### THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY

USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT

POLICY

Date:

GAIN Report Number:

Approved By:

Prepared By:

Report Highlights:

This report updates BR110006 and BR110011. Brazil’s MY 2011/12 sugarcane crop is estimated at

558 mmt, down 10 percent from MY 2010/11 (620 mmt) due to several weath er related

problems. Approximately 48.5 percent of the crop should be diverted to sugar, up 2.55

percentage points relative to MY 2010/11 due to continued strong international demand for sugar.

Total exports for MY 2011/12 are forecast at 23.8 mmt, raw va lue, down 2 mmt from the previous

season, due to lower availability of the product. Sergio Barros, Agricultural Specialist Frederick Giles, Di rector

Agricultural Trade Office, Sao Paulo 

# 2011 Sugar Semi

- annual Brazil BR110016 10/3/2011 Required Report

- public distribution

### Commodities:

Production:

Sugarcane Production, Area and Yield

During marketing year (MY) 2011/12 (May

- April), the Agricultural Trade Office (ATO/Sao Paulo)

estimates total Brazilian sugarcane production at 558 million metric tons (mmt), down 62 mmt

from the previous season (620 mmt).

Sugarcane production in the center

- south (CS) has been adjusted to 490 mmt, down 12 percent

from MY 2010/11 (557 mmt), according to updated industry information. Several factors have

contributed to this sharp decrease in the size of the crop including lower renewal rates in the fields

leading to lower agricultural yields, lower volume of cane not ha rvested from the previous year

(“cana bisada”). The dry weather during April

- August 2010 and May 2011 negatively affected

stock development. There was also frost and blossoming present in sugarcane fields in several

growing regions. The harvest is likel y to end in early December, sooner than normally expected.

The North

- Northeast (NNE) is expected to crush 68 mmt of sugarcane, up 5 mmt from the

previous season due to good weather conditions. The crush begun in August for minor producing

states and the harvest should extend though March.

No official forecast has yet been made with regard to the MY 2012/13 crop in the CS, however

preliminary projections from industry sources place next year’s crop between 520 and 540 mmt.

According to the Sugar an d Alcohol Millers Association of Sao Paulo State (UNICA), 375.1 mmt of

sugarcane were crushed in the CS from March through September 16, down 10 percent compared

to the same period in 2010. UNICA reports that 23.1 million tons of sugar, tel quel, and 15.4

billion liters of ethanol were produced through September 16, quite below 2010 levels (25.1 million

tons of sugar and 18.8 billion liters of ethanol). These numbers also show that more sugarcane

has been diverted toward sugar production (48.1 percent com pared to 45.3 percent in 2010).

The following tables show monthly sugarcane crush data for the state of Sao Paulo and the CS

region for the 2007/08 to 2011/12 crops, as reported by UNICA. Sao Paulo represents

approximately 65 percent of the CS productio n. Sugar, CentrifugalSugarcane crushed in the state of Sao Paulo (1,000 metric tons).

Month 07/08 08/09 09/10 10/11 11/12

February 0.00 0.00 0.00 207.21 0.00

March 0.00 472.40 2,665.32 4,120.21 708.01

April 11,725.0 12,948.0 27,545.3 35,863.9 13,395.9

May 35,5 94.1 38,933.8 46,716.6 51,305.9 49,137.8

June 43,459.2 45,157.1 46,210.3 52,523.4 48,322.0

July 38,781.8 50,136.3 46,934.1 52,596.6 53,160.2

August 46,735.2 47,158.6 45,596.4 52,065.6 48,916.9

September 43,418.5 46,246.2 37,594.3 40,116.0 0.0

October 38,912.0 42,464.9 44,334.6 36,567.7 0.0

November 27,542.8 39,485.7 36,651.4 27,872.0 0.0

December 9,215.3 19,375.0 16,809.7 5,606.2 0.0

January 860.4 2,104.7 3,638.0 294.6 0.0

February 0.0 1,050.7 3,221.3 105.9 0.0

March 0.0 759.5 3,343.3 257.5 0.0

C umulative 296,244.4 346,293.0 361,260.7 359,502.7 213,640.8

Source: Sugar and Alcohol Millers Association of Sao Paulo State (UNICA).

Sugarcane crushed in Center

- Southern Brazil (1,000 metric tons).

