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Sugar stocks fall on declining prices

March 17, 2010

INDIA-SUGAR

Shares of sugar manufacturers, pressured by weak prices, registered a fall of 1-3 percent on Wednesday.

A newspaper reported on its website that sugar prices have declined 22 percent since January and this would not only hurt margins but also the growth prospects.

“Any further fall from the current stockist price of rupees 31/kg will result in losses for the mills,” the website quoted an analyst with brokerage firm Kotak Commodities Services as saying.

Prominent among the losers were Shree Renuka Sugar which fell over 3 percent, Balrampur Chini, which was down 3.1 percent, and Bajaj Hindustan which dropped nearly 1 percent.

Indian millers are facing the prospect of lower margins in the coming quarters as the recent steep fall in prices has saddled them with cane bought at the height of the price boom this year.

Shree Renuka Sugar has dropped over 30 percent this year, while Balrampur Chini has lost over 29 percent and Bajaj Hindusthan over 30 percent.

Do you see sugar prices dipping further this year or do you see it as a buying opportunity?

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