Jenkins Sugar Group Evening Report                                         

Tuesday September 21, 2010

World sugar futures eased today, settling 50 lower in October at 23.79 and from 31 lower in March to one lower in red March. Volume was 155,310 lots, including 26,072 lots of October-based spreads. October open interest dropped by 6,272 lots on Monday’s activity and stood at 89,457 lots prior to today’s trading. Seven trading days remain. Prices spent from the opening until 9:00 a.m. in New York in retracement mode, with the March dropping from an early high at 23.48 to the day’s 22.45 low, and spent the balance of the session consolidating between 23.00 and 22.50 in quiet dealings. On spread, the October/March traded between traded from 129 to 89 over and last at 99 over. The March/May traded from 181 to 149 over and last at 160 over. Technically, March held on its first test of the 10-day average at 22.48, later violating the average in trading to 22.42. Profit taking lifted prices back above the average by session’s end. We look for more work on the downside. Next support beyond is the 20-day average at 21.08.

According to the Indonesian trade ministry, import permits have been issued for an additional 35,000 tonnes of raw sugar for use by the end of November. Also, licenses for 450,000 tonnes of low quality white sugar imports will be tendered during November, with arrivals slated during the January-April 2011 period. Pakistan has decided to waive the duty on raw sugar imports, according to ag ministry. The country is facing a 1.2 million tonne supply shortfall caused by flood damage to the crop. The Pakistan Sugar Mills Association has said millers have asked the government to import a minimum of 500,000 tonnes of raw sugar to meet demand. Crushing for the 2010/11 crop will start in late November. Pakistan consumes 4.2 million tonnes of white sugar per year. China imported 298,597 metric tonnes of sugar in August, down two percent from the previous month, but six times higher than a year earlier. In the first eight months of the year the country has imported 1.0 million tonnes, up 11.4 %. In India, heavy rains have produced damaging floods in Uttar Pradesh and state officials have stated that vast tracts of agriculture land have been affected. The country’s monsoon may not withdraw this week and the weather department has forecast more heavy rain with the potential of further flooding.

In the NAFTA region: US futures prices finished mixed – eight lower in November and 20 higher in January - after a quiet session. On spread, November traded lightly at between 200 and 150 over January and January/March saw even lighter volume trade at 140 over. From Mexico, Carlos Blackaller, the head of the Mexican National Cane Growers Union, stated that a recent string of storms (including, most recently, Hurricane Karl) could result in a 100,000 to 150,000 tonne reduction in Mexican sugar production. Karl crossed the Yucatan before strengthening as it moved into Veracruz. The storm dumped rain on Oaxaca and Tabasco states as well. From our experience, this sort of event many weeks before the start of the harvest do not have to be particularly detrimental to the crop, fattening up cane while lowering yields. It will be some time before it is known how much acreage was damaged or lost.

Regards,

Jenkins Sugar Group, Inc.

(203) 563 6100

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This report has been compiled for general informational purposes only.  While every effort has been made to ensure accuracy, Jenkins Sugar Group, Inc. assumes no responsibility for errors and omissions.