There are reports that next year its going to be La Nina…excess rainfall in India …drought in Brazil
This shortfall in sugar production has been expertly dealt with by the Modi govt in a win win manner…farmers are happy, mills and consumers are not complaining…and a by product of all this will be a clean sweep in the upcoming election in the sugar belt…i have held that those betting on upcycle in sugar sector are basically betting on bungling of the sugar sector by Modi govt…the govt has again won.
Next year…if there is excess production, then india will first build a buffer stock…then use the excess production to export and for ethanol production
It may take quite a few years for the sugar sector to become bullish again…till then lets try not to get trapped here…
Guys …pl dont try to fight the market…dont get stuck in sugar stocks for next few years by over analysing…do remember investing in cyclicals is a game of momentum…the long term charts of frontline sugar stocks are clearly signalling an exit.
If you really want to play cyclicals…have a look at HEG / Graphite India…SAIL…THIRUMALAI…ETC
Good bye
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