Taiwan buys 96,180 tons of US wheat

The Taiwan Flour Millers’ Association has purchased 96,180 tons of milling wheat to be sourced from the United
States in a tender for the same volume which closed on Friday, European traders said. The tender had sought
shipment in two consignments between August 5-19 and August 22 to September 5.

The August 5-19 consignment comprised 25,500 tons of dark northern spring wheat of 14% protein purchased at
$342.73 a ton fob, 13,080 tons of hard red winter wheat of 12.5% protein bought at $318.68 per ton fob and 13,450
tons of soft white wheat bought at $270.62 a ton fob, traders said.

Seller of the first consignment was Columbia Grain. The purchase has an additional ocean freight charge of $26.20 a
ton for ocean shipping from the US Pacific North West coast to Taiwan. The August 22 to September 5 consignment
comprised 27,050 tons of northern spring wheat of 14 percent protein purchased at $329.89 a ton fob and 17,100
tons of hard red winter of 12.5% protein bought at $315.54 a ton fob.

Seller of the second consignment was TOEPFER International. The second purchase has an additional ocean freight
charge of $28.30 a ton for shipment from the US Pacific North West coast to Taiwan. In its last reported tender on
May 13, the Taiwanese association purchased 110,450 tons of milling wheat to be sourced from the United States
after seeking offers for the same volume. In September 2013, the association signed an agreement to buy 62.5
million bushels, or about 1.7 million tons, of US wheat valued at about $485 million over two years.

SOURCE: REUTERS

India to raise import duty on sugar, promote exports

Import duty on sugar to be raised to 40%

India will raise its import duty on sugar to 40% from 15%, as the government tries to revive business at mills that
owe farmers around $1.84 billion, the food minister said. The climb in import duty will make overseas purchases
nearly unviable for refiners in the world's biggest consumer of the sweetener, hitting shipments from suppliers such
as BRAZIL, THAILAND and PAKISTAN.

Local sugar prices, which had been stifled by rising stockpiles, jumped 1.5% following the announcement and are
likely to rise further if monsoon rains stay subdued as expected in the next few weeks, dealers said. The Food
Minister - Mr. PASWAN told reporters the subsidy on raw sugar exports would be extended until September. India
increased the subsidy for raw sugar earlier this month to boost output and exports. But large-scale exports are
unlikely in the short term, as most of this year's raw sugar output has already been shipped.

India is likely to export more than 2 Million Tons (MT) of sugar in 2014/15 as the top consumer is set to produce a
surplus of the sweetener for the fifth straight year despite chances of reduced rainfall, a commodities executive said
earlier this month.

BOOST TO BIOFUEL:

The government has also decided to raise the mandatory level for blending ethanol in gasoline to 10% from 5%,
Paswan said. Trying to emulate the success of Brazil's booming biofuel industry, India launched its ambitious ethanol

   
blending programme in 2006, but disagreements between sugar mills and oil companies over pricing stymied
progress.

New Delhi is now trying to promote ethanol blending that could help it in reducing its current account deficit and also
boost mills' earnings. Indian mills produce ethanol from molasses, a byproduct of sugar production. The government
is also considering extending the duration of repayments of interest free loans made to mills against excise duty to
five years from three years, Paswan said.

Shares of sugar makers such as BAJAJ HINDUSTHAN LTD, SHREE RENUKA SUGARS, BALRAMPUR CHINI MILLS and
DHAMPUR SUGAR MILLS jumped more than 10% following the government announcement in a weak Mumbai market.

SOURCE: REUTERS

+++

In a move that could lead to rise in the price of sugar, the government has decided to hike the import duty on it and
to provide an additional interest- free loan of up to IRS 4,400 crore to pay dues to cane growers.
It was also decided that the export subsidy will be extended till Sept this year to give relief to the sugar industry,
which owes IRS 11,000 CR to cane growers largely in Uttar Pradesh. Efforts will be made to implement mandatory
5% ethanol blending with petrol and subsequently achieve 10% blending.

"We have taken four key decisions. We have decided to extend the interest-free loan given against excise duty paid
by sugar mills for five years instead of three years," Paswan told reporters after the meeting.

Industry Body Indian Sugar Mills Association (ISMA) hailed the decision saying this will improve cash-flow of millers
and help clear cane arrears.

"There is a need to improve the sugar prices to allow mills to at least cover their cost of producing sugar. Sugar
stocks registered a sharp increase following the government's decision.

+++

INDIA: Sugar sector may see turnaround this year:

The sugar sector is likely to see a turnaround this financial year, owing to an estimated increase in cash flow,
following the export incentive scheme for raw sugar being extended till Sept 2015. For every ton of raw sugar export,
the government offers IRS 3,300 as subsidy to sugar mills. For this financial year, the Centre has set an overall export
target of 4 Million Tons (MT).

Back-of-the-envelope calculation shows the proposed extension in export subsidy will increase the sugar sector’s cash
flow by IRS 13,200 CR. Of this, IRS 1,200 CR is estimated to go directly to farmers, while the remaining IRS 12,000
CR will go towards sugar mills, depending on their subsidy-refund claims. “India’s sugar sector will turn around this
year, provided mills are able to export the entire allocated quantity of 4 MT at prices higher than the prevailing rates
in Indian markets,” said ABINASH VERMA, director-general, Indian Sugar Mills Association.

BRIGHT OUTLOOK 

• Export subsidy extension to increase sugar 
sector’s cash flow by IRS 13,200 crore 
• Of this, IRS 1,200 crore will go to farmers directly; 
mills will get the remaining IRS 12,000 crore 
   
 • Global prices to remain favorable for export, 
owing to rising demand 
• Sugar sector recorded a loss of IRS 3,200 CR in FY‐
14 
• This year, sugar mills’ dispatches are set to stand 
at the production figure of 24.2 MT 

Through the past few months, sugar prices have been volatile in global markets, making exports viable. After
touching an eight week low of 16.67 cents, ICE raw sugar July futures rallied 2%, while Liffe white sugar August
futures surged two per cent to close at $465.2/ton on Friday. Prices rose as the number of ships waiting to export
sugar from the ports of major grower Brazil increased about 50% from the previous week, indicating a rise in sugar
demand.

At prices moderately higher than current ones, exports from India will be feasible. Data compiled by BS Research
showed the sugar sector’s overall losses for the year ended March this year stood at about Rs 3,200 crore, against a
profit of Rs 20 CR in the year-ago period. “India’s sugar sector is a beaten-down sector. The sugar sector has been an
underperformer in the last few years due to un-favorable government policies. But with the extension in export
subsidy scheme, the sector will blossom this year, with debt–free companies benefiting the most,” said HARISH
VASUDEVAN, strategist, SVS Securities.

This year, sugar mills’ dispatches are set to stand at the production figure of 24.2 MT. At the beginning of the new
sugar season, India’s stock is estimated to be 1.8-2 MT less than last year’s. But a surplus of 1.5-2 MT can be
exported.

The pace of sugar exports had slowed because of the unexpected reduction of export incentive—from IRS 3,300 a ton
to IRS 2,277 a ton—by the food ministry. The government has, however, restored the incentive to IRS 3,300 a ton.
Vasudevan said the government had to implement reform measures to bring the sugar sector on track. Also, all
cyclical sectors, including sugar, have seen favourable policy decisions after long, Vasudevan says, adding the sector
will see surprises this year on the profit and share price fronts.

+++

India Sugar Production Down 7% Y-o-Y in Six Months:

Apr 2014 

India produced 21.5 Million Tons (MT) of sugar till 31st March 2014 which is down from 23.1 MT sugar produced at
the same period last year. Lower cane yield and recovery of sugar from cane specially in UP led the production
decline. Also, there are some yield loss in cane reported in Maharashtra which ultimately decrease the sugarcane and
sugar. Low sunshine curb the photosynthesis process in sugarcane which ultimately decrease the yield in June-Aug
period as reported.

Out of total, Maharashtra produced 7.01 Million Tons of sugar with an average recovery of 11.3%. Last year,
Maharashtra mills produced 7.73 MT of sugar at the same period. As far as Uttar Pradesh is concerned, mills in UP
produced 5.8 million tons of sugar till date with an average recovery of 9.21%. However, Mills in UP produced 6.7
million tons of sugar at the same period last year.

On the contrary, Karnataka sugar production increase Y-o-Y and produced 3.75 million tons of sugar till 31st March
which was 3.36 million tons at the same period last year.

If we consider present sugar production figure compared to last year, sugar production likely to reach 23.5 million
tons in the present marketing year till September 2014.