June FlashMarket. SUGAR n 11 and n 5 - Prices. Raw and white sugar prices over the last two weeks in USD/t (daily prices)

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1 Bearish sentiment still prevails despite recent technical price-increase World sugar prices have globally appreciated over June. Although the price-increase (see table below) on the world raw sugar market seems quite "technical" (p.2) and in relation with the expiry of the "July" contract, rains in Brazil (p.9) have undeniably played a bulish role. Considering the strong depreciation of the Brazilian Real vis-à-vis the US dollar (p.7), Brazilian sugar producers have supposingly increased their margins for VHP exports in June. On the white sugar market, prices benefited from an increase of the demand as Ramadan is now approaching and due to start on July 10, Overall, the white sugar premium (Aug/Jul) has been quite steady at a level close to 110 USD/t. On the enregetic markets, oil prices (p.4) started to increase by the end of june in relation with political tensions occuring in Egypt. In the US, gasoline prices (p.4) slightly decreased and are currently quoted at 72 USD/hl against 74 USD/hl by end May. Considering that corn prices (p.5) were relativelystable over June at around 260 USD/t, ethanol producers' margins declined with US ethanol (p.4) now traded at 65 USD/hl against 70 USD/hl a month ago. In Brazil, anhydrous ethanol prices (p.4) continued to decrease over the past month and are now slightly below the 60-USD/hl level (against 62 USD/hl by end May). In the meantime, hydrous ethanol slightly increased to 52,6 USD/hl. On other agricultural markets (p.5), while soybeans increased to 560 USD/t against 552 USD/t a month ago, wheat prices declined to below 250 USD/t due to good prospects for the coming harvest in a number of countries. It also has to be noted that by-products (p.6) -both beet pulp and cane molasses -decreased in June. Last but not least, freight prices (p.8) significantly increased in june while international fertilizers prices (p.8) continued to decline and are now close to their lowest level since Fundamentals of the market: page 9 & 10 & 11 SUGAR n 11 and n 5 - Prices Settling date week week Refined sugar price - Euronext n 5 (USD/t) Aug 13 -W Oct 13 -W Dec 13 -W Mar 14 -W Raw sugar - ICE n 11 (USD/t) Jul 13 -R Oct 13 -R Mar 14 -R May 14 -R Raw sugar - ICE n 11 (cts/lb) Jul 13 -R Oct 13 -R Mar 14 -R White premium (USD/t) Aug-Jul USD/t Raw and white sugar prices over the last two weeks in USD/t (daily prices) Aug 13 -W Oct 13 -W Dec 13 -W Mar 14 -W Jul 13 -R Oct 13 -R Mar 14 -R May 14 -R Front term sugar n 11 and n 5 prices since october USD/t Raw sugar #11 Refined sugar #5 FlashMarket V6.0 - Contact Editor: apatry@cgb-france.fr OR wabcg1@gmail.com - Tel. : / Fax:

2 SUGAR n 11 and n 5 - Open interest & Funds positions Average weekly Open Interest per settling date contract (1 lot= 50t) 500 n 11 Raw sugar 40 n 5 White sugar lots lots Jul 13 -R Oct 13 -R Mar 14 -R May 14 -R week week Aug 13 -W Oct 13 -W Dec 13 -W Mar 14 -W week week n 11 Average weekly open interest n 5 Average weekly open interest (1000 lots) Week 24 Week 25 Diff (lots) Diff (%) (1000 lots) Week 24 Week 25 Diff (lots) Diff (%) Jul 13 -R % Aug 13 -W % Oct 13 -R % Oct 13 -W % Mar 14 -R % Dec 13 -W % May 14 -R % Mar 14 -W % Total % Total % Net Long Funds position (NLFP), Open Interest (OI) and n 11 front term prices since october - source CFTC USD/t Open interest Net long funds position #11 prices (USD/t) World Association of Beet and Cane Growers 2