Month 07/08 08/09 09/10 10/11 11/12

February 0 0 0 325 0

March 0 1,340 4,717 6,618 1,795

April 20,297 20,091 39,209 51,599 22,140

May 51,676 55,055 66,950 75,633 76,134

June 62,666 64,751 67,169 81,550 76,937

July 57,449 73,335 70,183 82,122 82,091

August 67,865 68,224 70,987 82,301 79,147

Septemb er 63,104 67,655 59,736 64,732 0

October 55,929 62,350 65,734 56,349 0

November 38,290 56,283 54,713 42,892 0

December 12,876 28,096 26,254 11,267 0

January 963 3,952 6,399 843 0

February 0 2,190 5,385 441 0

March 0 1,794 4,527 270 0

Cumulative 431, 115 505,116 541,962 556,945 338,245

Source: Sugar and Alcohol Millers Association of Sao Paulo State (UNICA).

Total area planted to sugarcane and sugarcane area for harvesting for MY 2011/12 remain

unchanged at 9.65 and 8.89 million hectares, respect ively. The agricultural yield in MY 2011/12 is

estimated at 62.76 metric tons (mt)/hectare (ha), down 16 percent relative to the previous season

(75.03 mt/ha), due to lower renewal rate of the sugarcane fields and several weather related

problems in the C S. Industrial yields are estimated at 134.88 kg of TRS (total reducing sugars)/mt

of sugarcane, down four percent from the previous season (140.07 kg TRS/mt) due to poor

weather conditions throughout the harvest.Sugarcane Industrial Yields (kg TRS/ metric ton)

07/08 08/09 09/10 10/11 11/12*

TRS/ton 143.88 140.32 130.99 140.07 134.88

Souce: USDA/FAS/ATO/Sao Paulo * MY 2011/12

- estimate.

Sugarcane and Ethanol

The strong demand for sugar in the international market has led to a continuou s increase in the

sugarcane diverted to sugar production. Total sucrose (total reducing sugar, TRS) content

destined for sugar and ethanol production is estimated at 48.5/51.5 percent for MY 2011/12,

compared to 45.95/54.05 percent for MY 2010/11.

ATO/S ao Paulo estimates sugar production in MY 2011/12 at 35.75 mmt, raw value, down 2.6

mmt, raw value, from MY 2010/11, due to lower availability of sugarcane for crushing.

The tables below show monthly sugar production for the state of Sao Paulo and the CS region for

the 2007/08 to 2011/12 crops, as reported by UNICA.

Sugar production in the state of Sao Paulo (Metric tons, tel quel)

Month 07/08 08/09 09/10 10/11 11/12

February 0 0 0 4,575 0

March 0 8,946 68,428 154,759 23,072

April 506,326 433,51 4 1,152,563 1,745,785 460,983

May 2,060,416 1,872,140 2,530,999 3,025,435 2,709,198

June 2,773,968 2,425,239 2,728,867 3,427,445 3,146,861

July 2,521,042 3,094,298 3,020,119 3,703,160 3,849,026

August 3,234,706 3,034,421 3,043,705 3,923,784 3,829,460

September 3,172,657 3,101,858 2,468,929 3,125,428 0

October 2,925,756 2,592,977 2,838,435 2,357,500 0

November 1,475,693 2,083,437 2,065,829 1,726,851 0

December 394,983 906,197 570,067 228,169 0

January 73,515 59,565 77,063 4,471 0

February 0 21,616 70,985 6,287 0

March 0 28,228 93,377 12,470 0

Cumulative 19,139,062 19,662,436 20,729,364 23,446,119 14,018,600

Source: Sugar and Alcohol Millers Association of Sao Paulo State (UNICA).Sugar production in Center

- Southern Brazil (Metric tons, tel quel).

Month 07/08 08/09 09/10 10/11 11/12

February 0 0 0 4,575 0

March 0 41,936 147,030 208,240 56,496

April 851,430 631,526 1,572,304 2,342,614 754,916

May 2,816,677 2,527,935 3,364,577 4,094,385 3,940,948

June 3,782,565 3,282,349 3,669,831 4,854, 177 4,603,819

July 3,550,615 4,243,947 4,137,318 5,284,255 5,407,054

August 4,480,838 4,087,442 4,381,252 5,704,484 5,617,624

September 4,367,990 4,247,955 3,552,156 4,619,064 0

October 3,885,907 3,541,734 3,824,806 3,425,318 0

November 1,879,787 2,74 1,754 2,786,747 2,496,111 0

December 504,722 1,221,877 870,648 437,100 0

January 80,075 92,084 118,870 10,797 0

February 0 40,002 108,770 7,031 0

March 0 49,278 110,527 12,574 0

Cumulative 26,200,606 26,749,819 28,644,834 33,500,725 20,380,857

Source : Sugar and Alcohol Millers Association of Sao Paulo State (UNICA).

