BRAZILIAN PRODUCTION

Buyers should know that Brazil is a large sugar producer (over 36 million tons in 2009), but with very low production of white refined, Icumsa 45 (near 4.5 million tons/year). We should also know that this sugar is disputed by more than 20 large traders. To fulfil the need of sugar producers for finance and security, sugar is traded before production. Therefore, third parties, new comers, will not be able to get large quantities. Most Icumsa 45 is committed in advance to those traders. So, random offers, like 200,000 MT x 12 months, and more, are just nice dreams. Most Brazilian sugar for export is raw brown (VHP), for the refineries to produce Icumsa 45. Brazil also exports large volumes of white crystal sugar, Icumsa 150 (which is perfect for human consumption), mostly in containers.

TYPES/GRADES OF SUGAR

One of the most popular and internationally recognized organizations for specifications for sugar is ICUMSA (International Commission for Uniform Methods of Sugar Analysis). Specification for sugar is very clear, and that's why sellers do not like to send samples. Once buyers clearly specify the sugar they need, reliable suppliers will deliver that sugar (and a Quality Certificate, issued by an internationally recognized inspection company, will be supplied by serious sellers).

PACKING

We can supply as follows: • big bags of 1000 kg • 50 kg pp bags • 25 kg pp bags • 1 kg, 2 kg and 5 kg plastic bags • It is not economically viable to use 40' containers for sugar. Final price is cheaper if in 20'. • On a 20' container we put 26 tons of Icumsa 45, and 27 tons of Icumsa 150 and 650/1200.

BRAND/MARK

Can be with suppliers' brand, or with buyers' brand, to be agreed.

QUANTITY

In our specific case, we prefer to supply smaller volumes (from 150 to 1500 mt per shipment) in containers (up to 27 tons net each, as per buyers' possibilities). It's safer and easier to get smaller volumes. Eventually, we can work full ship loads, but this is not our goal. Indeed, sometimes we can offer larger volumes, like 10,000 mt or 15,000 mt, provided buyers permit partial shipments. Usually, buyers do not need the sugar to be with them at once. They can buy larger volumes, for weekly shipments, for instance. This can avoid buyers to have large amounts of money blocked. Buying smallers volumes, in containers, can be cheaper than to buy full ship loads, because freight for chartered vessels became extremely expensive, more expensive than in containers. Also, when in containers, buyers and sellers do not take any risk for demurrage, etc. They know the final cost, in advance.

SHIPMENT

Within 10/20 days after receipt of payment instrument. Or as per contract.

PRICES

Market price is available from major commodity news services and newspapers. Sugar is mainly quoted at the London Stock Exchange, LIFFE (for Icumsa 45), and New York Stock Exchange (NYSE) for other grades. Buyers must also know that there may be a premium or a discount on the levels of the Stock Exchange. Circumstances will determine the premium or discount. Of course, it's not true that some suppliers can offer sugar much under the Stock Exchange levels, from Brazil. This information is false. Market prices do not change dramatically in a short period of time, and no method exists by which sugar can be traded at lower prices. Much before looking for price, buyers should look for safety with reliable sources.

USEFUL NOTES

1. "High Sea" sugar : This is basically a myth, a phantom, specially when demand is much higher than offer, like it happens now. Any floating sugar now has a firm buyer, who is eagerly waiting for it. High Sea sugar may occur when there is a big surplus, and sellers must clear their warehouse to put new sugar they are producing. At this stage, they take the risk to put the sugar on board, even if they do not have a buyer, and then they desperately start working to find a buyer, even at a discount, to compensate the high daily cost they have to maintain a lazy chartered vessel on the sea, with no destination.

2. Price list : It is very common to receive enquiries asking sugar price list. Being a commodity, there is not a price list. Price is subject to the daily Stock Exchange quotes, which vary at every second (which makes it impossible to talk of a price list).

3. Documents to be supplied by exporters: o Bill of Lading o Commercial Invoice o Packing List o Certificate of Origin o Certificate of Analysis (by an internationally recognized inspection company) o Health/Sanitary Certificate

Introduction –SUGAR INDIA

With over 450 sugar mills, India is the second largest sugar producer in the world. Over 11 million tons of refined sugar is produced, accounting for 60% of the total sugar cane cultivated. Following is the Indian export statistics for sugarcane that counts to about 811027.5 M. Tonnes in the year 2000- 2001.

Production area

In India the major sugar cane producing areas are Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh and West Bengal.

Growth promotional activities

The Indian government has announced their intention to fully liberate sugar sector in phases. The process has been initialized with the following measures:

• Setting up of futures / forward market in sugar and has given approval to three exchanges for the purpose of forward trading.

• Release of sugar for each factory on quarterly basis instead of monthly basis as is being done hitherto.

• To boost the export of sugar from the country the policy allows free export of sugar and factories can also undertake export of raw sugar in addition to mill white sugar.

The Govt. has decided to deferment benefit of adjustment of releases of free sale sugar made for export purposes from 12 months to 18 months.