Sugar Annual Review November 2009
CRISIL Ltd.
December 1, 2009 128 Pages - SKU: CRSL2517280
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Deficit situation in the domestic market to continue over the next two sugar seasons leading to historic sugar imports
CRISIL Research expects the downturn in sugar production witnessed in 2008-09 Sugar Season (SS) to continue into the next two years (2009-10 SS and 2010-11 SS) as production is expected to be significantly lower than consumption leading to the possibility of historic sugar imports to meet domestic demand. This will be the first time in more than a decade that India will see imports for three years in a row (2008-09 SS to 2010-11 SS).Domestic sugar production witnessed a drastic decline in SS 2008-09 with total production falling to 15 million tonnes (from 26.4 million tonnes in SS 2007-08), which was significantly lower than the consumption levels of 23 million tonnes. This led to a huge deficit situation, which was partly offset through imports estimated at around 3 million tonnes and the rest through a draw down from the existing stocks. The decline in sugar production was mainly on account of a fall in the drawal rate (the amount of cane diverted for sugar production) and decline in the area under sugar cultivation. The steep fall in production resulted in a depletion of inventories and closing stock as months’ offtake declined from 4.5 months in SS 2007-08 to 1.8 months in SS 2008-09.
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- Sections
- Demand-supply tightness to continue in 2009-10 SS; to improve marginally in 2010-11 SS
- Executive summary
- 1.0 Domestic demand-supply outlook
- 2.0 Global demand-supply outlook
- 3.0 Prices & Profitability
- 4.0 Business model analysis
- 5.0 Ethanol-blending programme
- Boxes
- 1.0 Domestic demand-supply outlook
- 01 Sugarcane production stable in UP; highly volatile in Maharashtra
- 4.0 Business model analysis
- 01 Business Model - Incremental Profitability - Methodology
- Chart
- 4.0 Business model analysis
- 01 Business Models
- Figures
- 1.0 Domestic demand-supply outlook
- 01 Sugar - Demand-supply
- 2 State wise sugar production
- 2.0 Global demand-supply outlook
- 01 Global inventory levels and prices
- 2 Percentage diversion of sugarcane to sugar and ethanol in Brazil
- 3.0 Prices & Profitability
- 01 Domestic and international sugar prices
- 2 Raw sugar prices in USD and BRL
- 3 Appreciation of BRL against the USD
- 4 Open interest and net non commercial long positions in sugar
- 5 Net non commercial long positions and sugar prices
- Tables
- 1.0 Domestic demand-supply outlook
- 01 Demand - Supply
- 2 Sugar - Domestic consumption
- 2.0 Global demand-supply outlook
- 01 Global demand supply position
- 2 South America Demand-Supply Position
- 3.0 Prices & Profitability
- 01 Comparative sugar prices - Mumbai S-30
- 2 India - 2010-11: Sensitivity of Sugar Price vs. Sugar Production
- 3 Profitability of North Indian companies
- 4 Profitability of South Indian companies
- 5 Impact of levy price on profitability
- 4.0 Business model analysis
- 01 Integrated model has higher returns over the complete cycle
- 5.0 Ethanol-blending programme
- 01 Ethanol surplus/deficit situation from ‘C’ Molasses
- 2 Comparison of ethanol production under 'C' vs 'B' molasses route
- 3 Surplus/ (deficit) of ethanol under ‘B’ Molasses route
- 4 Ethanol prices at which 'C' molasses route and 'B' molasses route are equally profitable
- 5 Comparison of ethanol production via 'C' molasses vs direct route (cane to ethanol)
- 6 Ethanol prices at which 'C' molasses route and direct route are equally profitable A-29
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