Is sugar sweet as expected?

salt · 1 Is sugar sweet as expected? Wed Feb 09, 2011 2:33 pm

salt

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Is sugar sweet as expected?

Lots of speculation on Pelawatte 3Q results and its future has pushed share price.
Is real change in the outlook? My answer is very unlikely at least for next 2 years. Sugar is a primary commodity for which we do not have scale economies. Temporary supply shocks have prompted the prices which could stabilize with supply resurgence in India & Brazil. But, some support can be given in case if oil prices rise sharply.

About 3Q results, I don’t expect any improvements in profitability – rather they will continue to make losses.

Dairy & leisure business needs lots of time and capital. We need to see the development carefully before committing any money

I think its highly and unsustainably overvalued

cse.alpha · 2 Re: Is sugar sweet as expected? Wed Feb 09, 2011 2:47 pm

cse.alpha

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Agree with you - although world sugar prices are at 30 year high, SUGA has major crop problems, with output falling, and the second half of the year (Oct to March) is low season, and usually loss making. Sugar is also a crop where output can also be increased quickly, thus contributing to volatility in prices, as seen vividly in 2010. Company is also dependent on government policy re: import duty on white sugar.

Potential positives are Pelwatte Dairy IPO, which has been talked of for a long time, but is more to do with sentiment, together with investments in tourism and power, which are though both long term.

Takeover speculation talk has also emerged in the past, and illiquid share can be easily manipulated.

dd · 3 Re Is Sugar sweet as expected ?. Wed Feb 09, 2011 4:14 pm

dd

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I agree fully with the comments made . I am a shareholder of this company for more than 20 years and the regular return the shareholders have got is the two kilos of sugar at the AGM and once a bottle of arack. ( To Drown the Sorrows ). Only in two or three years during the last 20 years that they paid a cash dividend. Please do not get carried away due to high world market prices of Sugar and burn your valuable savings.

bliss · 4 Re: Is sugar sweet as expected? Wed Feb 09, 2011 9:14 pm

bliss

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Bt da price appreciated from 30 to 47 in a short run...u cud hv sold ur shares n make some profits...i made a fabulous profit by day tradin SUGA yester day....y do u drink arrack n hold this share without realisin profits.....

Rocky · 5 Re: Is sugar sweet as expected? Wed Feb 09, 2011 9:24 pm

Rocky

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That is a typical statement from the mouth of a planter!

Know a couple of guys who worked there long ago. Someone, with the name of the roman emperor and another by the name of a person who is denoted by C.E.