We should be alert to the evolution of domestic sugar into irrational speculation
Date：1, 21, 2019Hits：3
The night before last, Zheng Sugar rose sharply, the main force of about 1905 set once touched the rise and stop board, and eventually the above 184 points to collect a longer positive line, market popularity was stimulated, sugar pals jumped to brush the screen circle of friends, congratulations. However, this is pure hot money speculation? Or the opening of a new bull market in the sugar market in China? Is it good or bad for the development of sugar industry in China? What should the sugar industry do?
If it's just hot money speculation, the sugar industry in China has had a painful lesson. After speculation, it's all chicken feathers. Whether the production expansion in 2002, the frozen market in 08, or the imposition of 16 years of compulsory tariffs, eventually turned into a disaster for the sugar industry. In fact, whether the sugarcane purchasing price system, the sugarcane area division, or the storage system are directly related to the irrational surge in sugar prices.
Since the beginning of 2019, there has been a continuous rise in the sugar market in China, especially in the period of sugar. The main contract of Zheng Tang has risen 450 points since the lowest point, which verifies the validity of the view that the end of 2018 is the most important time window put forward by the early ice peak. At the same time, it verifies that the bottom of the low-level box is only a non-mainstream fluctuation range, which deviates from the conclusion that the domestic sugar market value is seriously underestimated in this squeezing season. Sugar-making enterprises have few opportunities to work for distributors and terminals for free or even inverted money below the production cost.
According to the reasonable description of existence, the domestic sugar boom can only be defined as a part of the recovery recovery of sugar prices, or near the profit and loss line of production costs. It is not pure hot money speculation, at least there is no speculative signs, but should be categorized as price discovery. Is it reasonable for sugar enterprises to lose money? Sugar enterprises should not be profitable? Moreover, sugar enterprises also shoulder the task of getting rid of poverty and entering a well-off society. Bingfeng believes that sugar prices are rising not only justly, but also rightly and vigorously. Hot money is also well-known. As Chairman Jia Zhinen of China Sugar Association said at the beginning of November last year,'Futures funds should go against the national sugar industry policy', the original meaning is roughly the same.
Firstly, it is one of the concepts of ice peak that sugar price in China is running in a reasonable range to avoid big ups and downs. However, as China's A-share market has been afraid of ups and downs in the past, and has finally been forced to propose to increase the stock market activity, the current domestic sugar price is only recovering, far from irrational. Profit is the basis of the development of any industry. We can not strangle the foundation of sugar industry too early, but can only make reasonable guidance. What is the reasonable range of sugar price in China? The ice peak of this problem has been analyzed in detail many years ago `production costs rise by 10-15%'.
Secondly, efforts to stabilize sugar prices should not be relaxed because of a rebound in sugar prices. The main reason for the operation of domestic sugar prices is the relationship between total supply and demand. In addition to the cyclical reversal of the external sector, the rise of the domestic sugar market has not substantially improved the supply surplus in the whole squeezing season so far. It is more the anticipation of the reduction of total supply that plays a role. That is to say, no matter how to crack down on sugar smuggling, how to import on demand, or how to deal with national storage and depot, we should not slack off at all. If the total supply remains unchanged, it will be useless to go up as high as it is now. In the end, it will fall even worse. After all, there is too much sugar.
Finally, we should be open and tolerant to the sugar activity in the period of hot money increase, rather than sniping blindly. First, the current sugar price is still within a reasonable range. Second, the total position is far from enough. Normal 2 million hands, ideal 3 million hands equivalent to 15 million tons of theoretical delivery volume, the large group will have the depth of hedging. Third, it is expected that efforts to stabilize sugar prices will only enhance or not weaken. Fourth, the strength of this round of releasing water can not be ignored. Fifth, Sino-US trade friction is expected to end in stages. Sixth, Sino-US trade friction is expected to end. The global economy is expected to improve, although there are big differences.
Therefore, we should not only welcome the rise in sugar prices, but also prevent it from evolving into irrational speculation, which will affect the stability of sugar prices, especially the improvement of total supply in the whole squeezing season. We should recognize the rationality of sugar price rise, but we should not blindly optimistic and ignore the potential uncertainty. We should not only adhere to the consensus of the industry to strengthen self-protection, but also arrange for positive sales at favorable prices. Operational suggestions for the best bottom-copying layout opportunities have been fleeting, can only follow the trend, fear the power of the trend, fear the market, the market is always right.
Author: XXX; Source: Yi Sheng Wealth