Festival 1505 zhengtang force contract hit a new high, 1509 and 1505 contracts from the previous contract spread premium 130 yuan / ton premium into 30 yuan / ton, the market turned bullish price pattern arrangement. We believe that sugar futures led the stock status will continue, but the need to guard against the price difference is too large period of rapid price decline.
Clear and logical basis for the bull market
Logical basis for the current round of sugar prices is a huge gap between production and demand. 2014/2015 annual domestic sugar production is expected to 11.5 million tons, production and demand gap of nearly 300 million tons, which is to promote the main logic sugar prices. As of the end of January 2015, cumulative production of domestic sugar fell 1.735 million tons, the total sales volume reduction of 210,000 tons, sugar industry industrial stocks fell 1.522 million tons.
We can see that the sugar prices accompanied enlarge sales, belong to the volume of price in the market, indicating that the bull market is still very solid foundation of. February is expected monthly sugar production is still hard to have better performance, mainly caused by the production of sugar during the Spring Festival to stop.
Industrial policy-driven sugar prices
We believe that restrictions on imports are the main factors driving the rapid rise in the price of sugar. The domestic price of sugar in stark contrast to the rapid rise in the domestic price of sugar has hit five-year low, in-quota import prices fell to 3,500 yuan / ton, quota prices fell to 4,500 yuan / ton, both inside and outside the spread widened to an unprecedented high points. From October 2014 to January 2015, the national total sugar imports 1.468 million tons, of which only imported 385,000 tons in January, far below market expectations, on the one hand is the import quota record profits, on the other hand is cheap imported sugar could not flow into the domestic market, we believe that this huge difference greatly stimulated the market is expected to do more enthusiasm.
Lack of market forces short
After the formation of the bull market expectations, the number of investors in the market short decreased significantly. Sugar as the largest party on the spot market short, the crop production 1.8 million -200 million tons, decreased demand for hedging, sugar and even sell back there by bigger demand for the main business income, indirect enhancement the market to do more atmosphere. Midstream and downstream industry chain replenishment demand makes the spot market further strained resources, and create a virtual inventory through the futures market also many. Compared to the same period of the previous crop, sugar spot market Paohuo pressure disappeared, more and more reluctant to sell sugar to join the ranks of the spot price and easy going down the pattern established.
Based on the above analysis, the bull market in sugar prices is the norm, the norm is rising too far at this stage sugar price difference widened to 200-250 yuan / ton, the market risk-free arbitrage opportunities are up too far in the case, investors need to guard against the risk of rapid price correction.Barium chloride