Sakuma Exports Ltd Management Discussions

Global economic oerie :

The global economic growth remained stagnant at 3.5% in 2024 and 2025, as the effects of the war in the Middle East were largely offset by accelerated demand-driven momentum in the global technology cycle, powered by advances in arti cial intelligence (AI) and its adoption. The impact has varied widely across countries energy exporters outside the con ict zone bene ted from favorable terms of trade, while economies integrated into the technology value chain saw stronger activity even where they were energy importers, whereas energy importers with limited participation in the technology upturn, a group that includes many low-income countries, experienced weaker activity. Advanced economies witnessed a marginal increase in growth, remaining broadly stable at 1.9% in both 2024 and 2025, while emerging market and developing economies also held steady at 4.5% in 2025 compared to 4.5% in 2024. Global in ation moderated sharply in 2025, declining to an estimated 4.1% from 5.8% in 2024, continuing the multi-year disin ation trend that had been in place since the beginning of 2024.

Regional grot (
World output	3.5	3.5
Advanced economies	1.9	1.9
Emerging and developing economies	4.5	4.5

(Source: IMF, un.org)

Outloo:

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook Update assumes that the reopening of the Strait of Hormuz begins in mid-July 2026, with conditions broadly returning to the prewar state of affairs by March 2027, consistent with commodity price assumptions based on market pricing as of June 10, 2026. Under this outlook, global growth is projected at 3.0 percent in 2026, before recovering to 3.4 percent in 2027. Global in ation is expected to rise to 4.7 percent in 2026, as the disin ation trend since 2024 stalls, before easing to 3.9 percent in 2027. (Source: IMF World Economic Outlook Update July 2026, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan) Indian economic oerie

The global sugar industry is a large agro-based sector led by major producers such as Brazil, India, and Thailand, and is in uenced by weather patterns, policy frameworks, and global trade dynamics. Its scope remains strong, driven by steady demand, growth in emerging markets, and increasing integration with ethanol production, alongside a rising focus on sustainability and ef ciency. In 2024, global sugar production stood at 194.9 Million Tonnes, with forecasts projecting an increase to 223.1 Million Tonnes by 2033. Rising urbanization, evolving consumer preferences for convenient foods, and the rapid expansion of the food service sector are collectively driving increased sugar consumption, particularly through the growing demand for indulgent and packaged products. At the same time, the chemical segment of the sugar industry is gaining momentum, supported by the rising demand for bio-based products, diversion of surplus sugar towards ethanol, favorable government policies, and the emergence of sustainable alternatives such as bioplastics and specialty chemicals. Additionally, the use of sugar in cosmetics for its natural exfoliating and moisturizing properties is contributing to incremental demand.

Indian Sugar Sector Oerie: FY

India continued to be the worlds largest consumer of sugar, making the sugar industry one of the countrys most signi cant agro-based sectors during FY 2025-26. Beyond its contribution to GDP, the industry played a critical role in supporting millions of farmers and sustaining rural livelihoods. Key byproducts such as molasses, bagasse, and ethanol further strengthened the sectors integrated value chain. During the 2025-26 season, total sugar availability was estimated at 34.3 Million Tonnes, signi cantly exceeding domestic consumption of approximately 28.3 Million Tonnes. Exports were estimated at around 0.7 Million Tonnes, while closing stocks remained stable at nearly 5.3 Million Tonnes, ensuring adequate domestic buffer levels. Export activity continued to remain regulated through government quotas, with total permitted exports for the 2026 marketing year standing at 2 Million Tonnes, including incremental approvals during the year. Regionally, production trends re ected both climatic and structural shifts. In Uttar