Based on the aforementioned sugar/ethanol breakdown, Post estimates total ethanol production

for MY 2011/12 at 21.95 billion liters (9.2 liters of anhydrous and 12.75 billion liters o f hydrous

ethanol), down 5.43 billion liters relatively to 2010/11 (8.33 billion liters of anhydrous and 19.05

billion liters of hydrous ethanol).

Estimates released by the Brazilian Ministry of Agriculture, Livestock and Supply (MAPA), place

cumulativ e alcohol production for the 2011/12 crop through August 15, 2011, at 12.18 billion

liters

– 4.46 billion liters of anhydrous ethanol and 7.72 billion liters of hydrous ethanol. The

tables below show sugarcane, sugar and ethanol production by state for the 2010/11 and 2011/12,

as reported by MAPA.

Cane, Sugar & Alcohol Production: 2010/11 Crop (MT and 000 Liters)

Ethanol

State/Region Cane Sugar Anhydous Hydrous Total

Acre 33,834 0 0 1,489 1,489

Alagoas 28,958,180 2,499,414 327,624 388,425 716 ,049

Amazonas 346,992 19,643 0 7,140 7,140

Bahia 2,791,971 113,582 59,200 68,134 127,334

Ceara 36,262 0 0 2,545 2,545

Maranhao 2,327,485 8,823 141,504 40,284 181,788

Para 521,847 20,956 6,198 16,761 22,959

Paraiba 5,246,317 182,778 124,289 173,569 29 7,858

Pernambuco 16,923,679 1,347,779 159,832 225,340 385,172

Piaui 836,696 46,297 33,109 2,388 35,497

Rio Grande Norte 2,729,169 169,003 43,144 39,734 82,878

Rondonia 136,690 0 0 10,763 10,763Sergipe 2,058,963 79,520 10,400 92,954 103,354

Tocantins 238,983 0 4,515 11,973 16,488

NNE 63,187,068 4,487,795 909,815 1,081,499 1,991,314

Espirito Santo 3,524,817 90,083 95,117 92,079 187,196

Goias 46,697,856 1,798,457 659,432 2,242,242 2,901,674

Minas Gerais 56,013,604 3,254,070 598,494 2,061,537 2,660,0 31

Mato Grosso Sul 33,476,503 1,328,546 360,800 1,485,397 1,846,197

Mato Grosso 13,660,681 446,110 274,146 583,158 857,304

Parana 43,320,918 3,022,089 271,761 1,347,822 1,619,583

Rio de Janeiro 2,537,723 118,250 0 69,102 69,102

Rio Grande Sul 82,016 0 0 5,805 5,805

Sao Paulo 361,723,269 23,506,910 4,857,709 10,607,896 15,465,605

Center South 561,037,387 33,564,515 7,117,468 18,495,038 25,612,497

TOTAL 624,224,455 38,052,310 8,027,283 19,576,537 27,603,811

Source: Ministry of Agriculture, Livestock and Supply

- Sugar, Alcohol Dept, 08/15/11

Cane, Sugar & Alcohol Production: 2011/12 Crop (MT and 000 Liters)

Ethanol

State/Region Cane Sugar Anhydrous Hydrous Total

Acre 51,516 0 0 2,582 2,582

Amazonas 76,191 3,940 0 1,550 1,550

Bahia 848,743 47,752 30,152 5,918 36,070

Ceara 0 0 0 0 0

Maranhao 990,566 6,317 64,888 5,554 70,442

Para 210,728 6,763 2,168 7,059 9,227

Piaui 298,098 15,960 11,014 15,851 26,865

Rondonia 73,926 0 0 5,652 5,652

Tocantins 791,952 0 40,167 17,638 57,805

NNE 3,341,7 20 80,732 148,389 61,804 210,193

Espirito Santo 1,895,011 47,052 64,460 40,370 104,830

Goias 28,017,604 1,043,480 412,038 1,167,250 1,579,288

Minas Gerais 27,775,456 1,602,852 388,367 681,437 1,069,804

Mato Grosso Sul 18,344,181 792,263 223,515 658,057 881,572

Mato Grosso 8,492,400 225,857 205,213 332,572 537,785

Parana 22,922,130 1,570,154 196,403 604,328 800,731

Rio de Janeiro 930,088 54,664 0 29,566 29,566

Rio Grande Sul 27,571 0 0 1,895 1,895

Sao Paulo 189,095,646 12,001,263 2,819,184 4,144,994 6,964,178

Center South 297,500,087 17,337,585 4,309,180 7,660,469 11,969,649

TOTAL 300,841,807 17,418,317 4,457,569 7,722,273 12,179,842

Source: Ministry of Agriculture, Livestock and Supply

- Sugar, Alcohol Dept, 08/15/11

In spite of the steady incre ase in the flex

- fuel vehicle (FFV) fleet, hydrous ethanol production has

been severely limited by the high prices at the pump and the trend towards sugar production to

meet strong international demand.The table below shows the licensing of flex fuel ve hicles (FFV) and ethanol powered cars since

2004. Note that sales of FFV currently represent over 85 percent of total vehicle sales. According

to the industry, flex fuel vehicles currently represent over 50 percent of the light vehicles fleet.

