Daily Indian Sugar and Gur Price Outlook and Strategy

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Marilyn Sullivan
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1 Next 1 Trading days Daily Indian Sugar and Gur Price Outlook and Strategy Report for 17 May 217 Position May 217 NCDEX Sugar M July 17 NCDEX Sugar M Price Outlook Summary ICE Sugar 11 July 17 USc/Lb LIFFE Sugar 5 Aug 17 USD/MT Muzaffar Nagar Gur Spot Kolhapur M3 Sugar Spot Muzaffar Nagar M3 Sugar Spot Strategy Review Closed Positions Audit Wait for fresh strategy. Market Period Strike Rate % Net Profit Per Lot NCDEX Sugar M 1M 26 to Till Date 61.26% INR 3994 Apr 217 1% INR 1 Closing Price Fundamental Summary Price Outlook Summary Direction Price Range Critical Price drivers Latest IMD forecast of Normal Monsoon on weakening Al Nino scenario Indian Food Minister statement for no further import in near future Central govt. approved subsidy for PDS under AAY ~ supply 3 lakh ton (1% of total subsidy) Implementation of GST from July 1 st week Price Direction Downward Upward Upward Downward Prices are likely to extend the weakness towards INR 372 in the coming 3-5 sessions. Mixed 372 to 386 NCDEX Sugar M Trading Strategy Fresh / Open Contract Position Entry Entry Date Objective Stop Loss Fundamental Analysis The active July 17 NCDEX contract on account of rollover to new contract from near month tender period/near expiry of May 17 led market to trade volatile, though physical market remained fairly stable at Kolhapur/Muzzafarnagar. Finally Market closed at Rs 3783 down by Rs.79/qtl than previous close. On latest update from IMD, S-W monsoon likely to be on schedule with weakening of El Nino phenomena and strengthening of IOD (Indian Ocean Dipole) conditions. Further it hopes of 1% precipitation of 5 years average consideration. By expecting above average monsoon with spatial distribution of rain on cane planting area, market likely to remain underpinned moving forward on above dynamics. Latest with PDS sugar subsidy, Yesterday CCEA (Cabinet Committee on Economic Affairs) confirmed to provide 1 kg of sugar at Rs.13.5 to the poorest of the poor families under AAY (Antyodaya Anna Yojana). This is likely to result in lifting of 3 lakh ton sugar from open market at wholesale market. Incremental demand in market due to this will be minimal compared to 28 lakh ton of purchase under PDS for BPL families earlier. Ongoing summer and wedding season resulted in higher off take by stockist/bulk consumer in north Indian market supporting UP price to move up by 2-3/qt in last few days. However on the other hand Maharashtra price remain subdued on release of older stock by millers. Latest with the Maharashtra Sugar Cooperative mills subject to differential pricing for sugar demand from industrial and retail consumers. The proposal suggests to sell sugar on extra premium to industrial buyer compare to household consumers. Mostly S-3 which trades at discount of Rs 1/qt than M-3 is used by industrial consumer. As close to 65% demand of sugar is catered to industrial segment, above have wide ranging implication in longer term if accepted by GOI. Though it is still in proposal stage and further action by Govt need to be looked closely in this regard. Prepar ed b y TransGr aph Pr ice Risk Con su ltin g Team Copyr ight Protected ser vices@tr ansgraph.com sgr aph.com ansr isk.net 1 P a g e

