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NOTICE TO THE MARKET
Contracting od Financing

São Paulo, March 31, 2011 - São Martinho S.A. (BM&FBovespa: SMTO3; Reuters: SMTO3 SA and Bloomberg: SMTO3 BZ), one of Brazil’s largest sugar and ethanol producers, announces that it contracted a R$239 million line of financing with Brazilian Development Bank - BNDES, through Banco Itaú BBA S.A..

This line of financing refers to UTE (thermoelectric power plant) implementation project and the modernization of São Martinho mill, and it is composed of three lines which will correspond to 80.7% of total investments in these two projects: (i) co-generation line of financing, with 12-year term, long-term interest rate (TJLP) + 2,70% p.a.; (ii) agroindustrial line of financing with a 12-year term and cost of RATE(*) + 3.10% p.a.; and (iii) Finame PSI line of financing (BNDES Investment Maintenance Program), with a 10-year term and total cost of 5.72% p.a..

For further information, click here.

Sincerely,

João Carvalho do Val
Chief Financial and Investor Relations Officer

Felipe Vicchiato

Investor Relations Manager

Telefone: 11 2105-4100
Email: ri@saomartinho.ind.br
IR Website: www.saomartinho.ind.br/ir

About São Martinho

The São Martinho Group is one of the largest sugar and ethanol groups in Brazil, and operates three mills: São Martinho, in Pradópolis (in the Ribeirão Preto region of São Paulo state); Iracema, in Iracemápolis (in the Limeira region of São Paulo state); and Boa Vista (in Quirinópolis, 300 km from Goiânia, in Goiás state); as well as a unit producing a ribonucleic acid known as Omtek, which is also based in Iracemápolis. For more information, please visit the website at www.saomartinho.ind.br.