Licen sing of Ethanol Powered Vehicles (pure ethanol & flex fuel units)

2004 2005 2006 2007 2008 2009 2010 2011 1/

379,329 844,461 1,432,197 2,003,197 2,329,331 2,652,368 2,876,223 1,867,540

Source: National Association of Vehicle Manufacturers (ANFAVEA) 1/ January

- August

Note: flex fuel vehicles were introduced in March 2003.

The domestic demand for ethanol for MY 2011/12 is projected at 24.1 billion liters, down 1.23

billion liters from MY 2010/11. The table below shows the average prices for g asoline and ethanol

as well as the price ratio for January

- February (off

- peak) and July

- August (peak season) 2008,

2009, 2010 and 2011. The 70 percent ratio between ethanol and gasoline prices is the rule of

thumb in determining whether flex car owners wi ll choose to fill up with ethanol (price ratio below

70 percent) or gasoline (price ratio above 70 percent). Note that ethanol/gasoline ratio has been

over 70 percent in several Brazilian states and cities, even during the peak of the season, thus

favori ng gasoline consumption.

Gasoline and Ethanol Prices in Selected States (average price, R$/liter)

Gasoline Ethanol

2008 2009 2010 2011 2008 2009 2010 2011

Sao Paulo State Jan 2.380 2.393 2.477 2.487 1.290 1.312 1.807 1.733

Feb 2.376 2.398 2.50 9 2.490 1.257 1.331 1.831 1.765

Jun 2.385 2.349 2.399 2.675 1.259 1.168 1.274 1.711

Aug 2.394 2.351 2.412 2.664 1.264 1.231 1.387 1.805

Sao Paulo City Jan 2.376 2.391 2.475 2.482 1.291 1.312 1.810 1.733

Feb 2.372 2.396 2.508 2.486 1.264 1.327 1.835 1.766

Jun 2.383 2.346 2.395 2.680 1.264 1.180 1.274 1.716

Aug 2.393 2.348 2.408 2.666 1.270 1.230 1.382 1.806

Minas Gerais Jan 2.405 2.381 2.489 2.537 1.606 1.611 1.965 1.902

Feb 2.389 2.374 2.509 2.584 1.577 1.623 2.077 1.956

Jun 2.368 2.326 2.41 2 2.789 1.568 1.501 1.678 2.069

Aug 2.356 2.361 2.621 2.785 1.575 1.564 1.710 2.110

Belo Horizonte (MG

Capital) Jan 2.369 2.331 2.431 2.499 1.589 1.597 1.926 1.886

Feb 2.346 2.329 2.458 2.547 1.554 1.612 2.064 1.938

Jun 2.322 2.282 2.379 2.778 1.547 1.487 1.661 2.087

Aug 2.315 2.313 2.381 2.775 1.571 1.547 1.683 2.110

Rio Janeiro State Jan 2.505 2.537 2.641 2.654 1.624 1.685 2.044 2.022

Feb 2.501 2.535 2.663 2.663 1.614 1.695 2.104 2.053

Jun 2.513 2.524 2.613 2.869 1.635 1.588 1.703 2.170

Au g 2.576 2.526 2.598 2.826 1.658 1.604 1.718 2.191

Rio Janeiro Capital Jan 2.500 2.534 2.640 2.651 1.614 1.680 2.050 2.025

Feb 2.496 2.531 2.660 2.661 1.603 1.692 2.106 2.057

Jun 2.509 2.521 2.611 2.865 1.627 1.579 1.695 2.165

Aug 2.513 2.523 2.595 2 .822 1.653 1.598 1.713 2.189Porto Alegre (RS

Capital) Jan 2.463 2.538 2.568 2.534 1.792 1.746 2.257 2.103

Feb 2.326 2.538 2.592 2.552 1.693 1.765 2.335 2.157

Jun 2.514 2.419 2.488 2.722 1.731 1.550 1.765 2.180

Aug 2.566 2.577 2.560 2.635 1.744 1.76 5 1.836 2.238

Goiania (GO

Capital) Jan 2.539 2.565 2.654 2.667 1.569 1.581 1.838 1.822

Feb 2.502 2.564 2.655 2.697 1.508 1.581 1.897 1.891

Jun 2.330 2.562 2.304 2.830 1.368 1.483 1.227 1.782

Aug 2.452 2.556 2.384 2.840 1.472 1.411 1.347 1.836

Forta leza (CE

Capital) Jan 2.667 2.388 2.530 2.644 1.829 1.615 1.909 1.871

Feb 2.655 2.533 2.530 2.647 1.814 1.747 2.013 1.944

Jun 2.439 2.363 2.663 2.688 1.726 1.671 1.807 2.029

Aug 2.589 2.575 2.645 2.660 1.885 1.768 1.772 2.162

Source: Petroleum, Natu ral Gas and Biofuels National Agency (ANP).

