Wilmar Int’l: Sugar prices jumped to an 11-week high on speculation that demand will increase in Indonesia and China. Pent-up demand and weather issues are providing support to the price. India is unlikely to export any supplies soon to the global market because of low domestic inventories. Wilmar, is acquiring Australia’s biggest sugar refiner, believes demand in Asia exceeds annual supply by 30% and needs to import from major producing countries such as Aust.
According to USDA, Asia imported 16.5m MT of sugar in 2009 and is projected to jump to 19.9m MT this year, which should benefit Wilmar given its market leadership in Asia. The group aims to widen its product portfolio to offer a full range of staple products. It has a 200k ha concession in Papau, Indon to cultivate large scale sugar plantations. Expect stock to cover runaway gap at $6.18. DB has a buy on the stock with $6.75 target.
No comments:
Post a Comment