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LSS - HOLD - Still under pressure, but less surpluses - Update

The International Sugar Organization (ISO) expects global surpluses to shrink to 4.5mn tonnes from 10.3mn tonnes in FY13. The reduction is due to a fall in global production, rather than increasing demand, as we observe a shift from sugar production to ethanol in leading sugar producer Brazil. We also like the positive changes in LSS, namely: 1) new factory operational and 2) better product mix (moving towards higher margins).