AAAC (WA) Outlook Day 27th November Presented by Stephen Moyle InVivo Trading Asia

Transcription

1 1 AAAC (WA) Outlook Day 27th November 2015 Presented by Stephen Moyle InVivo Trading Asia

2 Union InVivo A French union of Agricultural Co-operatives 8,000 employees, 60% outside of France 4 fields of expertise Agriculture Animal Nutrition and Health General Public Distribution Wine Sites in 28 countries billion in revenue in November 2015

3 Agriculture Co-operatives in France 2,800 Coopératives, unions and SICA 11,500 CUMA (combines used in common) 160,000 Employees 84.3 billions Consolidated revenues 75% of farmers are members of a Coopérative -3- Source: Coop de France

4 Group revenue at 30 June 2015 Estimated ANIMAL NUTRITION AND HEALTH 1.4bn GENERAL PUBLIC 530m International 2.6bn 5.5bn Seeds and Agricultural Supplies 1.6bn AGRICULTURE 47% 53% France 2.9bn Grains 2bn 5.5bn is approx AUD8.02bn Australian co-op in 2014 was AUD4.4bn -4- November 2015

5 Storage and Logistics 1.5 MMT of certified capacity ISO 9001 and Food Quality Charter ISO 9001 and Food Quality Charter 5.75MMT loaded / 650,000mt dried No. 1 grain Storage company in France 475 wagons Magestiv: rail transport freight-forwarding subsidiary Rouen and Dunkerque: are the deliverable silos for the Matif contract Dunkerque Nantes Rouen La Pallice Blaye Bordeaux Santes Chalons en Champagne La Grande Paroisse Saint-Usage Illange Metz Frouard Neuf-Brisach Ottmarsheim Huningue Baja Hungary Bayonne Les Tellines Port-La-Nouvelle -5- Mass Céréales Morocco Managed capacities Silos with InVivo share November 2015

6 Topics Covered French + Global Wheat Balance Sheets Change in physical Trade Flows Low Segment Flour Market in Indonesia Black Sea Production continues to Grow Population Growth and Aussie Quality Profile Vs Black Sea Depreciating Currencies in SEA Aussie wheat at a cross roads -6-

7 Global Wheat Balance Sheets -7- Balance Sheets for AUS/ARG/Can/USA/EU/RUS/UKR (000's) Balance Sheets Beginning Stocks 68,863 62,825 48,452 50,214 58,290 Planted Area 100,869 98,687 99, , ,929 Harvested Area 100,218 94,138 97,595 99,194 99,503 Yield Production 325, , , , ,997 Imports (Total) 31,724 28,284 28,907 32,905 32,935 Supply Total 426, , , , ,282 Domestic Total 218, , , , ,971 Exports (Total) 141, , , , ,010 Flour Exports (Total) 4,284 4,399 4,303 4,710 4,158 Total Use 363, , , , ,139 Ending Stock 62,372 47,193 49,729 58,290 65,143 Stock to Use 17.1% 14.1% 13.9% 15.8% 17.6% Consumption is Increasing but not in line with Production Yields are steadily improving with more scope to increase Especially from Black Sea/EU regions In 1965 Russia was harvesting from 65mln Ha last year was only 39mln Ha

8 French Wheat Balance Sheet Balance Sheets Beginning Stocks 3,576 2,933 2,280 2,901 2,349 2,519 Planted Area 4,898 4,990 4,865 4,983 5,007 5,162 Yield Production 35,487 33,970 35,529 36,867 37,452 39,644 Imports from EU 1, Supply Total 40,184 37,287 38,455 40,220 40,690 42,679 Domestic Consumptions 9,823 9,747 9,556 9,245 9,299 9,325 Feed Use 6,699 7,939 7,690 8,434 8,595 9,100 Exports (Total) 19,540 16,040 17,080 19,024 19,243 17,354 Flour Exports (Total) Total Use 37,251 35,007 35,554 37,871 38,171 36,834 Ending Stock 2,933 2,280 2,901 2,349 2,519 5,845 Stock to Use 7.9% 6.5% 8.2% 6.2% 6.6% 15.9% -8- French exports makes up 6% of global wheat exports Record crop last year of nearly 40MMT 5 year yield avg of 7.32mt/Ha

9 French Wheat export to 3rd Origin countries 2014/15: Poor Quality crop Feed wheat export to Asia Bigger volume to Egypt Lower export to Algeria /16 record crop Better quality YonY Basis 10.8M T export = 5M t ending stock French has to become more competitive

10 Global Trade Flows Region 1 North, South & Central America + Caribbean Region 2 Europe, Black Sea, Middle East and Africa Region 3 Oceania and Asia -10-

11 Wheat Trade by Region To From 2011/12 Region 1Region 2Region3 Region Region Region To From 2012/13 Region 1Region 2Region 3 Region Region Region From From To 2013/14 Region 1 Region 2Region 3 Region Region Region To 2014/15 Region 1 Region 2 Region 3 Region Region Negative trend from Region 3 to Region 2 Negative trend from Region 3 to Region 3 Positive trend from Region 2 to Region 3 Region November 2015

