Financial Daily from THE HINDU group of publications
Wednesday, Nov 26, 2003
Financial Daily from THE HINDU group of publications Wednesday, Nov 26, 2003 |
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Markets
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Stock Markets Ruchi Soya rides on US crop failure Our Bureau
Kolkata , Nov. 25 THE Ruchi Soya Industries stock on Tuesday saw a sudden spurt in volume and price on the major bourses. The stock closed at Rs 73.30 (Rs 65.20) on the Bombay Stock Exchange with a traded quantity of 46,457 (3,111) shares. On the National Stock Exchange, the counter had a volume of 90,799 (7,207) shares. According to market analysts, the second largest manufacturer of soya oil and soyameal in the country, Ruchi Soya Industries has attracted investor interest for better prices of its products in the overseas market in September and October following news of soya crop failure in the US market. However, an industry analyst from Chennai told Business Line that the stock market's enthusiasm was somewhat misplaced and mistimed. He admitted that the de-oiled soya cake fetched premium for couple of months, which should have benefited Ruchi to some extent. "But currently, the international prices have started falling because of Chinese selling. China, which dominates soya trading on the Chicago Board of Trade, has started selling soya aggressively creating a downward price spiral. This is likely to continue for next couple of months till the South American crop arrives in February. If that is not to the expectation, then price revival in the third quarter will be elusive", he observed. A section of the market observers, however, maintains that the $40 mark-up in soyameal in the overseas market during September-October will improve margins for Ruchi. Indore-based Ruchi group's flagship, Ruchi Soya, has a total refining capacity of 3,000 tonnes per day and exports its products mainly to Korea, Japan, Taiwan and Indonesia. According to industry watchers, the domestic soya crop production this year has gone up from 43 lakh tonnes to 71 lakh tonnes. "The price sensitive domestic soya oil market does not provide much scope for enhancing margins for soya oil producers," an industry insider commented.
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