Fundamental analysis of abundance / positive outlook of sugar group following sugar shortage – Tejaratnews

According to Tejarat News, with the progress of the sugar industry and the industrialization of the production of this product, there was always a whisper of creating a suitable platform for the prosperity of sugar production, which is a strategic product. So that experts and activists in this field believe that Iran has the ability to pass the import phase and can even become one of the exporters of this industry by using its production capacity. Because the countries of the Persian Gulf region are all importers of this product and in a way a big consumer of it.

Also, activists of the sugar industry believe that Iranian farmers do not use the capacity of arable land for beet, which is considered the main ingredient for sugar production.

So that out of 20 million hectares of cultivated land, less than two percent of it has been dedicated to beet cultivation. Because with the government’s pricing for selling beets to factories, it is practically not profitable for farmers to grow this product.

This caused Iran to become one of the importers of this product despite its ability to produce sugar and to stand on the 13th place of sugar importer.

Prescriptive pricing continues to take victims!

The biggest obstacles for sugar and sugar producing companies, including Khorasan Stable Sugar, to jump in production is the mandated pricing, which again shows the government’s footprint in preventing the development of industries.

This factor, which has plagued other industries, is noticeably more serious in sugar companies. Because both the beet sales rate to the producing companies and the final product rate are announced by the government.

In some way, the price of none of the primary and secondary materials of this industry has not been identified with supply and demand, and this causes sugar to face serious shortages at certain times of the year.

At the same time, it should be noted that the result of the government’s insistence on imposing its own prices is only creating a gap between the price of sugar in Iran and the world markets.

Now this question is raised that despite the announcement of the price of products and raw materials of this industry by the government and the high cost of production of this product, will the production of sugar in Iran prosper?

The bitter taste of lack of gas

In the sugar trade, it should always be noted that due to the relative stability of demand, the price of sugar changes with supply fluctuations.

Although Europe passed the winter, its crises continue to claim victims. After European countries faced the problem of gas shortage, the demand for clean fuels, including ethanol, increased and the price of this fuel in the world markets recorded a significant jump.

Brazil, which is the largest exporter of sugar, is the first country to reduce the supply of this sweet product. Because the production of ethanol from sugarcane is preferred to sugar because of the higher profit margin. This caused the lack of gas to make the taste of the people of the world bitter.

Also, the second largest producer of sugar, India, is also facing a serious problem of drought. Thus, India is another country that has limited its sugarcane cultivation and subsequently its sugar export.

All the points mentioned caused the supply of sugar in the world to decrease and the price of this product to increase in the world markets.

Capital market experts consider this increase in the price of sugar in the world markets as a great lever to turn on the engine of the stock market sugar group.

Khorasan Stable Sugar is one of the influential companies of the sugar group, whose performance in March is analyzed in this report.

Let’s get to know more about profanity

Khorasan Stable Manufacturing and Industrial Factories Company was established on August 20, 1336, and its shares were listed on the Tehran Stock Exchange for the first time in April 1380 at a price of 307 Tomans.

The capital of the company at the time of initial offering was four billion and 500 million tomans, which after five stages of capital increase has reached 646 billion tomans.

The last capital increase of the company was in June 1400, by which the capital of Qasabat reached more than 10 times.

Currently, the shares of Khorasan Constant Sugar Company with a market value of two thousand and 32 billion tomans are traded in the second market of the stock exchange.

What did Qasabat do in March 1401?

Reviewing the monthly performance report of Khorasan Stable Sugar Company shows that the company has faced a 92% decrease in production in the last month of 1401.

This reduction in production is somewhat normal in sugar companies. Because now it is the turn of the first beet cultivation and until August, sugar companies do not have raw materials for production.

This report clearly shows that the production and sales of this company decreased by 92% and 61% respectively in March 1401 compared to February this year.

In this way, the company’s production in March 1401 has reached 244 tons from two thousand 952 tons in Bahman.

The sales amount of the company reached 9 thousand 37 tons in February 1401 to 3 thousand 511 tons in the mentioned month.

Despite the normality of this decrease in production in Esfand, it should be noted that the production amount of the company in Esfand 1401 compared to the same period of 1400 has decreased by about 76%, which is not an acceptable performance for Khorasan Stable Sugar.

Further investigation of this report shows that Qasabat earned 29 billion 467 million from the sale of its products in this month, which has decreased by 74% compared to last month.

It should be noted that 29 billion Tomans is a very small number compared to the high capacity of sugar production in Iran. Of course, experts emphasize the high capacity of the country’s sugar production and admit that as long as the heavy shadow of the government is over the discovery of the price of this product, the sugar group will not have a good future.

Of course, maybe at times due to the decrease in the supply of sugar in the world markets, the shares of sugar companies will rise to some extent, but for these shares to fall on the upward trajectory, the companies of this group need its support for production instead of the government’s heavy monitoring of pricing.

Read more reports on the stock news page.