12 Indonesian Flour Market Indonesia s most competitive flour market is also one of the fastest growing Low Segment Flour mill the cheapest wheat available Total Imports (000's MT) Season (jul/jun) USA AUS CAN BS/EU Other Total ,373 1, , ,164 3,720 1, , ,423 1, , , , , , , , , , ,422 1, ,469 % of Total Imports Season (jul/jun) USA AUS CAN BS/EU Other % 60% 25% 7% 0% % 52% 16% 9% 6% % 66% 18% 1% 7% % 72% 13% 1% 0% % 70% 16% 0% 1% % 64% 14% 9% 0% % 56% 21% 7% 1% % 32% 32% 0% 14% -12- Source: Aptindo

13 EU Production Continues to Improve Record 149M T Record crop in France and Baltic countries Decreases YonY -2.8 UK, Germany, Poland, Romania ,4M T +2,2M T - 1,4M T +1,8M T - 0,7M T - 0,3M T- 0,5M T Increase YonY +4.5 France, Baltics, Bulgaria

14 Black Sea Growing 2015/2016 Romania Bulgaria Serbia Ukraine Russia Total Carry In Production Imports Total Supply Domestic Cons Exports total Demand Carry over Stocks to Use 11.01% 10.77% 14.40% 12.74% 12.73% 12.56% /2026 Romania Bulgaria Serbia Ukraine Russia Total Carry In Production Imports Total Supply Domestic Cons Exports total Demand Carry over Stocks to Use 5.11% 8.06% 18.57% 13.04% 11.60% 11.35% % Change In production 83.10% 25.36% 16.05% 17.65% 33.33% 32.07% Change in Stocks to Use 5.90% 2.71% 4.17% 0.30% 1.13% 1.21% Significant Increase in forecasted production Based off increase acreage and improving technologies Stocks to use ratio declining overall which means its being used

15 New Demand frontier - Africa Population Growth Region/Country Africa 29% 32% 31% 28% 29% 27% 24% 19% Nigeria 27% 32% 29% 29% 31% 28% 26% 21% Asia 27% 22% 20% 14% 11% 9% 6% 3% China 28% 16% 17% 6% 5% 3% 0% 2% South East Asia 30% 26% 21% 16% 12% 10% 7% 4% Indonesia 30% 26% 19% 15% 14% 10% 7% 4% Europe 7% 5% 3% 0% 1% 0% 1% 2% The Americas 23% 21% 18% 15% 12% 9% 7% 4% Oceania 23% 16% 17% 15% 18% 14% 11% 8% The World 22% 19% 18% 14% 13% 11% 9% 6% Total Population 3,322, ,061, ,852, ,735, ,519, ,349, ,141, ,396, Population boom has happened in SEA Africa still has substantial growth prospects from 2015 onwards Is Australian wheat positioned to feed African population growth? USD2 freight advantage over Black Sea to Nigeria -15- Source: United Nations

16 Australian Wheat Quality Consistency Black Sea is getting better, Australia is going the other way Is Aussie mkt blending away premium? we can see the ASW, the AGP and the AUH Blending in a perfect world vs the reality of physical execution Moisture Russia is now offering 12% max moisture vs 11.5% max Other parts of EU/Black Sea are still 13.5%+ on moisture -16- Protein 12.5% is the base grade MW of BS/EU which is 11.1% Aussie equivalent 11.5% is the APW2 equivalent (base grade) of BS/EU which is 10.2% Aussie equivalent Gluten

17 Specifications and Prices Low Protein MW Comparison Mid Protein MW Comparison Specification Australian Russian French Baltic German Specification Australian Russian Baltic German Protein (on DMB) Min 10.2% Protein (on DMB) min 11.1% = min 11.5% min 11% min 11.5% min 11.5% Min 12.5% Min 12.5% Min 12.5% = 11.5% 12.5% Test Weight Test Weight min 76kg/hl min 77kg/hl min 77kg/hl min 77kg/hl min 77kg/hl min 78kg/hl min 78kg/hl min 78kg/hl min 78kg/hl Moisture max 11.5% max 12.0% max 13.5% max 13.5% max 14.0% Moisture max 11.5% max 12.0% max 13.5% max 14.0% Falling Number min 300 secs min 250 secs min 250 secs min 250 secs min 250 secs Falling Number min 300 secs min 280 secs min 280 secs min 280 secs Foreign Material max 2% max 2% max 2% max 2% max 2% Foreign Material max 2% max 2% max 2% max 2% USD FOB Jan $ $ $ $ $ USD FOB Jan $ $ $ $ Freight $ 7.50 $ $ $ $ Freight $ 7.50 $ $ $ USD CFR Indonesia $ $ $ $ $ USD CFR Indonesia $ $ $ $ Moisture Moisture $ $ $ $ $ Allowance Allowance $ $ $ $ APW2 FIS AUD285 APW1 FIS AUD Black Sea/EU specs are converging closer to Aussie Milling Wheat Black Sea guarantee Wet Gluten Spec s as its tested up country Magic number to displace Aussie wheat seems to be around USD10-15 pmt November 2015

18 Currencies in Emerging Markets Open High low last % change at high % change at low % change at last IDR % 0.00% 10.78% VND % -0.62% 5.18% MYR % 0.00% 21.28% THB % -1.64% 8.69% Indonesian Rupiah as at 24/11-18-

19 Australian Wheat at a cross roads Mace was a great improvement We use to avoid WA until Mace took off we can see the ASW, the AGP and the AUH We invest USD mln in wheat each year so of course we test it, we own 9 laboratories we test every 50 tonne or if we see a problem every 20 tonne General theme from consumers in terms of extraction EA>SA>WA Premium flour markets in Indonesia are made from Canadian MW not Aussie -19-

20 Thank you for your attention Any Questions? -20-