“HIGH FRUCTOSE CORN SYRUP-THE WILDCARD IN THE U.S.-MEXICO SWEETENER MARKET”

FEBRUARY, 2011

2

INDEX

I. Mexico leading sugar producer with a large Sweetener Market.

II. North American Regional Market a Reality:

II a) Mexican Sweetener Market .II b) U.S. Sweetener Market.II c) U.S. and Mexico Sweetener Market.

III. Mexico: Sugar Balance 2010/011 marketing year, advance to January 31, 2011.

462 503 501 560 590 341 176 241 468 663 714 784 6651,418 1,430

3,83

8

4,02

5

4,06

8

4,21

4

4,62

9

4,57

8

4,92

0

4,89

7

4,82

3

5,02

6

4,58

0

4,56

7

4,95

8

4,35

4

4,39

2

0

1,000

2,000

3,000

4,000

5,000

6,000

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Proj. 10/11

Mexican Market: Sugar and HFCS Consumption Thousand MetricTons

HFCS, dry weight Sugar

4,3014,528 4,569

4,774

5,2194,919 5,095 5,138 5,291

5,6895,294 5,352

5,623 5,771 5,822

3

I. Mexico leading sugar producer with a large Sweetener Market.

Source: F.O.Licht's Intarnational Sugar and Sweetener Report World Sugar Balances 2000/2001-2009/2010..

38,798

20,325

11,673

7,169 7,1195,026 4,282 4,090 3,635 3,596

Brazil India China Tailand USA Mexico Germany France Australia Russia

Mexico: World's sixth Leading Sugar ProducerCycle 2009/2010

Thousand metric tons, raw value

25,000

15,25013,123

9,403

6,055 5,323 5,303 4,565 3,574 2,771

India China Brazil USA Russia Mexico Indonesia Pakistan Germany Egypt

Mexico: World's sixth Leading Sugar ConsumerCycle 2009/2010

Thousand metric tons, raw value

Source: CNIAA and Ministry of Economy

4Source: CNIAA

I. Mexico leading sugar producer with a large Sweetener Market.

3,55

9

3,266

4,07

7

3,52

9

4,27

5

4,40

6

4,54

3

5,17

4

4,69

9

4,69

6 4,92

4

4,87

2

4,92

8

5,02

4

5,796

5,27

6

5,31

4 5,52

1

4,96

2

4,82

6

5,36

8

4,03

4

3,95

1

3,91

0

4,03

7

4,04

8

3,98

4

3,83

8 4,02

5

4,06

8 4,21

4

4,62

9

4,57

8

4,92

0

4,89

7

4,82

3

5,026

4,58

0

4,56

7

4,95

8

4,35

4 4,39

2

3,100

3,600

4,100

4,600

5,100

5,600

6,100

Mexican Sugar: Production and Consumption Thousand Metric Tons

Production Consumption

1,518

126 47 13

167 151

70 93 1 35

610

110 184

56

181

607

837

1,111

579

477

290

552

155 91

290

947

174

712

1,281

751

1,249

-

200

400

600

800

1,000

1,200

1,400

1,600

Imports Exports

Mexican Sugar Export to USA and the Rest of the WorldThousand Metric Tons

II. North American Regional Market a Reality.

63

Mochis

El Dorado

La Primavera

Puga

Tala

BellavistaEl Molino

A. Saenz

S. M. Naranjo

El Mante

Sn. Fco. Ameca

M. Ocampo

José Ma. Mor.

L. Cárdenas

Santa Clara

Pedernales

Tamazula

Quesería

E. Zapata

Casasano

A. L. Mateos

P. Machado

Pujiltic

Huixtla

El Higo

Zapoapita

Plan de San Luis

04

Azsuremex

La Joya.

Sta. Rosalía

B. JuárezEl Refugio

Calipam

Independencia

Atencingo

US SWEETENER INDUSTRY

MEXICANSUGAR INDUSTRY

5

North American Sweetener market fully integrated.

Since the market opened:

Mexico has exported more than 2,7 millions sugar tons to U.S.

