There's been a heaping amount of talk over sugar sales in India over the past week and none of it too sweet.

At present, Indian sugar farmers feel the government has fixed too low a minimum price for sugar cane.

In reponse, sugar farmers have rallied in protest at state capitals and have halted sugar cane sales to millers.

The obvious direct results are the crippled production of final sugar product and a dramatic supply and demand imbalance.

To entice Indian sugar growers to sell more sugar cane, Indian sugar mills have volunteered more money to farmers.

Some farmers have accepted and sold sugar supply to mills.

According to Reuters, 47 out of 91 private mills in the state of Uttar Pradesh have started crushing, and almost all are expected to crush by the end of the month.

Still others, who see this as an opportunity to make more profits, are holding on tight.

One example is the farmers' group Kisan Jagriti Manch, which was recently offered 190-195 rupees ($4.1-$4.2) for 100 kg of sugar cane by the Uttar Pradesh Sugar Mills Association, more than 25 rupees (15%) over the state-set price.

Sudhir Kumar Panwar, head of the group, contends that the farmers deserve more (at least 215 rupees) and recently met with government officials and milling organizations to represent sugar cane farmers and their demands.

This (ahem... fabricated) sugar shortage in India has contributed to the major escalation in sugar futures (NYSE) over the past few months (the highest in over 28 years), as well as, disparity between the growers and the millers in India.

Needless to say, when and at what price these farmers decide to sell is of critical importance for the success of India's sugar economy.

If the farmers don't accept a price to sell their sugar cane, India will be forced to import more sugar next year due to the resultant delays in production. (Why am I thinking about building a card castle right now?)

So, while India works this out, perhaps now is a good opportunity to focus on a different aspect of the situation; the surging population (and its resultant worldwide sugar demands) presents great investment opportunity for wholesale sugar sales in the US.

Forward thinking tells us that companies involved in wholesale sugar sales, wholesale food ingredients, chemicals and fertilizers for sugar crops, and sugar milling equipment/manufacturing supplies are likely to see growth over the next decade.

In addition, food preservatives and additives and other food ingredients may reap some benefits as well.

Imperial Sugar Company, Sugar Refiners and Growers, Inc., and Cargill, Incorporated have put together what sounds like a pretty sweet deal.

In the announcement of the new sugar refinery, Imperial's CEO, John Sheptor said,

"This transaction enables Imperial to retire its existing refinery with dated technology for a share of the new state-of-the art refinery without a significant capital outlay by Imperial.

"Following the completion of the construction of the LSR refinery and the rebuild of the Port Wentworth facility, Imperial will own or participate in two of the most modern sugar refineries in the country."

For a variety of reasons, no doubt including the high cost of building a modern sugar refinery, these three sugar industry heavyweights decided to join forces, each putting up cash or other assets valued at $145 million.

The new venture dubbed, "Louisiana Sugar Refining, LLC (LSR)," is a big deal for all three firms in their respective long-term strategies.

Given the current sugar supply and demand debates and what has happened this year with sugar prices, the production capacity the new facility will have should help stabilize the long-term sugar prices--even when Imperial's old sugar plant is retired.

As to when the new plant will come online and the old one retired, the piece says, The existing Gramercy refinery will operate during the construction and start-up phase of the new refinery, expected to be 18 to 24 months.

We're really happy for all three companies involved in this deal, wish them the best, and hope it really does turn out to be a sweet deal for everyone involved.

Although it may seem like folks are drinking less soft drinks these days, don't expect manufacturers to just fizzle out.

According to a recent report by Reuters in FlexNews, Coca-Cola has announced plans to double its revenue by 2020... an ambitious but not impossible goal, especially for a company that already boasts $100 billion in revenue.

So if Coca-Cola can do $100 billion, why not shoot for $200 billion?

Given the population boom in Asia, Coke foresees growth of its "incremental sales volume by roughly 60% from emerging markets like China and India."

In addition, Coca-Cola is looking to Mexico and South Africa for around 25% of its volume growth.

At present, people in these countries don't consume many soft drinks, however with more exposure and near exponential population growth (exaggeration, but you get the point), increased sales of "thirst quenchers" are in the horizon.

To complete the package, Coca-Cola has additional plans to ensure success including cost saving measures (i.e. formation of a joint company that aims to cut costs in supply chains and consolidating the servicing of restaurants) and new marketing campaigns for developed markets, like the US and Japan.

These campaigns will target:

• females (who typically do the family foodshopping even though it isn't ca. 1955 anymore)
• multicultural teenagers
• adults (via products and packaging that appeal to wine lovers)

And, while we're on the topic of soft drinks, this will greatly impact wholesale food ingredient sales on products like sugars, crystalline fructose, corn syrup and other sweeteners, sodium citrate, and other food chemicals.

Announced this week were the annual World Agriculture Supply and Demand Estimates.

According to the ISC Newsroom, these estimates (diligently generated by the USDA), [forecast] supply and demand for most U.S. and many global crops and livestock products.

So that we can continue to offer the best wholesale sugar prices, we've been paying close attention to the sugar supply projections (as you might expect), especially given the recent sugar supply and demand environment.

