post that there has been surplus production.

Government has helped the industry by various incentives like export subsidy, ethanol blending, allowing cane juice to ethanol conversion, msp, etc. UP and Maharashtra are the 2 major states in sugarcane plantations.

The 2 largest players in the world are Brazil and India. In Brazil sugarcane is used for ethanol a lot lot more than in India. Brazil is way ahead of any country in ethanol from cane.

US is the largest producer of ethanol in the world followed by Brazil. US uses mainly corn for making ethanol.

Indian sugar scenario: Sugar still constitutes 85% of revenue in sugar companies. So, essentially it has to do well for sugar companies to be profitable. We have had record production in last couple of years. Sugar opening stock at end of last sugar year was 14.5 mt.

Brazil June Sugarcane crushing down 22% YoY to 29.6 MT #justinfo

@sidd1307 I've learned over the last few months that Brazil is to agri, what Saudi is to oil. Some agri product price went up - guess what, Brazil has a drought.

Among all the risks, regulatory risk hits with no warning
https://t.co/oOb1FMg35e

This is not new and will occur again. Gets amplified if the owner and regulator are the same

If you do invest, do it with proper risk management

From the same post

Did You Know: Balrampur Chini

Next 2 years capacity = 2 x capacity done in last 35 years of cos existence

ethanol capacity until Jan 2020: 360 KLPD
ethanol capacity expected Nov 2022: 1050 KLPD

#JustSaying with facts

@varinder_bansal Brazil sugar production down by 14% because of severe drought.India is the 2nd largest sugar producer followed by Brazil.
So a little postive news for sugar Comapnies based in India

Takeaway from the Q4 results #shreerenuka
1. Company has incurred losses on Q4 due to an exceptional item.
2. Cash from operating activities is negative.
3.Revenue from operations for this Q4 is down on QoQ basis
4. Company has incurred losses in year due to some exceptionalitem

Some positive news-
1.Revenue for operations from its ethanol segment has increased.
2.They will benefited from government scheme of MAEQ as Brazil production is down by 14%.
3.They will also receive incentives for ethanol blending so they have proposed to increase the capacity

From 720KLPD to 1400KLPD.
Government has a target of ethanol blending to 20% by 2025 against a current blending of 7.79%.So demand will be more and they will also incentives.
Company has raised around $300 million through ECB from its promoters.
So we can see a turnaround

Remember they are backed by a giant promoter and the capacity to 1400KLPD has been approved.#sugarind #shreerenuka @sanjiv_bhasin @varinder_bansal

Sugar stocks are a natural hedge against daru.

As ethanol blending increases, ENA prices will go up as so will the cost of your daru 😂😂

Phir bolna nahin ki bataya nahin

@Vivek_Investor @varinder_bansal I think this sector will boom . Many oil psu has built tankers to store ethanol .Plus internationally sugar supply is affected due to brazil frost, in International market ethanol price will go up and force brazil to make more ethanol which will decrease sugar supply.

@varinder_bansal Now this depends on which type of process (c/b/juice) is used for ethanol production but eventually making ethanol will be big play so sugar will be sacrificed. And sugar stock is decreasing due to this. Now while ethanol can be made from other grains as well .

@varinder_bansal Those grains like wheat rice will also play an important role here. But major player will be sugar and mah/upmost benefited from this being highest producer.but this vehicle water issues might give a pause to party but that’s temporary not permanent.

@InvestingHike @Willwin7 @varinder_bansal Yes everything will exist. Govt target to reduce important so doing everything in that direction Only including flex fuel.

Comparison of non-sugar (grain/ rice) based ethanol players in India...JUST FYI....NO RECO

Thoughts welcome

#excelgiri

Similar to the other commodities, Sugar has been in the consolidation phase since May 2021. However, in yesterday's trading session, Sugar seems to have broken out from ...
https://t.co/EhTNIiEg0a
#sugar #stocks #commodity #trading #Futures

@unseenvalue Bigger the KLPD the better 😝

Also better D/E with great capacity is icing on the cake

#SUGAR

Shared this update on sugar stocks in Feb on telegram.

Some of them have moved a bit but this is just the beginning.

Way sugar is setting up, it can very well replicate pharma rally of 2020.

However, looks extended on smaller tf. Will wait here for some retracement.

@soicfinance Pat Dorsey as well. On mistaken moats:-