Search the Internet          Tips  Sites: Finance, Investment

Sector Focus : Sugar

State of industry (2000-01)

Tariffs, prices and landed costs

	Tariffs				Prices (Jan 2001)				Landed costs (Rs/tonne)
	Customs2		Excise3		Dom- estic		Intnl		Pre- budget	Post budget
	2000-01	01-02	2000-01	01-02	(Rs/ton)		($/ton)
Imported sugar	60.0	60.0	-	-	-		251	1	21,840	21,840
Domestic sugar
- Levy sugar	-	-	520.0	520.0	-		-		-	-
- Free-sale sugar	-	-	850.0	850.0	15,090	4	-		-	-

1 Fob price.
2 Per cent.
3 In Rs per tonne, and includes a cess of Rs 140 per tonne levied under the Sugar Cess Act, 1982.
4 The domestic price is the wholesale price in the Mumbai market

Source: CRIS INFAC

• During the 2000-01 sugar season (October to September), demand for sugar is expected to increase by 3.2 per cent, in line with the historical growth rates.
• At present, the sugar inventory in the country is at 100 lakh tonnes. Production in the 2000-01 sugar season is expected to decline, as compared with that in 1999-2000, due to lower sugarcane production due to adverse weather conditions in Madhya Pradesh, Maharashtra and Gujarat and likely diversion of sugarcane to alternate sweeteners manufacturers.
• During the October-March 2000-01 period, domestic prices are expected to remain stable.
• Up to April 2001, international prices are expected to remain stable or could decline marginally, due to surplus supply of sugar from India and Thailand, in the international market. However, prices are expected to increase after April 2001.
• During the April-December 2000 period, margins of sugar producers increased marginally. However, margins are expected to remain stable in April-March 2000-01.

Budget impact

Impact factors

Company name	Impact	Impact factors
Bajaj Hindusthan	Pos	C
(86.55, 87.25)
Balrampur Chini	Pos	C
(101.85, 106.80)
Bannari Amman Sugar	Pos	C
(110.00, 118.75)
Dhampur Sugar	Pos	C
(86.55, 87.25)
Balrampur Chini	Pos	C
(101.85, 106.80)
Bannari Amman Sugar	Pos	C
(110.00, 118.75)
Dhampur Sugar	Pos	C
(16.05, 17.30)

Note:
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
pos= positive neg= negative neut= neutral.

Source: CRIS INFAC

A: The announced intention to decontrol the sugar sector is unlikely to have an impact on the industry, as the time frame for effecting the necessary regulatory changes is uncertain.

B: The increase in the PDS issue price, from Rs 13 to Rs 13.25 would not affect the sugar producers, as the levy price of sugar remains unchanged.

C: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers. The likely decline in interest rates is expected to benefit the sugar industry significantly, due to the relatively high working capital borrowings.

Rediff-CRISIL Budget Impact Analysis
Budget 2001

Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

Tell us what you think of this analysis