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Commodity Pricing will certainly hamper turnarounds

April 10, 2008

Analysis of:Kraft, Sara Lee say turnaround efforts are succeeding | www.chicagotribune.com

In addittion to all press about corn and wheat prices which affect Kraft and SaraLee they are now exposed to sugar as well. The explosion at Savannah which will keep that refinery off line for at least a year (and maybe forever) destroyed almost 10% of the U.S. refining capacity. Their are only 8 cane refineries in the U.S, and now only 7 are operable. Recall after Katrina knocked out the New Orleans refinery for 90 days that sugar prices skyrocketed from $25/cwt to over $40. The New Orleans refinery was much smaller than the Savannah refinery and was only off line for 90 days. Since the sugar industry has been quick to downplay this to hopefully head off the USDA opening up the imports again; the fact that all this occured during the winter months when demand is normally low and the beet sugar guys are trying to "clear storage" which dumps an inordinate amount of refined sugar into the market during a short period of time. The shortfall will start showing up in May/June.

Suggested Retail Pricing

March 28, 2007

Analysis of:US price fixing issue threatens Wal-Mart | www.ft.com

*Wal Mart should require more manufacturers to pre-print suggested retail price to keep other retailers from gouging.

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