Ratio Ethanol/Gasoline Prices

2008 2009 2010 2011

Sao Paulo Jan 54% 55% 73% 70%

Feb 53% 56% 73% 71%

Jun 53% 50% 53% 64%

Aug 53% 52% 58% 68%

Sao Paulo Jan 54% 55% 73% 70%

Feb 53% 55% 73% 71%

J un 53% 50% 53% 64%

Aug 53% 52% 57% 68%

Minas Gerais Jan 67% 68% 79% 75%

Feb 66% 68% 83% 76%

Jun 66% 65% 70% 74%

Aug 67% 66% 65% 76%

Belo Horizonte Jan 67% 69% 79% 75%

Feb 66% 69% 84% 76%

Jun 67% 65% 70% 75%

Aug 68% 67% 71% 76%

Rio Janeiro Jan 65% 66% 77% 76%

Feb 65% 67% 79% 77%

Jun 65% 63% 65% 76%

Aug 64% 63% 66% 78%

Rio de Janeiro Jan 65% 66% 78% 76%

Feb 64% 67% 79% 77%

Jun 65% 63% 65% 76%

Aug 66% 63% 66% 78%

Porto Alegre Jan 73% 69% 88% 83%

Feb 73% 70% 90% 85%

Jun 69% 64 % 71% 80%

Aug 68% 68% 72% 85%

Goiania Jan 62% 62% 69% 68%

Feb 60% 62% 71% 70%

Jun 59% 58% 53% 63%Aug 60% 55% 57% 65%

Fortaleza Jan 69% 68% 75% 71%

Feb 68% 69% 80% 73%

Jun 71% 71% 68% 75%

Aug 73% 69% 67% 81%

Source: Petroleum, Natural Gas and Biofuels National Agency (ANP).

Gray area means gasoline prices more attractive than ethanol

Sugarcane, Sugar and Ethanol Prices in the Domestic Market

The State of Sao Paulo Sugarcane, Sugar and Alcohol Growers Council (CONSECANA) reports tha t

the cumulative average sugarcane price for the 2011/12 crop (April

- August) for the state of Sao

Paulo, in reais, is R$ 0.4942 per kg of TRS, or R$ 65.31 per ton of sugarcane, up R$ 17.36 per ton

compared to the same period (April

- August) for the the 2010 /11 crop (R$ 0.3475 per kg of TRS, or

approximately R$ 47.95 per ton of sugarcane). Note that CONSECANA’s prices are based on both

sugar and ethanol prices in domestic and international markets and these have been considerably

better in the current crop s eason compared to the previous year.

The Crystal Sugar and Ethanol Indexes released by the University of Sao Paulo’s College of

Agriculture "Luiz de Queiroz" (ESALQ) follow. The Crystal Sugar Index tracks crystal sugar prices

in the domestic spot market

. The Ethanol Indexes track anhydrous and hydrous prices received by

producers in the domestic spot market. All prices are notably higher than previous years due to

the sharp decrease in the size of the crop.

Crystal Sugar Prices

- Domestic Market (Real, 50kg/bag, including tax).

Period 2007 2008 2009 2010 2011

January 36.79 25.04 36.71 70.83 76.29

February 34.96 26.20 44.77 72.49 75.17

March 34.70 27.44 48.40 69.58 70.55

April 33.87 28.11 46.48 63.66 66.24

May 28.56 26.71 44.57 43.76 59.73

June 24.94 24.94 42.20 40.40 52.25

July 24.38 24.38 41.46 40.90 64.33

August 25.18 29.01 45.43 46.42 68.49

September 25.11 30.81 55.50 56.91 65.23

October 23.92 31.13 57.28 71.68

--

November 22.06 30.74 56.21 75.24

--

December 23.62 31.72 58.73 72. 66

--

Source: USP/ESALQ/CEPEA. September 1/ refers to September 16.Fuel Anhydrous Ethanol Prices: State of São Paulo (R$/000 liters).

Month 2007 2008 2009 2010 2011

January 870.69 786.22 873.30 1,285.40 1,233.20

February 837.39 808.08 860.30 1 ,297.60 1,293.10

March 912.93 831.50 744.50 974.60 1,596.60

April 1,072.57 789.40 697.00 908.40 2,375.00

May 883.78 821.50 676.40 839.20 1,380.70

June 675.07 787.00 692.80 827.30 1,244.60

July 668.53 873.20 803.78 924.20 1,298.90

August 665.58 858.50 820.70 961.90 1,352.80

September 660.73 891.20 912.90 1,040.20 1,383.70

October 664.44 902.20 1,086.40 1,173.20

--

November 792.90 897.00 1,093.80 1,185.20

--

December 851.07 880.60 1,131.60 1,201.80

--

Source: USP/ESALQ/CEPEA. September 1/ refers to September 12

- 16.

Fuel Hydrous Ethanol Prices: State of São Paulo (R$/000 liters).

Month 2007 2008 2009 2010 2011

January 845.36 697.18 781.40 1,171.20 1,109.40

February 802.87 714.70 777.60 1,095.80 1,176.10

March 855.05 754.56 656.80 825.20 1,42 1.90

April 940.51 715.60 621.30 799.70 1,387.50

May 690.84 697.10 585.22 724.30 1,005.90

June 587.86 665.30 606.60 720.30 1,113.70

July 583.99 718.10 710.20 797.90 1,136.80

August 581.02 719.30 726.50 835.70 1,193.00

September 580.96 749.60 791.40 89 6.20 1,212.10

October 585.48 715.70 935.10 977.70

--

November 716.09 726.40 941.90 1,001.00

--

December 751.28 737.70 1,000.40 1,075.10

--

Source: USP/ESALQ/CEPEA. September 1/ refers to September 12

- 16.



### Consumption:

There is no official source for domestic consumption of sugar in Brazil. ATO/Sao Paulo estimates

the Brazilian sugar consumption in MY 2011/12 at 11.5 mmt, raw value, down 500,000 mt from

the previous marketing year, based on updated information from post contacts.



### Trade:

Sugar Expo rts

During MY 2011/12, Brazilian sugar exports are estimated at 23.8 mmt, raw value, down 2 mmt

compared to previous marketing year, as a consequence of lower availability of the product. Rawsugar exports should contribute 18.7 mmt of total exports. R efined exports should account for 5.1

mmt, raw value.

The following tables show Brazilian sugar exports by destination for MY 2010/11 and MY 2011/12

(May

- August), as reported by the Brazilian Secretariat of Foreign Trade (SECEX).

Brazilian Sugar Exp orts (NCM 1701.11.00, MT, tel quel, US$ 000 FOB)

MY 2010/11 1/ MY 2010/11 2/ MY 2011/12 2/

Country Quantity Value Quantity Value Quantity Value

Russia 3,800,518 1,935,955 1,109,722 487,264 1,474,878 796,297

China 1,237,140 505,584 838,842 336,969 87 5,468 488,445

Algeria 1,268,275 574,465 460,998 188,744 634,688 350,390

Iran 1,384,191 602,166 704,968 306,851 571,515 316,754

Egypt 1,049,591 487,698 406,552 176,431 525,399 304,396

Malaysia 1,017,322 446,176 414,657 168,103 469,834 256,110

Banglades h 695,723 296,830 267,558 114,230 392,545 218,254

Canada 718,995 328,718 214,027 92,730 353,927 207,184

Indonesia 1,139,103 514,287 304,469 134,195 351,369 203,235

Morocco 884,232 437,521 316,257 131,673 269,319 142,905

Others 7,506,914 3,547,656 2,854 ,641 1,211,342 2,273,664 1,268,800

Total 20,702,005 9,677,056 7,892,690 3,348,531 8,192,606 4,552,772

Source : Brazilian Foreign Trade Secretariat (SECEX)

Note : Numbers may not add due to rounding 1/May

- April

- 2/May

- August.

Brazilian Sugar Ex ports (NCM 1701.99.00, MT, tel quel, US$ 000 FOB)

MY 2010/11 1/ MY 2010/11 2/ MY 2011/12 2/

Country Quantity Value Quantity Value Quantity Value

UAE 1,119,570 491,766 623,723 258,727 441,596 269,403

Saudi Arabia 165,800 81,401 112,528 51,260 173,515 103,642

Yemen 512,357 252,840 257,452 118,985 145,191 98,614

Ghana 456,017 247,238 131,728 64,017 144,003 97,164

Togo 140,259 76,042 48,360 21,609 115,910 80,946

Senegal 112,699 69,141 31,948 16,284 92,946 63,463

Nigeria 387,010 173,406 128,540 54,77 2 77,321 50,505

China 18,728 10,631 1,664 952 74,374 46,122

Mauritania 169,898 94,655 61,260 28,894 61,128 42,307

Cameroon 66,212 36,430 14,132 7,112 57,937 40,037

Others 3,610,447 1,915,349 1,451,503 714,680 873,977 597,917

Total 6,758,996 3,448,899 2,862,838 1,337,292 2,257,897 1,490,119

Source : Brazilian Foreign Trade Secretariat (SECEX)

Note : Numbers may not add due to rounding 1/May

- April

- 2/May

- August.

Ethanol Exports

For MY 2011/12, Brazilian ethanol exports are estimated at 1.6 billion liters, down 300 million liters

compared to the previous season (1.9 billion liters), due to lower supply of the product. Most

ethanol exports fall under the category “for other uses”” other than fuel. The tables below showethanol exports for M Y 2010/11 and MY 2011/12 (May

- August), as reported by the Brazilian

Secretariat of Foreign Trade (SECEX).

Brazilian Ethanol Exports by Country of Destination (NCM 2207.10.00, 000 liters, MT, US$ 000

FOB)

MY 2010/11 1/ MY 2011/12 2/

Coun try Volume Weight Value Volume Weight Value

USA 360,509 285,157 232,630 185,244 146,711 133,719

Soth Korea 406,659 328,589 215,361 122,561 99,054 82,121

Japan 276,901 223,389 142,834 105,893 85,219 77,870

Trinidad & Tobago 6,561 5,282 3,761 76, 686 62,003 55,291

El Salvador 2 1 4 50,081 40,489 33,855

Swtizerland 53,024 42,722 30,177 49,744 40,142 31,193

Jamaica 123,406 99,775 60,589 38,834 31,414 29,271

Holland 230,580 185,604 121,094 35,961 29,073 23,004

Nigeria 94,977 76,790 52,4 58 27,628 22,334 18,023

Puerto Rico 27,183 22,075 16,591 10,113 8,222 8,820

Others 314,900 251,779 173,642 31,043 24,921 22,705

Total 1,894,701 1,521,162 1,049,142 733,787 589,583 515,874

Source : Brazilian Secretariat of Foreign Trade (SECEX) 1/May

- April 2/ May

- August.

Brazilian Ethanol Exports by Country of Destination (NCM 2207.20.10, liters, kg, US$ FOB)

MY 2010/11 1/ MY 2011/12 2/

Country Volume Weight Value Volume Weight Value

Angola 120 51 185 300 395 1,021

Argentina 1,334,2 08 1,072,251 788,071 0 0 0

Cameroon 60,000 48,306 61,635 0 0 0

China 23,716 19,170 11,905 0 0 0

Italy 0 0 0 100 74 488

Japan 0 1 1 0 0 0

Holland 44,413 34,130 31,410 0 0 0

Paraguay 2,035 2,133 3,016 16 74 306

Uruguay 30,000 24,420 30,000 0 0 0

Tota l 1,494,492 1,200,462 926,223 416 543 1,815

Source : Brazilian Secretariat of Foreign Trade (SECEX) 1/May

- April 2/ May

- August.

Ethanol Imports

ATO/Sao Paulo estimates Brazilian ethanol imports during MY 2011/12 at 1.5 billion liters, almost

exclus ively for fuel use, due to the shortage in the domestic supply of ethanol. The tables below

show ethanol imports (NCM 2207.10.00 and 2207.20.10) for MY 2010/11 and MY 2011/2012

(May

- August), as reported by the Brazilian Secretariat of Foreign Trade (SECEX ).

Brazilian Ethanol Imports by Country of Origin (NCM 2207.10.00, 000 liters, MT, US$ 000 FOB)MY 2010/11 1/ MY 2011/12 2/

Country Volume Weight Value Volume Weight Value

Holland 0 0 0 16,576 13,398 16,204

Spain 0 0 0 8,297 6,707 4,452

USA 23 ,760 19,206 16,489 7,836 6,334 9,813

UK 10,475 8,467 7,840 3,179 2,569 2,463

France 0 0 0 1,634 1,321 1,266

Trinidad & Tobago 0 0 0 287 232 294

Jamaica 95 77 251 141 114 414

Barbados 45 36 59 23 18 30

Germany 29 24 401 12 10 204

Italy 10 8 46 4 3 1 9

Others 81 65 121 0 0 3

Total 34,495 27,882 25,205 37,990 30,707 35,162

Source : Brazilian Secretariat of Foreign Trade SECEX

- 1/ May

- April 2/ May

- August.