Mexico has imported 1,7 millions tons dry of HFCS from U.S.

Good Coordination and cooperation between Mexican and U.S. Governments regarding sweeteners:

The Administration in each country sugar program consistent with NAFTA obligations.

Mexico is a reliable supplier in the integrated North American Regional Market.

6

II. North American Regional Market a Reality.II a) Mexican Sweetener Market

Source: CNIAA and CONADESUCANote: In the World Agricultural Demand and Supply Estimates (WASDE) on February 9,2011 the HFCS consumption is projected in 1,750 thousand metric tons, dry weight.

168,546

278,

935

304,

476

340,

484

357,

215

258,758

169,651

235,416

349,423

391,

042

407,

075

341,

934

361,

667 46

3,12

0

467,

186

22,218 34,79472,704 96,061

144,558

293,786

224,080

5,915 5,658118,207

272,077

306,

866

442,

551

303,

111

954,

590

962,

971

22,218 34,79472,704 96,061

144,558

462,332

503,015

500,507

560,481

590,100

341,437

175,566

241,074

467,630

663,119

713,940

784,485

664,778

1,417,710

1,430,157

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1991

/92

1992

/93

1993

/94

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

Domestic Production Imports Domestic Consumption

Period without domestic production of HFCS

Antidumping investigationagainst HFCS

20% tax to soft drinks sweetened with sweeteners

different to cane sugar.

Substitution of sugar due to lower HFCS

prices

Projeted

Mexico: Production, imports and national consumption of HFCS, Marketing years 1991/92 to 2010/11 (projected) (Metric Tons, dry weight)

7

II. North American Regional Market a Reality.II a) Mexican Sweetener Market

In the cycle 2010/2011 (to january), Mexico has imported 332,809 metric tons dry weight, 38% up that in the same period in the last cycle.

The production estimated of HFCS in cycle 2010/2011, will increase about 1%.

2009/2010 2010/2011 Proj.

463,120 467,186

954,590 962,971

Production Imports

HFCS Imports and Production, cycles 2009/2010 and 2010/2011Metric tons, dry weight

1,417,710 Metric tons

1,430,157 Metric tons

DomesticConsumption

010

0,00

0

Oct´09 Nov'10 Dec'09 Jan'11 (Preliminary)

39,0

88

40,4

78

37,8

60

38,3

34

38,3

21

38,7

08

38,6

37

39,1

73

57,0

36

82,7

61

60,0

19

91,9

93

70,3

24

83,0

60

54,1

25

74,9

95

Production Imports

HFCS Imports and Production, Metric tons, dry weight

8

Source: CNIAA

II. North American Regional Market a Reality.II a) Mexican Sweetener Market

0

100,000

Oct

´08

Oct

'09

Nov

'08

Nov

'09

Dec

'08

Dec

'09

Jan'

09

Jan'

10

Feb'

09

Feb'

10

Mar

'09

Mar

'10

Apr'0

9

Apr'1

0

May

'09

May

'10

Jun'

09

Jun'

10

Jul'0

9

Jul'1

0

Aug'

09

Aug'

10

Sep'

09

Sep'

10

Oct

´09

Oct

'10

Nov

'09

Nov

'10

Dec

'09

Dec

'10

Jan'

10

Jan'

11

60,7

57

96,1

24

43,3

88

97,8

79

53,0

41

108,

644

36,7

30

92,7

61

38,1

47

95,5

96

42,1

90

119,

152

50,7

17

142,

128

60,6

58

120,

651

62,9

87

144,

640

62,7

56

151,

740

70,6

18

114,

456

82,7

90

133,

939

96,1

24

123,

239

97,8

79 13

0,32

8

108,

644

121,

767

92,7

61

112,

305

HFCS consumption, from Oct´08 to Jan´11 Metric tons, dry weight

*/ p

relim

inar

y

Commercial Year Metric Tons, dry weight2008/2009 664,7782009/2010 1,417,710

2010/2011*/ Projected 1,430,157

9Source: USDA, 2010/2011 forecast

II. North American Regional Market a Reality.II b) USA Sweetener Market

13,533

13,881

13,719

14,160

14,368 14,565

14,127

14,617 14,537

14,50014,300

13,175

12,336

12,873

13,17613,294

12,316

13,295 13,248

12,092

12,343

12,915

14,314

13,475

14,012

14,315 14,433

13,562

14,54314,498

13,350

13,603

14,178

12,000

12,500

13,000

13,500

14,000

14,500

15,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 Proj. 10/11

U.S and Mexico Sugar: Combined Production plus Minimum of U.S. Imports and combined Consumption Thousand Metric Tons, raw value

Combined Production

Combined Production plus Minimum of U.S. Imports*

CombinedConsumption

* Mexico and U.S. Production plus Minimum of U.S. Imports (WTO & CAFTA)

8.48.68.89.09.29.49.69.8

10.010.2

Equi

vale

nt in

mill

ion

shor

t ton

s, ra

w va

lue

Fiscal Year

From its peak in 2002, total HFCS domestic demand through 2010 fell 15.2 percent

HFCS Domestic Demand

10

II. North American Regional Market a Reality.II b) USA Sweetener Market

11

Price SNIIM Refined Sugar, 929.65

Price SNIIM Standard Sugar, 794.11

Price C-16 EUA, 877.43

Price Midwest Beet EUA,1,190.48

550.00

620.00

690.00

760.00

830.00

900.00

970.00

1,040.00

1,110.00

1,180.00

1,250.00

1,320.00

09/2009 10/2009 11/2009 12/2009 01/2010 02/2010 03/2010 04/2010 05/2010 06/2010 07/2010 08/2010 09/2010 10/2010 11/2010 12/2010 01/2011 02/2011

Mexico and U.S.: Behaviour of prices under NAFTA FOB Sugar mill price Oct'09-Feb'11: Mexico (SNIIM standard and refined) and U.S. (C-16 and Sugar beet Midwest)

(Dolars/tons)

Source: Sugar Midwest Beet: Milling and Baking News,C16-ICE;(IntercontinentalExchange):https://www.theice.com/homepage.jhtml and Sugar Mexican Prices standard and refined SNIIM:www.economia-sniim.gob.mx/Nuevo/

DPD-CNIAA

Comercial Year 09/10 Comercial Year 10/11

II. North American Regional Market a Reality.II c) U.S. and Mexico Sweetener Market

Mexico and U.S.: Behaviour of prices under NAFTAFOB Sugar Mill price Oct´09-Feb´11: Mexico (SNIIM standard and refined) and U.S. (C-16 and Sugar beet Midwest)

(U.S. Dollars/Metric Tons)

Commercial Year 09/10 Commercial Year 10/11

12

III. Mexico: Sugar Balance 2010/011 marketing year, advance to January 31, 2011

1/ Preliminary dataSource: CONADESUCA

Total Standard Sugar Refined Sugar2,861,241 1,836,149 1,025,092

918,099 505,275 412,824 1,877,821 1,318,476 569,345

55,321 12,399 42,922 2,568 88 2,480

52,753 12,310 40,443 1,719,836 1,108,956 610,880

342,698 161,728 180,970 241,768 117,915 123,853 241,768 117,915 123,853 220,762 111,346 109,416

1,275 50 1,225 19,730 6,519 13,212

- - - 100,931 43,814 57,117

1,377,138 947,277 429,911 1,321,817 934,829 386,988

55,321 12,399 42,922 2,568 88 2,480

52,753 12,310 40,443 1,141,405 727,193 414,212

Total SupplyBegining StocksProductionTotal Imports

Non quota

Domestic ConsumptionSugar Mills Domestic Sales

QuotaTotal Demand

Total ExportsSugar Mills

DefinitiveNAFTA

Other ImportsNon QuotaQuota

Ending Stocks

October 2010 - January 20111/Concept

Rest of the WorldIMMEX

TemporalyOther Companies