Expect sugar prices to remain buoyant: Dhampur Sugar

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Expect sugar prices to remain buoyant: Dhampur Sugar

Dhampur Sugar Mills has announced its results for the quarter ended June 30, 2009. The company’s consolidated net sales were at Rs 272.35 crore. Gaurav Goel, MD, Dhampur Sugars expected sugar prices to remain buoyant.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS Sugar looks weak: Mohoni ALSO READ See latest News about Dhampur Sugar See previous management interviews See what other Experts & Brokerages are saying about Dhampur Sugar Dhampur Sugar BSE | NSE 30/05/12 Are Mutual Funds betting on Dhampur Sugar?

Dhampur Sugar Mills has announced its results for the quarter ended June 30, 2009. The company's consolidated net sales were at Rs 272.35 crore. Its consolidated net profit was at Rs 10.90 crore.
Commenting on the results, Gaurav Goel, MD, Dhampur Sugars said the company crushed 26 lakh tonne of sugarcane in the quarter and had 1.2 lakh tonne of inventory. The cost price of sugar was of Rs 20 per kilogram and the selling price was at Rs 24- Rs 24.5 per kilogram. He expected sugar prices to remain buoyant in FY10. "Sugar prices will not decline in the next four-five quarters," he added.

Here is a verbatim transcript of the exclusive interview with Gaurav Goel on CNBC-TV18. Also watch the accompanying video.

Q: How many tonnes of sugarcane did you crush? What was the level of your inventory and what was the unit costing of that inventory and what was your buying price, if you can just give us some comparatives of production, inventory and buying on quarter on quarter?

A: We had actually crushed about 26 lakh tonne of sugarcane in '08-09, out of that in this quarter we have sold 1 lakh tonne. We still have a stock of 1.24 lakh tonne as of 1st July 2009. Apart from this in this quarter we have also contracted for 1.5 lakh tonne of raw sugar, out of that third of which has already come into India and the balance 1 lakh tonne would come into India within the next six weeks.

Q: Therefore what was the gain in terms of pure inventory in this 157% jump in sugar revenues that you see and more importantly how do you see the situation for FY10. Do you expect that you will be able to maintain this kind of margins or the sheer paucity of sugarcane availability and the minimum support price (MSP) would reduce the margins?

A: As of 30th June our stock that we have that we all are holding, we all have cost price of that of Rs 20 per kilogram and the current selling prices in the range of Rs 24 to Rs 24.5 so we do believe that even in the next quarter we all should be able to hold on to our earnings. As far as FY10 goes we all believe that sugar prices should stay buoyant, we don't expect that sugar prices will come down in the next four-five quarters.
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