Pradesh, yield pressures arising from varietal replacement were partly offset by improved recovery rates. Maharashtra and Karnataka witnessed lower output due to excessive rainfall, early owering of sugarcane, and compressed crushing cycles. However, improved planting trends in these States toward the end of the year indicated the possibility of recovery in the upcoming season, supporting healthy opening stock levels. A de ning structural shift during the year was the accelerated pivot toward ethanol production. Supported by strong policy measures from the Government of India, ethanol blending with petrol continued to gain momentum, positioning the sugar industry at the centre of the countrys renewable energy transition. Ethanol production was expected to increase to nearly 4 Million Tonnes in the 2026 season, compared with 3.5 Million Tonnes in 2025, supported by the governments target of achieving 20% ethanol blending. during the year. Operating margins of sugar mills improved to an estimated 9-9.5% in FY 2025-26, supported by better realizations, diversi ed revenue streams, and improved balance sheet resilience following earlier cyclical pressures. Overall, the Indian sugar industry continued evolving from a traditional agro-based sector into a more diversi ed and resilient ecosystem balancing food, fuel, and sustainability objectives. (Source: Economic Times, IREF, IBEF) From a nancial perspective, the sector witnessed gradual recovery

Sugar Balance Sheet 2025-26	In Lakh Tonnes
Opening stock (as of October 1, 2025)	50
Estimated production during Sugar Season FY 2025-26 (after ethanol diversion)	293
Sugar availability	343
Estimated domestic consumption	283
Targeted exports during Sugar Season FY 2025-26	7
Closing stock	53

Indian etanol sector oerie

India continued to make steady progress in the ethanol sector during FY 2025-26, supported by rising production, higher blending levels, and expanding manufacturing capacity. The accelerated rollout of the Ethanol Blending Programme (EBP), diversi cation of feedstock sources, and continued distillery expansion by integrated sugar companies strengthened the sectors role in Indias energy transition and rural economic development. The Indian ethanol market was valued at approximately US$ 3.58 Billion in 2025 and is projected to grow at a CAGR of around14.6% during 2026-2035, reaching an estimated US$ 13.99 Billion by 2035.A key driver of this growth is the governments focus on diverting surplus sugar toward ethanol production. This approach not only reduces excess sugar inventories but also lowers dependence on fossil fuel imports and supports Indias climate commitments under global frameworks such as CoP26. Ethanol procurement by Oil Marketing Companies (OMCs) has scaled signi cantly, with a balanced mix procurement volumes have remained robust, with grain-based ethanol slightly exceeding sugar-based ethanol, re ecting a gradual diversi cation of feedstock sources. This shift is being driven by better economics and supply stability in grain-based production. Indias Ethanol Blended Petrol (EBP) programme continued its rapid expansion, with blending levels rising from 1.5% in 2013 to nearly 20% in ESY 2025, positioning the country among the global leaders in biofuel adoption. The programme strengthened energy security, supported rural incomes reduced crude oil imports, and lowered emissions, while also highlighting challenges related to feedstock availability, water use, logistics, and long-term sustainability. Policy support remained strong through administered ethanol pricing, 5% GST on ethanol for blending, interest subvention schemes, long-term offtake agreements, and investments in storage and transportation infrastructure. Looking ahead, ethanol production is expected to rise further in FY 2025-26, supported by expanding distillation capacities, favorable policy support and sustained demand from OMCs.The ethanol ecosystem increasingly strengthened the nancial resilience of sugar companies by improving cash ows, reducing cyclicality, and providing an additional revenue stream.

Overall, the ethanol sector is playing a transformative role in repositioning Indias sugar industry, from a cyclical agro-based sector to a more stable, diversi ed, and energy-integrated value chain.

Comany Business Structure & Analysis:

Our company operates across three primary verticals Sugar, Soft Oil, Grains, Paddy & Pulses each responding uniquely to the evolving global trade landscape. The domestic sugar sector has experienced a signi cant uptick, fuelled by Indias restrictive export policies aimed at stabilizing local prices and managing food in ation. Despite global market volatility, the company has maintained its market share domestically, leveraging its robust supply chain and strategic positioning. Other verticals, like grains- Maize & Soybean seed have also seen pro table contributions, although they face challenges like price mismatches, sluggish demand, tight liquidity, and geopolitical uncertainties, including trade tensions and tariff barriers.

