The sugar crisis continues/ What effect does the increase in global sugar prices have on the sugar and sugar group?

According to Tejarat News, the survey of global markets shows that the global price of sugar has increased since the last two months and has reached its three-month high. So that this product, after breaking the resistance of 700 dollars per ton, was able to reach the price of 709 dollars per ton and attract everyone’s attention.

India’s sugar export ban due to drought is the most important reason for the current sugar price situation. On the other hand, sugar production in Thailand has also decreased, and this raises the possibility of a decrease in the country’s exports. Therefore, the return of sugar price in the near future is far from expected, and we have to see what will happen to this product in the future?

Will the shares of sugar producers grow?

In the initial analysis, maybe the selling rate of sugar in the domestic market is reasonable, but if the cost of importing sugar increases, this trend will affect the domestic price of sugar further down the road. But the issue that is important right now is the short-term impact of this news.

A look at the situation of the sugar group in the past days shows that the news of the increase in the global price of sugar in the short term has benefited the sugar group. To prove this, it is enough to check the status of the index of the sugar group in the past days.

Examining the sugar index chart shows that the average shares of this group have left a good performance with a growth of about four percent. A look at the market map of this group also indicates that most of the sugar symbols have been traded with positive volatility. But a point that needs to be said; The good condition of the stock market indices in the last two days. So that the capital market has passed a favorable situation in the last two days due to the good news of the automotive and chemical groups.

Therefore, it can be said that the impact of this news is hidden among the clamor of demand in the capital market.

How does global price growth affect sugar consumers?

But the story of the increase in the global price of sugar is different in relation to the food companies that use this product as a raw material. Since about 40% of domestic sugar is imported and the global price of this product has increased in the past weeks, the cost price of companies whose raw material is sugar will rise in the near future.

In this case, the production cost of companies such as Mino, Pars Mino, Behnoosh Iran, Vitana, Salmin, Gerji and Gaz Seke will increase in the near future. Since the selling price of these companies’ products is also an order, it should be seen what the mentioned companies will do with the reduction of the profit margin.

In any case, if the current situation of sugar continues, we should not expect good monthly reports from the mentioned companies, and a decrease in their profitability will not be far from expected.

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