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The contract with the Growers stipulates a fixed price for all beet sugar derived from the beets processed in addition to a scale incentive as the price of raw sugar increases. As a consequence, the Company is exposed to fluctuations in the #11 world raw sugar price for all domestic beet sugar volume sold against the #11 world raw sugar prices, which is approximately 60,000 metric tonnes. 

## Pricing 

In fiscal 2013, the price of raw sugar fluctuated between U.S. 15.93 cents per pound and U.S. 21.77 cents per pound, and closed at U.S. 16.87 cents per pound at the end of the fiscal year, which was approximately 2.71 cents lower than the closing value at September 29, 2012.The price variation during the year was less than in fiscal 2012 when raw sugar prices fluctuated between U.S. 18.81 and U.S. 28.35 cents per pound.The world sugar market continued to trend downwards as world sugar production exceeded consumption for a second consecutive year. India and Thailand produced near record crops, while Brazil exceeded the previous year’s output and produced a record crop. 

The price of sugar deliveries from the Montreal and Vancouver raw cane facilities is directly linked to the price of the #11 world raw sugar market on the ICE.All sugar transactions are hedged, thus eliminating the impact of volatility in world raw sugar prices.This applies to any refined sugar sales made by these plants. Liquid sales to HFCS substitutable customers are normally priced against competing HFCS prices and are historically the lowest margin sales for the Company.A higher price of raw sugar may render the Company uncompetitive on certain of these liquid sales. 

Higher raw sugar prices have the most significant impact on our western operations. In Taber, the raw material used to produce sugar is sugar beets, for which a fixed price, plus an incentive on higher raw sugar values, is paid by Lantic to the Growers. As a result, Lantic benefits from or alternatively absorbs some of the results associated with fluctuations in world raw sugar prices for all volume sold, excluding non U.S. export volume. 

## Operations 

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## WORLD RAW SUGAR CANE PRICES 

Employees are key to our success and employee safety is continuously at the forefront of our priorities. Each of the Company’s manufacturing operations incorporates occupational health and safety components in its annual planning which are reviewed monthly by senior management and quarterly by the Board of Directors. 