3 SUGAR n 11 - White premium & Prices in local currencies White premium on near terms since october % Contract n 11 - Price changes (%) since october in local currencies 0% Weeks -20% -40% USD Australian Dollar AUD Brazilian Real BRL Euro EUR Indian Rupee INR Mexican Peso MXN South African Rand ZAR Contract n 11 prices and changes Sugar prices in currency Sugar prices in currency Currencies End May End June In currency In % USD % -28.6% Australian Dollar AUD % -32.7% Brazilian Real BRL % -10.8% Chinese Yuan CNY % -35.4% Euro EUR % -20.2% Indian Rupee INR % -10.8% Mexican Peso MXN % -30.8% Russian Rouble RUB % -21.9% Thai Bhat THB % -33.5% South African Rand ZAR % -4.4% Sugar prices and currencies data are based on weekly average. World Association of Beet and Cane Growers 3

4 ENERGY MARKETS - Ethanol & Crude oil & Gazoline USD / barrel WTI Brent USD/L 1.0 Ethanol ex-distillery prices in SAO PAULO since october Ethanol SAO PAULO - Anhydrous Ethanol SAO PAULO - Hydrous USD/L 1.0 US Ethanol & Gasoline prices on the short term since october Ethanol US - CBOT Gasoline US - RBOB Oil, gasoline & ethanol prices and changes Price in USD Price in USD Products End May End June In USD In % Ethanol CBOT (USD/l) Ethanol CBOT (USD/gal) % 31.4% Oil - WTI (USD/barrel) % 35.7% Gazoline RBOB (USD/l) % 54.2% No data available Sugar #11 (USD/t) % -23.6% Products End May End June In USD In % Ethanol SAO PAULO (USD/l) - Anyhydrous % 2.7% Ethanol SAO PAULO (USD/l) - Hydrous % 4.8% Products End May End June In USD In % Ethanol EU - Rotterdam T2 (USD/l) % -98.8% World Association of Beet and Cane Growers 4

5 GRAINS MARKETS - Corn, Soybeans, Wheat & HFCS 900 U.S. prices for HFCS 55% fructose, Midwest markets 800 Price changes June 2012 June 2013 HFCS 55 - USD/t HFCS 55 - cts/lb Dry weight, monthly averages, source Milling and baking news. USD/t Corn, Soybeans and Wheat futures prices in CBOT since october - USD/t USD / t Wheat CBOT Corn CBOT Soybeans CBOT Sugar n 11 Corn, soybeans and wheat prices and changes Front term Front term Products End May End June In USD In % In % since October Corn (CBOT) USD/t cts/bsl % 94.1% Soybeans (CBOT) USD/t cts/bsl % 63.5% Wheat (CBOT) USD/t cts/bsl % 49.7% World Association of Beet and Cane Growers 5

6 BY-PRODUCTS - Molasses & Beet Pulp Cane molasses (Ex-Tank Amsterdam) and beet pulp pellets prices since 2006 (Netherlands and France) USD/t Amsterdam Ex tank Molasses prices Netherlands Ex silo beet pulp pellet prices France Ex factory beet pulp pellet price Monthly averages - Source: LIE and web agri Molasses and beet pulp pellets prices and changes Commodity Commodity Amsterdam Ex tank Cane Molasses Netherlands Beet Pulp Pellets France Beet Pulp Pellets Products Products April May In USD and EUR In % USD/t % -3.2% EUR/t % 10.6% USD/t % 120.4% EUR/t % 151.6% April May In USD and EUR In % USD/t % 107.4% EUR/t % 136.3% World Association of Beet and Cane Growers 6

7 EXCHANGE RATES Currencies' changes in percentage since October - weekly based. 40% 30% 20% 10% 0% Weeks -10% -20% -30% Australian Dollar AUD Brazilian Real BRL Euro EUR Indian Rupee INR Mexican Peso MXN South African Rand ZAR Currencies changes Currencies in USD Currencies in USD Currencies End May End June In USD In % Australian Dollar AUD % 15.2% Brazilian Real BRL % -21.4% Chinese Yuan CNY % 10.5% Euro EUR % -11.1% Indian Rupee INR % -21.8% Mexican Peso MXN % 2.2% Russian Rouble RUB % -9.6% Thai Bhat THB % 6.8% South African Rand ZAR % -25.9% If the difference is negative, USD has appreciated against the targeted currency over the period. On the contrary, if the difference is positive then USD has depreciated against the targeted currency over the period. World Association of Beet and Cane Growers 7

8 FREIGHT - Baltic Indexes Baltic dry, Baltic Panamax and Baltic Capesize indexes since October - daily based 3,000 2,000 1,000 0 Baltic dry Baltic panamax Baltic capesize Baltic Supramax Baltic indexes and changes Freight indexes Freight indexes Indexes End May End June Index In % Baltic dry % -52.2% Baltic Supramax % -51.0% Baltic panamax % -58.6% Baltic capesize % -35.5% USD$/t. Fertlizers prices since October (data from the World Bank) DAP Phosphate rock Pottasium chloride TSP Urea, E. Europe, bagged Explanations : DAP (diammonium phosphate), standard size, bulk, spot, f.o.b. US Gulf Phosphate rock (Moroccan), 70% BPL, contract, f.a.s. Casablanca Potassium chloride (muriate of potash), standard grade, spot, f.o.b. Vancouver TSP (triple superphosphate), onwards Tunisian, granular, f.o.b. Urea, (Black Sea), bulk, spot, f.o.b. Black Sea (primarily Yuzhnyy) World Association of Beet and Cane Growers 8

9 MARKET OVERVIEW - The Grower Dashboard Comparison of futures prices for sugar, ethanol, crude oil, grains Commodity Commodity Porducts End May End June In USD In % Sugar (#11) USD/t Cts/lb % -23.6% Sugar #5 USD/t % -16.6% Corn (CBOT) USD/t cts/bsl % 94.1% Soybeans (CBOT) Wheat (CBOT) Ethanol USD/t cts/bsl USD/t cts/bsl EU spot (USD/l) % -98.8% US (USD/l) % 31.4% SAO PAULO (USD/l) Anhydrous 1.2% -3.3% 63.5% 49.7% % 2.7% Crude oil USD/barrel % 35.7% Freight supramax Index % -51.0% IN BRIEF1/3 About the Brazilian campaign in Centre/South Heavy rains in parts of Brazil's Centre/South (CS) cane region slowed the crop's harvest and reduced the amount of cane processed by mills in the second half of June 2013 to Mt(see table below). Thecrushed sugarcanewas 17.5% less than the Mt crushed in the first half of June and also 8.2% below the Mt of cane crushed in the same period in 2012/13. Mills in the CS have now crushed Mt of cane since the season started, up 41.0% from Mt at this time last year but 16.1% below the Mt crushed at the same time in 2010/11 when full season output reached Mt, which compares with a full season projection of 590 Mt for 2013/14. Sugar production in CS mills declined 16.4% in the second half of June from a year earlier, to Mt, tel quel, from 1.795Mtwhile ethanol production increased 6.0% to bln litres from bln. This brought total sugar production since the beginning of the season to Mt, up 33.0% from Mt at this time a year ago, while ethanol production is up 57.9% at bln litres from bln. In the second half of June, the production mix was 41.9% sugar and 58.1% ethanol, compared with 47.8% for sugar and 52.2% forethanol a year earlier. For the season through July 1, the sugar allocation now also stands at 41.9%, down sharply from 46.2% by this time last year. Cane quality, measured as the amount of recoverable sugars per tonne of cane, is up 4.1% so far this season at kg/t cane from kg/t cane a year ago. Meteorologists expect wet weather to clear over the main cane belt this month, which will allow mills to resume production of sugar and ethanol at a faster pace. World Association of Beet and Cane Growers 9

10 NEWS IN BRIEF IN BRIEF (Source : FO Licht Sugar Daily) 2/3 Australia: Canegrowers Australia has reduced its 2013/14 sugarcane crop forecast by 1.6% to 30.5 Mt from a previous 31.5 Mt estimate. This compares with 30.4 Mt last year. The organization added that the southern region around Bundaberg and Isis endured widespread flooding at the start of thisyear which wiped out the young cane on many farms with crop disease also contributing to the reduced forecast. Brazil: According to Datagro,sugar production in Brazil's key Centre/South region will increase to 35.3 Mt, tel quel, in the current 2013/14 season from 34.1 Mt a year ago. Datagro also increased its forecast for the region's cane crush in the current season to Mtfrom from an earlier projection of Mt issued in May.Datagro pointed out that additional crush capacities are needed so that Brazilian producers have flexibility in their sugar-ethanol mix. Plinio Nastari, the head of Datagro, said he expected local mills to crush sugar at close to their maximum capacity this season in order to keep costs as low as possible. Nastari estimated that the average cost of raw sugar production in Brazil was now 18.3 cts/lb, adding that raw sugar prices would need to trade for a sustained period at 5 to 8 cts/lb above the cost of production of marginal Brazilian producers in order to stimulate investment in new capacity. In the meantime, Datagro forecast ethanol production in the CS in 2013/14 will reach 25.5 bln litres. It was fnally added that if 55.5 Mt of cane is to be crushed in the smaller North/Northeast region of Brazil, Brazil will crush a total of Mt of sugarcane this year. Unica is maintaining its cane output prediction for the 2013/14 crushing season to Mt despite heavy rains that slowed cane harvest in June (see p.9). The rain is expected to improve plant development later during the 2013/14 harvest season which should consequently make up for current delays. Meanwhile, UNICA pointed out that the country's sugar and ethanol industry needs to invest in new processing capacity to keep upwith rising sugarcane harvests. The industry currently has capacities to process about 700 Mt of cane, but if the cane harvest continues to grow at the current pace, cane output could reach that limit in about two years. It was added that although 40 plants have closed since 2008, with 46 Mt of crushing capacity, another 120 Mtofcrushing capacity have been added in the same period. China: China produced 154,500 tonnes of cane sugar, white value, in May 2013 (thechinese beet campaign was already concluded in April) according to China Sugar Association (CSA) data.this brought total sugar production in the 2012/13 (Oct/Sep) season so far to Mt, up from Mt produced in the same period a year ago. The CSA had initially forecast the country to produce 14.0 mln tonnes of sugar, but adverse weather conditions put the target out of reach. Cane sugar production increased to Mtfrom Mt while beet sugar output rose to Mt from Mt last year. Only one mill is still operational in the second-largest sugar producing province, Yunnan, which means that the numbers are practically equivalent to the "full-season" total. Output in top producer Guangxi rose to Mtthis season from Mta year ago, while sugar output in Yunnan reached Mt by the end of May, up from Mt a year ago. Cuba: According to state media report, the country produced 1.51 Mt of raw sugar in 2012/13, up 8% when compared to 2011/12 season but short of the 1.68 Mt forecast, state media reported. Cuban television blamed obsolete mills and machinery among other factors such as Hurricane Sandy and poor management for the lessthan-expected performance. Sandy damaged mills and flattened cane in eastern Santiago de Cuba and Holguin provinces in late October, which together produced 70,000 tonnes less than originally thought. Only 8 of 56 mills in the country were built after the 1959 revolution, the last in the 1980s. Brazilian builder Odebrecht SA became the first foreign company since the revolution to produce sugar when it began administering one of the eight mills this year. Administration agreements with the other seven mills are now open for negotiations, according to the Cuban Chamber of Commerce. At least three other companies are negotiating management agreements, according to two different company representatives. EU: The EU Council, Parliament and Commission finally agreed on the bloc's Common Agriculture Policy for This agreement between the different European institutions includes the abolition of EU sugar production quotas at the end of the 2016/17 (Oct/Sep) sugar marketing year on September 30, This represents a "compromise" between the Commission's suggestion of 2015 and the Parliament's demand to keep quotas until 2020and matches the EU Council's initial negotiating position. India: The Indian Sugar Mills Association (ISMA) expects the country to produce 23.7 Mt of sugar, white value, in the upcoming 2013/14 (Oct/Sep) crushing season, down 5% from 25.0 Mt produced in 2012/13. It is estimated that the total area under sugarcane in 2013/14 will be about 5.15 Mha,down 1.5% from last year's 5.23 Mha according to satellite imagery taken in June 2013 and field surveys conducted by ISMA. The cane area in top producer Maharashtra is likely to decline by about 12.5% from a year ago due to a drought which affected planting of the cane to be harvested in October 2013 (this sugarcane was originally planed in July and August 2012). Large swathes of western and southern India suffered the worst drought in nearly four decades last year due to lower rainfall during the summer monsoon season. The southern states of Karnataka and Tamil Nadu arealso expected to have lower cane areas this year compared to 2012/13, ISMA said. Karnataka's cane area is also seen down 8% when compared to 2012/13, while TamilNadu is the worst-affected state with a 15%-16% decline in area. ISMA pointed out that Tamil Nadu received deficient rains both in the southwest monsoon (Jun-Sep) as well as the northeast monsoon (Oct-Dec). On the other hand, the second-largest sugar producing state of Uttar Pradesh will have record high sugarcane acreage in 2013/14,which is 3.1% above last year. Despite huge cane arrears of INR 40 bln as of July 2013, substantially higher cane prices in comparison to competing crops like wheat and rice have not only kept farmers in cane, but even attracted more farmers from other crops, according to ISMA. Other states likey Haryana, Bihar and Madhya Pradesh are also expected to record higher cane acreage than in 2012/13. Overall and given that ISMA sees domestic consumption at 23.5 Mt in 2013/14, the country will be in surplus for the fourth consecutive season, director general Abinash Verma said. Opening stocks on October 1, 2013 were pegged at 8.0 Mt, 2 Mt above the government's target. India will impose a 0.01% tax on the trading of somecommodity derivatives from July 1, according to a government statement issued on June 20. Finance Minister P. Chidambaram had announced the tax in his budget speech in February but thereafter had not issued a formalorder to prepare a list of commodities on which the tax would apply. The government has exempted agriculture commodities such as wheat, cotton and pepper from the tax but imposed it on processed products such as sugar and guar gum. The tax is aimed at restoring parity with stock traders, who have been paying a similar tax, according to Finance Ministry officials. India's Central Board of Excise and Customs issued a notification on July 9 to implement a hike in the import duty on both raw and white sugar to 15% from 10% with immediate effect, aiming to stem a recent flood of imports which have been pressuring indian sugar domestic prices. Mauritius: According to the Mauritius Chamber of Agriculture, the country's sugar output is expected to rise 3.8% to 425,000 tonnes in 2013 from 409,200 a year ago due to favourable weather. Provisional data showed a reduction in land abandonment compared to the last five years, the Chamber added. Mauritius has been losing about 2,000 ha of sugarcane fields annually as small planters turn their back to sugar due to falling profitability. Mexico: As of July 6, the country has produced a total Mt of sugar,accounting for sugar campaign. This is significantly up from the Mt produced in 2011/12. As of July 6, there were five mills still operational, down from seven in the previous week and compared with a season total of 55. The cane yield increased to t/ha so far this season from t/ha year ago, while the sugar recovery rate increased to 11.34% from 10.92% (see tablebelow). World Association of Beet and Cane Growers 10

11 NEWS IN BRIEF IN BRIEF (Source : FO Licht Sugar Daily) 3/3 Russia: According to the Russian Sugar Producers Union data,the first sugar beet test carried out on July 1, showed an average root weight of 123 grams, matching last year's record result and exceeding the five-year average of 92.8 grams. Plant density increased to 89,000 per ha from 87,000 last year, which leads to a "theoretical" beet yield of t/ha. This yield exceeds last year's record result of t/ha at this time of year and shows that the beet in the ground has gotten off to a very promising start. Thailand: According to the Office of the Cane and Sugar Board (OCSB),the country's 2013/14 sugarcane production mayrise to around 110 Mt, leading to around 11 Mtof sugar, tel quel, to be produced over the campaignthat is due to start in october Thailand produced Mt of sugar from 100 Mt of cane in 2012/13, significantly above an initia OCSB forecast of 9.4 Mt which was raised to 9.7 Mt towards the tail end of the crushing season. The OCSB added that the country is likely to raise the quota for domestic consumption to Mt for 2012/13 from the 2.5 Mtset earlier due to increasing demand. USA: The USDA has issued its "July " projections for the coming US sugar campaign that is due to start on October 1, When compared to previous "June" estimate, USDA has slightly increased the level of the expected domestic sugar production. In the meantime, US sugar imports have been significantly revised downwards therefore leading to a substantial decrease of ending stocks (see table below / all figures expressed in shorttons / reminder: 1 short ton = 0,907 metric ton). As the bulk of nearly $700 mln in federal loans to US sugar processors approach an August 1 due date, the US Department of Agriculture (USDA) is stepping up its effort to prevent a wave of defaults as it expanded the types of import quotas it will accept in exchange for sugar it plans to purchase from US growers. The USDA said that it would also accept import quotas granted to Colombia and Panama under the free-trade agreements the US has with those nations. That's a total of 57,370 tonnes of sugar issued in the current 2012/13 (Oct/Sep) marketing year. Taking back these certificates would keep additional imported sugar from entering the country, USDA officials said. One other option still available to the USDA is to buy domestic sugar under a program that stipulates any purchased sweetener tobe sold to US ethanol producers. The USDA is expected to announce on July 1 whether it will purchase sweetener under that program. Given that domestic ethanol producers are not readily equipped to process sugar -most use maize as a feedstock -the USDA expects to sell any sugar purchased under that program at a 6-7 cents/lb for the sugar acquired cents/lb. The White House budget office released the "sugar-for-ethanol" program, formally known as the Feedstock Flexibility Program (FFP), to the US Department of Agriculture (USDA) on June 28. That paves the way for the USDA to begin purchasing sugar ahead of forfeitures to sell to ethanol producers. Some analysts are however sceptical that USDA can implement the program in time to prevent forfeiture on $620 mln in outstanding loans where sugar was used as collateral. The losses on the sugar could begin at the end of July, when price support loans expire and processors can begin to forfeit sugar, according to USDA data. The US Department of Agriculture (USDA) bought 91,238 t of sugar from domestic producers in its first direct intervention on the sugar market in 13 years. It paid $43.8 mln for the sugar, exceeding a goal of $38 mln announced earlier. USDA exchanged the sugar with domestic refiners for import credits worth 299,153 t. However, market participants do not think this will be enough to stave off a potential wave of defaults on $600 mln in outstanding federal loans to US sugar processors that begin to come due August 1. By mid-june, the Senate passed a bill that proposed a $4 bln cut through modest reforms to the major US anti-hunger program. However, Republican budget-cutters joined Democratic defenders of food stamps to deal a shocking defeat to the $500 bln farm bill backed by Republican leaders in the House of Representatives. All but two dozen Democrats in the House voted against the bill. The biggest surprise was that about one quarter of the Republican majority also voted no, in most instances because they wanted deeper cuts to food stamps and other programs than proposed. The vote undermined hopes of enacting a farm bill before the current stop-gap law expires. Without a new law by September 30 or extension of current law, government farm support rates will revert to high levels guaranteed by an underlying 1949 law. Food stamp cuts are the major issue for the farm bill. The House bill called for the largest cuts in a generation -$20 bln -that would disqualify 2 mln poor Americans. Democrats said it set unduly harsh work rules and gave states incentives to cut off recipients, while Tea Party-backed Republicans wanted even steeper cuts in food stamps. All but two dozen Democrats in the House voted against the bill. The biggest surprise was that about one quarter of the Republican majority also voted no, in most instances because they wanted deeper cuts to food stamps and other programs than proposed. The vote undermined hopes of enacting a farm bill before the current stopgap law expires. World Association of Beet and Cane Growers 11