Outside squeeze pressure, Zheng sugar want to rise

Wednesday's Zheng sugar rose in the domestic stock market rose and pushed up, SR1109 contract rose 76 yuan to 7,186 yuan / ton, recovering all the previous day's decline, but the daily position is reduced 21,632 hands, the gains are weak. On Friday, the People's Bank of China announced that raising the deposit reserve ratio triggered a recent financial market shock. The international raw sugar futures price was in a period of fierce turmoil. The market movements that soared the previous day and then fell sharply on the previous day caused investors to dizzy and to a certain extent impacted Zheng Sugar’s rising trend.

The export of India is uncertain and the international raw sugar price has skyrocketed and plummeted. Fueled by insufficient global sugar supply, ICE raw sugar futures prices hit a record high on December 28, 2010. On the day of the 1103 issue, the price of sugar hit 34.74 cents, pushing the year's gains to a climax. Immediately on December 30th, the sugar price of the ICE sugar market plunged by 10%, and the international raw sugar fell into a high range of 30-33 cents. From the perspective of sugar supply and demand, the most important reason is the impact of uncertainty on the export of sugar in India, the world’s second-largest sugar producing country, resulting in the recent soaring international sugar prices. India fears that inflation will continue to deteriorate and sugar export decision makers are facing tough choices. Indian officials seem to be very cautious about sugar exports. Judging from the current situation, it is estimated that it is unlikely that officials will authorize an increase in sugar exports before India’s domestic sugar production is sufficient to eliminate all concerns.

In 2011, the Bank of China's top-notch RRR cut the market. The central bank announced on Friday evening that from January 20, 2011, it raised the RMB deposit reserve ratio of financial institutions by 0.5%. In 2010, the Central Bank raised the deposit reserve ratio six times and raised interest rates twice. In terms of time intensity, China has clearly entered a tightening monetary policy. The central bank raised the rate of deposits at the beginning of the year, indicating that the central bank’s main goal this year is to curb inflation expectations. On January 17th, the domestic stock market suffered heavy losses. The Shanghai Composite Index tumbled 3.03% or 84.68 points, and the stock index futures 1101 contract price plummeted 4.38% or 136.2 points.

The volatility of the futures price is very strong, and the hedging of sugar companies is a countermeasure. The price of Zheng sugar main contract SR1109 reached a record high of 7,521 yuan per ton last November, and then fell sharply. It went straight to the line of 6,200 yuan/ton, which was a drop of 1,300 yuan/ton. On Jan. 7, the price of Zhengzhou Sugar SR1109 fell by 5.04% or 365 yuan/ton, and the market risk was increasing. The ups and downs of the disk have increased the operating risk of sugar-related companies.

The price of domestic Zheng sugar prices fluctuated, the main contract SR1109 price range in the range of 6850 yuan -7300 yuan wide shock, the pressure appeared above the line in the 7200 yuan line. On the one hand, in order to curb inflation, domestic monetary policy continues to tighten. On the other hand, Guangxi's 2010/2011 crop season has tighter capacity expectations, supporting the maintenance of sugar prices at a high level. The current high value of frost disasters in Guangxi's main sugarcane producing areas, the recent cold air continued to the south, Guangxi, Liuzhou, Laibin and other northern regions have frequent occurrence of frozen disasters, production expectations are also quite versatile. Frost disasters have become the subject of market speculation, leading to sugar prices that have risen and declined over the years.