2 Food Minister discoursed that stocks lying around in mills are sufficient for consumption and stated no plans to allow further import. Further it stated local market would get distressed on account of above import. On unfolding dynamics, local prices likely to trade on firm with marginal upward trend however international market likely to remain bearish. Spread b/w S-3 Kolhapur and M-3 Muzzafarnagar is widening from Rs 2 in mid April to Close to 12/qt on account of rising demand from UP sugar mills than Maharashtra. (Lower spread has resulted in UP prices becoming competitive than MH prices.) In Pan India, GST (Goods & Service tax) is likely to implement from July 1 st week onwards and on account of above, stockiest/trade business will be forced to be transparent resulting in lesser stock demand than earlier to avoid tax net. This will result in lower stockist demand at immediate note though moving forward the impact will taper. According to Maharashtra Cooperative Sugar Factory Federation (MSCSFF) officials, the sugar output is projected to touch 72 lakh ton from 725 lakh ton of cane availability with considered avg % sugar recovery. This forecast of sugar production from MH is slight higher compared to 7 lakh ton estimated by Western India Sugar Mills Association. On the other hand TG is estimating 17/18 production at 79 lakh ton for Maharashtra on better groundwater recharge, higher recovery projected in state. On parallel with farmer due payment, TN sugarcane farmer association asking state CM to ensure payment of cane arrears as profit share from private sugar mills which is pending from Looking to overall sugar industry status, market is likely to be firm in upcoming days. Technical Outlook: NCDEX Sugar July 17 NCDEX Sugar July 17 futures prices have traded with bearish momentum and closed at INR 3783 in the last session. Prices have contract gap on the down side which likley to close in the coming sessions. Prices are trading positive after finding support at INR 366 and approaching all time high level of INR 395. Prices are consolidating below INR 395 from last one year which likely to continue. On higher side, INR 386 region can acts as immediate resistance followed by INR 396. On down side, INR 372 can act as an immediate support. Concisely, prices are likely to extend the weakness towards INR 372 in the coming 3-5 sessions. Mini Charts Sugar M Spread () Sugar M Spread () Dec 17- Oct 17 (spread) SugarM3 Spot Spread (Kolhapur- Muzaffarnagar) () Prepar ed b y TransGr aph Pr ice Risk Con su ltin g Team Copyr ight Protected ser vices@tr ansgraph.com sgr aph.com ansr isk.net 2 P a g e

3 SugarM3 Spread(Spot-Future) Kolhapur (INR/ Qtl) Sugar M2 Forward Curve (INR/ Qtl) Brazil Refined-Raw Spread (USD/MT) LIFFE - 5 Sugar Spread (USD/MT) Mar 18-Dec 17 (spread) ICE -LIFFE Future Spread USD/INR /16/ Jul'17 Oct'17 Dec' Difference (Refined M-3- Landed from Brazil() Mar 18- Oct 17 (spread) USD/BRL 3.96 CBOT Ethanol (USD/gallon) 5/16/ Jun'17 July'17 Aug'17 Sep' Sugar S-3,M-3 & Brazil Refined Sugar prices LIFFE - 5 Sugar Spread (USD/MT) LIFFE - 5 Sugar Spread 14(USD/MT) May 18- Mar 18 (spread) Oct 17 - Aug 17 (spread) Dec 17- Oct 17 (spread) Market Prices Prepar ed b y TransGr aph Pr ice Risk Con su ltin g Team Copyr ight Protected ser vices@tr ansgraph.com sgr aph.com ansr isk.net 3 P a g e

4 Exchange NCDEX Sugar M ICE Sugar 11 USc/Lb LIFFE Sugar 5 USD/MT Contract 16 May 217 Open High Low Close Previous Close May 17 NA NA NA NA. NA Jul July' Oct' Aug' Oct' Market Commodity 16 May May 217 % Brazil FOB Raw Sugar USD/MT % Brazil FOB Refined Sugar USD/MT % Black Sea C&F Raw Sugar USD/MT % ISA Daily Sugar USc/Lb % ISA 15 Day Average price USc/Lb % India Muzaffar nagar India Muzaffar nagar Gur Chaku INR/4Kg % Sugar M % India Mumbai Sugar M % India Kolhapur Sugar M % India Kanpur Sugar M % Market Commodity 16 May May 217 Mawana Ex-Mil Sugar M3 Simbhaoli Ex-Mil Sugar M3 Simbhaoli Ex-Mil Sugar M3 Shamli Ex-Mil Sugar M3 Khatouli Ex-Mil Sugar M3 % % % % % % India Mumbai Sugar S % India Kolhapur Sugar S % Currency 16 May May 217 % EURUSD GBPUSD USDJPY USDBRL USDTHB USDINR USDCNY USDMYR Prepar ed b y TransGr aph Pr ice Risk Con su ltin g Team Copyr ight Protected ser vices@tr ansgraph.com sgr aph.com ansr isk.net 4 P a g e

