About The Sugar Price FluctuationsThough the whole market has been going up, sugar stocks are on a rise for the last over two weeks. This is mainly due to commodity prices having moved to Rs.25 per kg., ex-mill in U.P. and at Rs.24 per kg. in other parts of the country. Prices in retail has risen to over Rs.27 per kg.
Inspite of the fact that first phase of general election has commenced today and would end on 13th May, in its fifth and last phase. Maybe, by then, prices may go up by another one rupee per kg.
Inspite of this, some people have the apprehensions of this being a politically sensitive commodity or not much sugar stocks available in the market. To answer both these, if global and Indian production of sugar is low, how any government can really control it? People need sugar to eat and its production can’t get increased by policies or merely by setting up the sugar mills. One needs sugarcane which takes 10 - 12 months to grow. Secondly, there are over 35 listed stocks available for investment and trading, of which 4 are in F&O segment. Since all these companies having produced sugar, will gain and would get reflected in the share prices. The companies are even making a profit of Rs.5 per kg.on sugar produced, from bagasse and molasses (by-products) which is enough to cover the cost of production from sugarcane to sugar, estimated at Rs.5 per Kg.
About The Sugar Sector Stock
Sweetness of sugar stocks will keep rising for next 6-8 quarters and those taking a time call on these stocks will gain.