It has been almost 8 weeks since I last shared some Market insights and a lot of water has flowed under the bridge in the meantime.
INDIAN CROP UPDATE
The Indian crop which was being talked down in Jan and Feb, looks like it will finally exceed 30 million MT with Maharashtra clocking in at about 10.7 million MT (70 mills still operating) and UP (75 mills still operating) too touching close to 11 million MT. This in itself does not have much of a bearing on the market as the final 0.5 million MT will be neither bullish or bearish on the overall sentiment.
WORLD MARKET
What has really changed in the past 8 weeks is the sentiment in the world market. From a bullish picture being painted on the back of decent destination demand and potential supply disruptions anticipated from Brazil to a situation now where demand is slow production and supply from Brazil seems to be smooth. This change in sentiment is reflected in the May/Jul (Raws) and May/August (Whites) spread which have moved from a Premium to flat or Discount. The weakness in Crude and the strength of the USD v/s the BRL & INR has only added to the bearish mood.
INDIAN EXPORTS
Indian exports continue at a fairly quick pace with total exports since Oct 2020 reaching 3.78 mln MT (including Raws supplied to the Coastal Refineries, but excluding exports from the Coastal Refineries). Out of this about 3.35 mln MT (2.25 mln MT Raws and 1.10 mln MT Whites) are under the MAEQ for the 2020-21 season. The exports of White sugar are slower than normal mainly due to the challenges faced in getting containers. One must thank Dr Amin Controllers Pvt. Ltd. not only for the Export Statistics, which have been quoted here, but also the role they have played in guiding the Indian Sugar Industry towards achieving International Standards of Quality and Packing.
THE PANDEMIC
With the daily number of new CORONA VIRUS Cases hitting an all time peak of about 160k+, certain State Govt.’s are contemplating the re-introduction of a complete Lockdown. While a couple of States have already announced Lockdowns in certain areas, others have clamped a night curfew. The big one that is anticipated is a complete Lockdown in the state of Maharashtra owing to about 60k+ cases coming from that State. In my personal opinion the Lockdown this time around will be more organized, in that Supply Chain disruption should be minimal since all the SOP’s have already been put in place and ambiguities regarding logistics have been clarified.
MOST IMPORTANT OF ALL, IF YOU QUALIFY FOR VACCINATION THEN PLEASE GET VACCINATED AND IF YOU HAVE BEEN VACCINATED PLEASE CONTINUE TO MAINTAIN ALL COVID PROTOCOLS. STAY WELL & STAY SAFE.
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Indian Sugar Industry Guru – Mr. Yatin Wadhwana is a strategic consultant and trader with over 35 years of experience. He is Director at Gradient Commercial Pvt. Ltd. which undertakes strategic trades, consultancy and advisory roles. Apart from sugar, he has also been involved in Supply Chain Management, Logistics and the trade of other agri-commodities including wheat, rice and soybean.
To get in touch with Mr.Yatin Wadhwana write on yatinwadhwana@gradient.biz