To many industry analysts, there weren't any tremendous surprises, but estimates continue to slide thanks to bad weather.

For those who may have missed the news, the already lower 2009 estimates of the beet crop have dropped,

"... from 4.7 million tons to 4.4, primarily due to frost damage several weeks ago in the northern tier of sugar-growing states, including Montana, Wyoming, Nebraska, Colorado, Minnesota and North Dakota."

Quoted in the ISC Newsroom piece was Pat Hennenberry, Imperial Sugar's Chief of Commodities Management, who said,

"We believe that the market is considerably tighter than the USDA is estimating.

"We worry that this may cause delay in increasing imports into the U.S., and that the market here will remain tight until sufficient imports are allowed."

Whether or not you completely agree with Hennenberry, a lot of analysts do believe that sugar supply will likely continue to be tight for some time.

The following data comes straight from the USDA's November 2009 publication.

[Editor's Note: Worth noting in this report is a procedural change. With this change, imports and demand will be estimated more accurately thanks to better accounting of sugar imported from Mexico.]

U.S. Sugar Supply & Production¹

1,000 short tons, raw value

Item	2007/2008	2008/2009 (Est)	October (Proj)	November (Proj)
Beginning Stocks	1,799	1,660	1,224	1,451
Domestic Sugar Production
Florida	1,645	1,577	1,700	1,700
Hawaii	182	192	160	143
Louisiana	1,446	1,397	1,300	1,300
Texas	158	152	165	170
Cane Sugar	3,431	3,318	3,325	3,313
Beet Sugar	4,721	4,166	4,700	4,400
Production Totals2,A	8,152	7,484	8,025	7,713
Imported Sugar
TRQ3	1,354	1,370	1,257	1,257
Other Program4	565	308	400	400
Other5	701	1,404	505	770
MexicoB	694	1,402	495	760
Imports	2,620	3,082	2,162	2,427
Exports	203	137	200	200
Food6	10,506	10,479	10,140	10,140
Other7	202	159	235	235
Deliveries	10,708	10,638	10,375	10,375
Miscellaneous	0	0	0	0
Ending Stocks	1,660	1,451	836	1,016
Stock-to-Use Ratio	15.2	13.5	7.9	9.6
1 Fiscal years beginning Oct 1. Includes Puerto Rico. Historical data are from FSA, "Sweetener Market Data" (SMD) except imports (U.S. Customs Service, Census Bureau). 2 Production projections for 2009/10 are based on Crop Production and trend recovery rates. 3 For 2009/10, includes shortfall of 200,000 tons. 4 Includes sugar under the re-export and polyhydric alcohol programs. 5 For 2009/10, other high-tier (10) and other (0). 6 Combines SMD deliveries for domestic human food use, SMD miscellaneous uses, and the difference between SMD imports and WASDE imports. 7 Transfers to sugar-containing products for re-export, and for non-edible alcohol and feed. A Production Totals are the sum of Beet Sugar & Cane Sugar. B Mexico Totals are included in "Other."

If you're concerned about how the sugar supply (and national / international demand) will affect your business, you'd be well served to read the full report.

If you need a quote for your next wholesale sugar order, contact us so we can help provide the best quality food ingredients at the best prices.

Although this is newly old news, it's still pretty bold news.

Yesterday, Kraft Foods (processed foods manufacturing giant and wholesale food ingredients consumer) presented their second offer for the purchase of Cadbury.

And even though it didn't work the first time, Kraft tried it again, leaving Cadbury executives scratching their heads.

According to various reports, Kraft Foods offered Cadbury the same cash price per share (300p and 0.2589 Kraft shares per Cadbury share) and exchange ratio (1.6609 USD/GBP) as their offer on September 7, 2009.

Well, not really the same.

Based on current market values for Kraft Foods shares, the offer was even less attractive.

Since the first offer on September 7, Kraft share prices have fallen. As a result, this new bid is valued at 4% less than the first: the value for each Cadbury share is calculated at 717 pence (based on the Kraft share price on November 6).

Cadbury chairman, Roger Carr, was piqued by the bid,

"The repetition of a proposal which is now of less value and lower than the current Cadbury share price does not make it any more attractive.

"As a result, the Board has emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadbury is fully understood by all.

"I am confident Cadbury will deliver significant value - which should accrue wholly to our shareholders."

Despite this blatant dismissal and rejection by Cadbury, Kraft Foods remained steadfast.

Kraft Chairman and CEO, Irene Rosenfeld, responded,

"We remain convinced of the strategic merits for both companies of combining Kraft Foods and Cadbury.

"We believe that our proposal offers the best immediate and long-term value for Cadbury's shareholders and for the company itself compared with any other option currently available, including Cadbury remaining independent."

Kraft also reports that the offer "represents an attractive multiple of Cadbury's underlying EBITDA" and reminds Cadbury that "no other potential offeror has publicly declared interest" in acquiring the company.

So, the negotiation remains in states of check mate and deja vu, which coincidentally sound like great names for chocolate bars!