5 Our Extensive coverage of Edible Sugar, Plantation and Dairy Transmittal via the Internet Report Coverage # Price Outlook & Strategies Daily ICE Sugar Price Outlook and Strategy Daily ICE COCOA Price Outlook and Strategy Daily NCDEX Sugar Price Outlook and Strategy Daily Mango Market Intelligence Reports Weekly Indian Sugar Price Outlook and Strategy Bi-weekly AP COCOA Market Intelligence Bi-weekly Kerala COCOA Market Intelligence Bi-weekly Milk and Milk Products Market Intelligence Bi weekly Mentha Oil Price Outlook & Strategy Monthly Sugar Price Outlook FF, MP, 2W, 6W FF, MP, 6W,2M FF, MP, 6W,2M FF, MP, 2M FF, MP, 2M US.SUGAR 11.ICE US.COCOA.ICE IN.SUGARM.NCDEX, Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra and Gujarat IN.SUGAR.KOLAHPUR, IN.SUGAR.MUZZAFARNAGAR, IN.GUR.MUZZAFARNAGAR IN.COCOA.AP IN.COCOA.KERALA IN.SMP.DELHI, IN.SMP.MH, EU.SMP, AU/NZ.SMP, EU. BUTTER,AU/NZ. BUTTER IN.Chandausi US.SUGAR.ICE, IN.SUGAR.KOLAHPUR, IN.SUGAR. MUZZAFARNAGAR Monthly Ethanol Price Outlook FA, PI, WA, PO, MI, FF, 2M IN.RECTIFIED SPRIT. UP, IN. ENA. UP, IN.MOLASSES Monthly Indian Dairy Industry Insights Industry Analysis, MI, FA IN.MILK # News Update NU, Fundamental Analysis FA, Balance Sheets BS, Weather Analysis WA, Policy Impact PI, Technical Analysis TA, Trading Strategies TS, Procurement Strategies PS, Price Outlook PO, Market Intelligence MI, Facts & Figures FF, Market Prices MP, Price Spreads PS, Forward Curves FC, Elliott Wave Analysis EWA, 5D, 2W, 6W, 2M, 4-6M LEGAL INFORMATION This document is the whole property of TransGraph Consulting Private Limited, Hyderabad, India (hereafter TransGraph ). The following acts are strictly prohibited: Reproduction and/or forwarding for sale or any other uses Posting on any communication medium Terms of usage Upon receipt of this document either directly or indirectly, it is understood that the user will and must fully comply with the other terms and conditions of TransGraph. By accepting this document the user agrees to be bound by the foregoing limitations. This publication is prepared by TransGraph and protected by copyright laws. Unless otherwise noted in the Service Agreement, the entire contents of this publication are copyrighted by TransGraph, and may not be reproduced, stored in another retrieval system, posted on any communication medium, or transmitted in any form or by any means without prior written consent of TransGraph. Unauthorized reproduction or distribution of this publication, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent necessary to protect the rights of TransGraph. The information and opinions contained in this report have been obtained from sources TransGraph believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy or sell any assets (commodities, currencies, etc) or other investment. Information and opinions contained in the report are published for the assistance of recipients, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient; they are subject to change without any notice and not intended to provide the sole basis of any evaluation of the instruments discussed herein. Any views expressed reflect the current views of the analysts, which do not necessarily correspond to the opinions of TransGraph or its affiliates. Opinions expressed may differ from views set out in other documents, including research, published by TransGraph. Any reference to past performance should not be taken as an indication of future performance. No member in the public related to TransGraph accepts any liability whatsoever for any direct or consequential loss arising from any use of material contained in this report. Analyst Certification Each analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the analyst's views about any and all of the factors and assets (commodities, currencies, etc) named in this report, and (ii) no part of the analyst's compensation is directly or indirectly, related to the execution of the specific recommendations or views expressed herein. Errors and Omissions Excepted (E&OE) Copyright TransGraph Consulting Private Limited, Hyderabad, India. Talk to us on: Sales: mktg@transgraph.com More info: TransGraph Consulting Private Limited 6C/A, Melange Towers, Sy.No.8-84, Hitech City, Hyderabad 581, India Research Queries: services@transgraph.com TransRisk software: demo@transgraph.com Prepar ed b y TransGr aph Pr ice Risk Con su ltin g Team Copyr ight Protected ser vices@tr ansgraph.com sgr aph.com ansr isk.net 5 P a g e

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