Brazilian Ethanol Imports by Country of Origin (NCM 2207.20.10, 000 liters, MT, US$ 000 FOB )

MY 2010/11 1/ MY 2011/12 2/

Country Volume Weight Value Volume Weight Value

USA 172,057 136,857 114,850 368,497 290,700 261,815

UK 1 1 5 20,708 16,334 15,729

Germany 12 16 30 22 27 73

Mexico 9 7 37 3 2 15

Others 0 0 9 0 0 1

Total 172,079 136,8 81 114,931 389,230 307,064 277,632

Source : Brazilian Secretariat of Foreign Trade SECEX

- 1/ May

- April 2/ May

- August.



### Stocks:

Sugar ending stocks for MY 2011/12 are estimated at 165,000 mt, raw value. Negative stocks in

the previous marketing years h ave been balanced by the early start (March/April) of the sugarcane

harvest in the CS region as opposed to the official beginning of the season (May).



### Policy:

On August 30 th , the Brazilian Government (GOB) announced a drop in the percentage of ethanol

blended to gasoline from the current 25 percent to 20 percent, effective October 1. This action

reflects an expected drop in the 2011/12 sugarcane crop and the steady price escalation of

anhydrous ethanol prices. The GOB is hoping that the reduction in the ethanol blend will decrease

the domestic ethanol demand by 160 million liters per month.



### Exchange Rate

Exchange Rate (R$/US$1.00

- official rate, last day of period)

Month 2005 2006 2007 2008 2009 2010 2011

January 2.62 2.22 2.12 1.76 2.32 1.8 7 1.67

February 2.60 2.14 2.12 1.68 2.38 1.81 1.66

March 2.67 2.17 2.05 1.75 2.25 1.78 1.62April 2.53 2.09 2.03 1.69 2.18 1.77 1.57

May 2.40 2.30 1.93 1.63 1.97 1.81 1.57

June 2.35 2.16 1.93 1.64 1.95 1.80 1.56

July 2.39 2.18 1.88 1.57 1.87 1.75 1. 56

August 2.36 2.14 1.96 1.63 1.88 1.75 1.59

September 2.22 2.17 1.84 1.92 1.78 1.69 1.84

October 2.25 2.14 1.74 2.12 1.74 1.70

--

November 1/ 2.21 2.17 1.78 2.33 1.75 1.71

--

December 2.26 2.14 1.77 2.34 1.74 1.66

--

Source : Gazeta Mercantil and B ACEN (as of October 2006) 1/ September 2011 refers to September 26.

### Production, Supply and Demand Data Statistics:

Sugar Cane for Centrifugal Brazil 2009/2010 2010/2011 2011/2012

Market Year Begin: May 2009 Market Year Begin: May 2010 Market Year Begin: May 2011

USDA Official New Post USDA Official New Post USDA Official New Post

Area Planted 8,700 8,700 8,950 8,950 9,650

Area Harvested 8,050 8,050 8,310 8,490 8,890

Production 603,000 603,000 639,000 620,000 558,000

Total Supply 603,000 603,000 639,000 620,000 558,000

Utilization for Sugar 262,300 262,300 286,000 284,900 270,630

Utilizatn for Alcohol 340,700 340,700 353,000 335,100 287,370

Total Utilization 603,000 603,000 639,000 620,000 558,0 00

1000 HA, 1000 MT

Sugar, Centrifugal Brazil 2009/2010 2010/2011 2011/2012

Market Year Begin: May 2009 Market Year Begin: May 2010 Market Year Begin: May 2011

USDA Official New Post USDA Official New Post USDA Off icial New Post

Beginning Stocks

- 1,135

- 1,135

- 835

- 835

- 335

- 285

Beet Sugar Production 0 0 0 0 0 0

Cane Sugar Production 36,400 36,400 38,150 38,350 39,600 35,750

Total Sugar Production 36,400 36,400 38,150 38,350 39,600 35,750

Raw Imports 0 0 0 0 0 0

Refined Imp.(Raw Val) 0 0 0 0 0 0

Total Imports 0 0 0 0 0 0

Total Supply 35,265 35,265 37,315 37,515 39,265 35,465

Raw Exports 18,900 18,900 20,250 20,400 21,450 18,700

Refined Exp.(Raw Val) 5,400 5,400 5,400 5,400 5,850 5,100

Total Exports 24,300 24,300 25,650 25,800 27,300 23,800

Human Dom. Consumption 11,800 11,800 12,000 12,000 12,550 11,500

Other Disappearance 0 0 0 0 0

Total Use 11,800 11,800 12,000 12,000 12,550 11,500

Ending Sto cks

- 835

- 835

- 335

- 285

- 585 165

Total Distribution 35,265 35,265 37,315 37,515 39,265 35,465

1000 MT