No big problem in sugar

CNBC-TV18s Executive Editor, Udayan Mukherjee - There is no big problem in sugar. The one issue is that there is lose correlation between crude prices and where sugar stocks move because of the ethanol factor, I think psychologically it certainly is there.
 
So since crude is cooled down I think sentiment to a limited extent has been hit on sugar. The bigger issue is that a lot of traders were very bullish on sugar and now that the market has come down you are seeing a lot of unwinding happening in those stocks where people were loaded up with futures positions.

It is something we spoke about at the beginning of May because it looked like the open interest would have started building up given that March and April were good months, traders were feeling a little bit more bullish about the month of May. Therefore they built up a lot of positions in many of these sugar stocks that is beginning to unwind.
 
Balrampur Chini is probably fallen in line with an IFCI and Ispat more than any fundamental problem with sugar. It could put it correct more, entirely possible. But at lower levels you will find that buying is coming in because it would be very surprising if sugar goes back to test its recent lows. This is an unwinding of a trading position, which got built up. So if you get Bajaj Hindusthan if it corrects in this fall closer to Rs 165-170 or a Balrampur Chini gets back to that zone of Rs 75ish or Renuka Sugars gets back to Rs 100 odd, I think at those kind of levels you will see the longer-term sugar buyers coming to the picture again. Right now let the trading froth skim off a bit.