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Blue Mutombo news, Indian sugar association superintendent Vivek Saraogi said, as the second

largest sugar-producing country, estimated Indian exported sugar will reach 1.5 million to 2 million

tons this year.

It is estimated that in 2010-2011 sugar year, Indian sugar production was 25.50 million tons. The

stock at the beginning of sugar year was 5.2 million tons, so the domestic sugar supply reached 30.7

million tons, estimated in 2010-2011 sugar year, Indian sugar supply will excess.

In the past two weeks, the number of Indian exported sugar uncertain caused the price of refined

sugar rose 4.7%, at the same time raw sugar also rose 3.3%. Agriculture Minister Sharad Pawer said

that the Indian government will decision about whether lift the sugar export control on the third

week of December. India will allow to shipment of monthly to export, the exported number was

based on production.

Indian Agriculture Vice Minister K.V. Thomas said, if new sugar year?s production reach 24.50

million tons and domestic sugar consumption is between 22.5 million tons to 23 million tons, the

new sugar year will have enough to meet domestic demand.

Welcome To The World ISEC - The Gateway To Indian Sugar Exports.

India is the largest producer of sugar in the world and produces around 18.5 million tones of white

plantation sugar per annum. Sugar industry is the second largest manufacturing industry in India.

About 500 thousand people are directly employed in the sugar industry. Including farmers and theirfamily members, around 45 million people constituting 7.5% of the rural population of India, depend

on sugar industry for their livelihood. The industry contributes about Rs. 16 billion ($328.5 mn) to

the Central and State exchequers.

India is also the largest consumer of sugar and consumes around 16 million tones of sugar per

annum.

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Sugar Production, Consumtion, Export and Import in India

Year (Oct. - Sept.) Opening Stock Production Consumption Export Import Closing

Stock

(Figures in Million Tonnes)

1994-95 3.09 14.64 12.27 0.06 0.20 5.59

1995-96 5.59 16.45 13.12 1.02 - 7.90

1996-97 7.90 12.91 13.80 0.42 - 6.52

1997-98 6.60 12.86 14.71 0.07 0.94 5.60

1998-99 5.60 15.54 15.22 0.02 1.00 6.90

1999-00 6.90 18.20 16.10 0.06 040 9.34

2000-01 9.34 18.51 16.20 0.98 - 10.66

2001-02 10.66 18.53 16.78 1.09 - 10.66

2002-03 11.32 20.14 18.38 1.50 0.12 11.69

2003-04 11.69 13.80 17.28 0.23 0.55 8.53

2004-05

(Est.) 8.53 12.50 17.50 0.03 2.60 6.10

Over the years the sugar production fluctuated noticeably. During the years of shortages India

turned a net importer. Thus the overall scenario has been that of marginal export of sugar. A High

Powered Committee was constituted to study the matter and after examining the matter in depth, it

recommended total liberalization of the sugar sector to ensure steady and stable growth in

production. Government of India has accepted this recommendation and steps are being taken in

this direction.

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Excessive availability of sugar this year is unlikely to deter Indian exporters to intensify supplies to

global markets and increase realisation this year. Reeling under severe financial stress, Indian sugar

companies are looking for opportunities for higher realisation from overseas markets with

permission from the local government.

A report released by the Rabobank forecast the global sugar production to outpace demand for the

second consecutive year by six to eight million tonnes (mt) for 2012-13. Another report by Barclays

Bank also estimates global markets to remain in surplus to the tune of 5.4 mt, despite lower

production in Brazil.

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Barclays estimates global 2011-12 sugar production will grow 4.2 per cent year-on-year, due to

higher-than-expected output in Europe, as well as in key producing countries, like Australia, India

and Thailand, as favourable weather and prices have led farmers to boost plantings and help offset

the decline in Brazil. The global sugar output in 2011-12 is projected at a record 173 mt.

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This will surely restrict Indias opportunity to access global markets at high prices. But, much would

depend on sugar output and quantum of direct conversion of ethanol from cane, said a senior

official from a leading producing company.

Brazils sugarcane production is expected to rise to 520 mt in 2012-13. The country, crushed around

492 mt in 2011-12. Barclays forecast Brazilian sugar production to reach only 35.8 mt in 2011-12, a

decline of 5.8 per cent y-o-y.

About a month ago, sugar price in the global markets surpassed $700 a tonne, which plunged to

$650 a tonne now. The current prevailing price in the Indian market still offers attractive opportunity

for supply to overseas market, the official said.

Presently, the price of sugar remains fairly well supported, largely owing to perceived shortage of

export availability against the import demand. The total global cane production is estimated at 522

mt. According to Indias sugar companies, output is expected to be more than 26 mt and

consumption 22 mt.

The government of India had allowed one mt of exports under open general licence so far.

Speculation is rife the government will allow another one mt of exports in the review meeting

scheduled next week.

An increase in Indias exportable surplus and strong production prospects in key Northern

Hemisphere producers will limit the upside on prices. The important questions for the sugar market

in 2012 will be whether cane output in Brazil recovers after a production setback, when and how

much Brazilian cane will be converted into ethanol instead of sugar, and the outlook for Indian sugar

exports.

On the back of higher production in major sugar growing countries, global prices are likely to remain

under pressure during 2012-13. On the Inter-Continental Exchange (ICE), sugar for March delivery

traded at 23.94 cents on February 3. While, on Indias National Commodity and Derivatives Exchange

(NCDEX), sugar for February delivery traded at Rs 2,914 on February 6.

On the National Multi Commodity Exchange, sugar for March traded down 0.345 during the last

week from Rs 2,891 a quintal to Rs 2,881 a quintal. Sugar for March delivery in ICE rose 0.16 cents to

24.86 cents per lb on February 21. On the NCDEX, the commodity traded at Rs 2,869 a quintal.

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According to Barclays, a key influence of the market outlook in 2012 will be the manner in which the

price of ethanol will influence the decision of Brazilian mills to allocate cane to produce sugar or

ethanol. The end of US government subsidies and trade barriers to Brazilian ethanol bodes well for

Brazilian ethanol producers in the long term and could prompt renewed investment. But exports areunlikely to increase in the near term due to Brazil struggling to meet its domestic demand.