In the current climate marked by heightened protectionism, trade restrictions, and tariffs in major economies, Indian agricultural exports often encounter hurdles such as quota limitations, export bans, and non-tariff barriers. Consequently, our focus has shifted towards expanding domestic markets and diversifying into new commodities to sustain growth momentum. These efforts are complemented by exploring opportunities in new product development, capacity expansion, and strengthening geographical reach, thereby reducing dependency on volatile global markets.

Oortunities and Treats:

Opportunities:

Favourable government policies on Sugar and Ethanol, bolstered by demand, create a conducive environment for higher prices and margins.

Rising demand for Edible Oils and Grains offers prospects for increased trade opportunities and diversi ed revenue streams. Capacity enhancement and technological upgrades can improve production ef ciency amidst rising input costs.

Strategic investments in new product development can ll market gaps and cater to evolving consumer preferences. Expanding geographical footprint reduces dependence on speci c regions, enhancing resilience against regional trade disruptions.

Developing direct trade channels and strengthening relationships with international suppliers and buyers to mitigate tariff-related barriers.

Threats:

Escalating tariffs, trade wars, and sanctions globally threaten the free ow of commodities, leading to increased costs and market uncertainties.

Rising logistics and supply chain costs, driven by geopolitical tensions and pandemic-induced disruptions, diminish margins. Fluctuations in foreign exchange rates and in ationary pressures further complicate pricing and pro tability.

Unpredictable monsoon patterns and climate change threaten crop yields, impacting domestic supply and exports. Labour shortages, especially in agricultural sectors, are exacerbated by migration, border restrictions, and labor laws. Global trade restrictions and protective tariffs can limit market access, requiring proactive risk management strategies. The company remains committed to navigating these risks through diligent risk assessment, strategic hedging, diversi ed sourcing, and operational exibility, aiming for sustainable growth in a volatile environment.

Segment ise and Product ise Perormance it a Global Trade Persectie:

Our core trading activities importing and exporting Sugar, Edible Oil, Pulses, and Lentils are in uenced heavily by global trade policies. Recent restrictions on sugar exports aimed at controlling domestic in ation have shifted our focus toward building domestic markets, establishing strategic depots, and creating a resilient supply chain. While these measures protect local farmers and stabilize prices, they restrict export volumes, compelling us to diversify into related sectors such as maize for ethanol, pulses, and other agri commodities.

Our global trade strategies include acting as reliable re-export partners, leveraging relationships with international suppliers from Australia, Canada, and other markets where trade barriers may affect market access. Additionally, to offset the impacts of trade restrictions, weve invested in expanding our international footprint through subsidiaries (in the UK), aiming to capitalize on global demand and maintain supply chain agility amidst geopolitical uncertainties.

Outloo and Strategic Resonse:

In response to the current global trade tensions, the company has recalibrated its strategy to strengthen domestic trading networks establishing depots in strategic regions and boosting sales of sugar, pulses, and maize for ethanol. Simultaneously, the company is investing in international trading capabilities to diversify supply sources and markets, thus mitigating tariff and quota risks. Our proactive risk management includes currency hedging to combat foreign exchange volatility, securin exible contractual arrangements with suppliers and buyers, and ensuring cargo insurance coverage. These measures safeguard our operations against physical, nancial, and geopolitical risks associated with global trade.

Riss and Concerns in a Global Trade and Tari Enironment:

Foreign Excange Ris: Currency uctuations are accentuated by global trade disputes and sanctions, which can impact pro tability.

Commodity Price olatility: Trade barriers and tariffs in uence the international pricing landscape, requiring dynamic sourcing and pricing strategies.

Trade Transaction Riss: Due diligence and nancial instruments such as letters of credit are crucial to navigate global trade complexities.

Pysical Cargo Riss: Insured storage and transportation mitigate losses due to geopolitical con icts, tariffs, and supply chain disruptions.

Internal Controls and Human Resources:

The companys internal controls are designed to swiftly adapt to uctuating trade policies and tariffs, ensuring operational integrity and open and professional satisfying work environment to its employees. The company also encourages its employees to continuously upgrade ad improves skills and competencies.

	For and on beal o te Board o Directors
	O Sauma Exorts Limited
Place: Mumbai	Saurab Malotra
Date: ..	Cairman & Managing Director
	DIN: