8 th CIOC Guanzhou China South American Soybeans Production and Trading Marcos Rubin November 13th, 2013

8th CIOC Guanzhou China

South American Soybeans Production and Trading

Marcos Rubin

November 13th, 2013

Brazil – Grain Production (mmt)

Source: CONAB, Forecast Agroconsult.

35 40 37 38 37 43 48 46 47 49 52 55

52

7258

82

99

120 114

144135

166

189193

1,51,8

1,6

2,2

2,7 2,8

2,4

3,12,9

3,43,63,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

10

30

50

70

90

110

130

150

170

190 Area (mi ha)Production (mmt)Yields (ton/ha)

4,4%

2,9%

1,5%

Last 30 years growth.CAGR

30 years

Soybeans/Brazil – Production (mmt)

Source: CONAB Agroconsult

WeatherInstable

GrowthLimited

WeatherFavorable

GrowthGreat

Potential

WeatherFavorable

GrowthSome

Potential

WeatherInstable

GrowthGreat

Potential

21,316,3

13,218,2

22,9 20,6 18,425,6

28,5

18,6

30,7 32,3

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

12,9 15,017,9 16,7 15,4

17,8 18,0 18,8 20,4 21,8 23,526,3

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

14,5 13,9 15,6 15,1 15,0 15,1 15,1 17,1 18,0 17,519,8 20,8

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

3,24,6 5,6 5,0 5,1

6,5 5,77,2

8,4 8,4 8,1

11,0

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

Mato Grosso State

Southeast, Goias and Mato Grosso do Sul

South Region

MAPITOBA (Maranhão, Piauí, Tocantins and Bahia)

0,4 0,5 0,7 0,9 0,81,2

2,0 1,9

2,7 3,0 3,1

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Soybeans/South America – Production (mmt)

Source: USDA. Agroconsult

WeatherInstable

in some regionsGrowth

Great Potential

WeatherInstable

GrowthSome potential

WeatherInstable

GrowthSome

Potential

52,0 49,8 52,3 55,0 58,4 60,0 57,268,7 75,3

66,482,2 90,4

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

35,5 33,039,0 40,5

48,8 46,2

32,0

54,549,0

40,149,4 53,8

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

4,5 3,9 4,0 3,65,6 6,0

3,6

6,5 7,1

4,0

9,4 9,0

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Brazil

Argentina

Paraguay

Uruguay WeatherInstable

GrowthSome

Potential

Soybeans/South America – Production (mmt) vs Climate Risk

Deviation Probability %Y > +5% 7%

-5% > Y < +5% 87%Y < -5% 7%


-5% > Y < +5% 27%Y < -5% 33%


-5% > Y < +5% 67%Y < -5% 20%


-5% > Y < +5% 40%Y < -5% 27%

Source: Agroconsult. 2013/14 Crop year.


-5% > Y < +5% 40%Y < -5% 33%


-5% > Y < +5% 33%Y < -5% 33%

26,3

9,43,5

1,96,0

16,3

14,31,7

4,11,8

1,91,7

53,9

9,0

90,4 mmt

Soybeans/Brazil – Supply and Demand

Source: USDA, Forecast Agroconsult.

52 50 52 55 58 60 57

6975

66

8290

30 32 32 31 34 35 35 37 39 40

3842

20 20 2026 23 25

30 29 3036

4146

10

20

30

40

50

60

70

80

90

100m

mt

ProductionConsumptionExports

2,82

2,33 2,242,42

2,82 2,822,63

2,933,12

2,652,96 3,07

ton

/ ha Yields

Sensibility

2,65 ton/ha = 76 mmt3,12 ton/ha = 92 mmt

Soybeans/Argentina – Supply and Demand

3633

39 41

4946

32

5549

40

4954

25 26 2933 35 36

3336

39 3835

39

9 710 7 10

14

6

139 7 6

13

0

10

20

30

40

50

60m

mt Production

Consumption

Exports

Yields2,82

2,36

2,71 2,66

2,992,82

2,00

2,932,68

2,282,56

2,73

ton

/ ha

Sensibility

2,00 ton/ha = 39 mmt2,73 ton/ha = 58 mmt


Soybeans/South America(BRA+ARG+PAR+URU) – Supply and Demand

Yields

92 8796 100

114 113

94

132 133

113

144156

56 59 62 66 70 73 69 74 81 78 7685

32 30 33 36 38 44 3948 46 50 56

67

0

20

40

60

80

100

120

140

160

180m

mt Production

Consumption

Exports

2,82

2,32 2,40 2,45

2,85 2,77

2,30

2,88 2,87

2,43

2,80 2,91

ton

/ ha

Sum of each country

Max of 163 mmtMin of 123 mmt


Perspectivas para os Mercados Agrícolas 2012/13

Rally da Safra – The Brazillian Crop Tourwww.rallydasafra.com.br

2

118

3 4

15

8

14

15

9

2 3

15

10

57

17

8

14

22

15

21

2

1

33

1

1

32

3

5 3

3

31

8

107

1

7

104

13

9

56

16

9

46

15

12

76

1514

8 8

1716

12 12

2322

11

0

5

10

15

20

25

30

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4*

Milh

ares

Corn

Soybeans

2008 31 mmt

2009 36 mmt

2010 40 mmt

2011 42 mmt

2012 53 mmt

2013 67 mmt

Brazillian exports of Soybeans and Corn (mmt)

Soybeans and Corn/Brazil – Exports

Source: Secex. *Forecast Agroconsult

Milho Segunda Safra

Corn 2nd Crop / Brazil – Planted Area – Season 2003/04 Mato Grosso State – 15% Penetration

Source: Agrosatélite

Milho Segunda Safra

Corn 2nd Crop / Brazil – Planted Area – Season 2012/13 Mato Grosso State – 43% Penetration

Source: Agrosatélite

Soybeans /Brazil – Production and Exports Forecast (5 years)


52 50 52 55 58 60 57 69 75 6682 90

104

13

0

20

40

60

80

100

120

mm

t

20 20 20 26 23 25 30 29 30 36 41 4657

11

0

10

20

30

40

50

60

mm

tSoybeans Production (mmt)

Soybeans Exports (mmt)

45 42 35 42 51 59 51 56 5773 82 76

95

19

0

20

40

60

80

100

120

mm

t

4 51 3

8 8 7 9 12 13

27

17

27

9

0

5

10

15

20

25

30

mm

t

Corn /Brazil – Production and Exports Forecast (5 years)

Corn Production (mmt)

Corn Exports (mmt)


Source: DNIT, PAC, VALE, ALL, Ministério dos Transportes. Elaborated by Agroconsult

Santos

Santarém

Itacoatiara

Porto Velho

Itaqui

ALL MP

Rio Grande

São Francisco do Sul

Uruaçu

Extension of Norte-Sul Railway to Vila do Conde

ParanaguáLegend:HighwayRailwayWaterway

City

Port

Production Cluster

Colinas

Estrela d’Oeste

Santana

MirititubaMarabá

Alô Brasil

Querência

Balsas

Unaí

Catalão

Rio Verde

Ribeirão Cascalheira

Logistics – Main Projects / 5 years

Paving of BR-163 from Guarantã do Norte/MT to Santarém/PA + River Port of Miritituba/PA +

Port of Santana/AP

Paving of BR-158 from Alô Brasil/MT to Villa Rica/MT + River Port of Marabá/PA + Port of Vila do Conde/PA

Extension of Norte-Sul Railway to Estrela d’Oeste + BR-080 building from BR-158, at Ribeirão Cascalheira/MT, to

Uruaçu/GO

Vila do Conde

LEM

Uruçuí

Sorriso

2014

20162015

2013 (Auction)

South and Southeast:44,5MMT

84%

North, Northeast and Center-West:

8,2 MMT16%

Itaqui (6%)

Santos (37%)

São Francisco do Sul (8%)

Vitória (7%)

Santarém (2%)

Itacoatiara (4%)

Aratu (3%)

Rio Grande (10%)Current Ports

Logistics – Brazil Soybeans and Corn Exports

Paranaguá (22%)

Producing Regions Exporting Ports

Source: Secex. Elaborated by Agroconsult

2012

South and Southeast:75 MMT

46%

North, Northeast and Center-West:88 MMT

54%


61%

North, Northeast and Center-West:

43 MMT39%

Itaqui (11%)

Santos (26%)

São Francisco do Sul (6%)

Vitória (5%)

Santarém (6%)

Itacoatiara (4%)

Santana (5%)

Aratu (4%)

Vila do Conde (7%)

Rio Grande (7%)

Current PortsFuture Ports (Projects)

Logistics – Brazil Soybeans and Corn Exports

Paranaguá (17%)


43%

North, Northeast and Center-West:111 MMT

57%

Producing Regions Exporting Ports2022

Source: Agroconsult

6,91,9

2,9 1,0 12,8 0,4 0,8 13,912,0

On FarmCosts

Land Rent Dom.Freight

Trading/Operational

FOBCOST

Waiting(Oil, Demurrage)

Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

MT – Sorriso – Soybeans Break Even Cost (USD/bu)Current Routes: Port of Santos and Paranagua

New Route: BR-163 + Port of Miritituba + Port of Santarem or Santana

6,91,9

2,1 1,0 12,0 0,1 0,8 12,911,0

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

Santana

BR-163

Tapajós / Amazonas Santarém

Miritituba

Sorriso

Logistics costs: 25% Reduction

Sorriso

ALL

SantosParanaguá

Logistics – New projects in the MT State (North Region)


(8%)

Source: Agroconsult

0,95

0,22

0,56

0,41

0,12 0,09

0,70

0,11

0,42

0,20

0,08 0,05 0,14

0,04

0,27

0,06 0,03 0,03 Paranagua

Corridor(Public Terminal)

ParanaguaOthers

(Private Terminal)

SantosCorridor

(Prublic Terminal)

SantosOthers

(Private Terminal)

Itaqui Santarem

Max

Average

Min

Waiting (Oil and Demurrage) (USD/bu)

Logistics – Soybeans Waiting Cost of Shippers at Ports

Source: Agroconsult

6,6 2,02,8 1,0 12,5 0,4 0,8 13,7

11,7

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

6,6 2,02,3 1,0 12,0 0,04 0,6 12,7

10,7

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

MT – Querência – Soybeans Break Even Cost (USD/bu)Current Routes: Port of Santos and Paranagua

New Route: BR 158 + Port of Maraba + Port of Vila do Conde


Logistics – New projects in the MT state (East Region)


(7%)

BR-158Querência

Vila do Conde

Marabá

SantosParanaguá

ALL

Pederneiras

Paraná / Tietê

Querência

São Simão

Source: Agroconsult

6,6 2,02,8 1,0 12,5 0,4 0,8 13,7

11,7

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

MT – Querência – Soybeans Break Even Cost (USD/bu)Current Routes: Port of Santos and Paranagua

Logistics – New projects in the MT state (East Region)

6,6 2,02,6 1,0 12,2 0,08 0,6 12,9

10,9

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

New Route: BR-080 + FNS + Port of Itaqui



(6%)

Querência

Itaqui

BR-080Uruaçu

SantosParanaguá

ALL

Pederneiras

Paraná / Tietê

Querência

São Simão

FNS

Source: Agroconsult

MA – Balsas – Soybeans Break Even Cost (USD/bu)

PR – Cascavel – Soybeans Break Even Cost (USD/bu)

7,72,8 0,7 1,0 12,2 0,2 0,7 13,1

10,4

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

7,22,0 1,3 1,0 11,4 0,1 0,6 12,1

10,2

On FarmCosts


Trading/Operational

FOBCOST


Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

ItaquiFNS

BalsasPorto Franco

Cascavel Paranaguá

Logistics – Current logistics in the MA and PR state

Source: Agroconsult

U.S. / IOWA – Soybeans Break Even Cost (USD/bu)

ARG – North of BA – Soybeans Break Even Cost (USD/bu)

4,04,7 0,6

3,8 13,1 0,10 1,4 14,6

9,9

On FarmCosts


Trading/Operational

FOBCOST

Waiting(Oil,

Demurrage)

Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

Logistics – Brazil Competitiveness

6,0

5,11,0 1,0 13,2 0,06 1,2 14,4

9,3

On FarmCosts


Trading/Operational

FOBCOST

Waiting(Oil,

Demurrage)

Inter.Freight

CIF - ChinaCOST

CIF - ChinaCOST

(no land)

St. Louis

New Orleans

Davenport

Mississippi

Rosário

Junín35%

Export Tax

Source: Agroconsult


CIF Cost to CHINA – Comparison of BRA, USA and ARG (USD/bu)

14,0 13,7 13,1

12,1

14,4 14,6

12,9 12,7 ?

?

14,4 14,6

MT - Sorriso MT - Canarana MA - Balsas PR - Cascavel U.S.(PNW and Gulf)

Argentina(Rosario and B. Blanca)

CurrentFuture

12,1 11,7

10,4 10,2 9,3

9,9

11,0 10,7 ? ? 9,3

9,9



CurrentFuture

WithLand Rent

WithoutLand Rent

Source: Agroconsult


FOB Cost – Comparison of BRA, USA and ARG (USD/bu)

WithLand Rent

WithoutLand Rent

Source: Agroconsult

12,8 12,5 12,2

11,4

13,2 13,1

12,0 12,0 ?

?

13,2 13,1



CurrentFuture

10,9 10,5

9,5 9,4

8,1 8,4

10,1 10,0 ? ?

8,1 8,4



CurrentFuture

Source: Agroconsult. FOB Cost including land rent.

12,7USD/bu

11,6USD/bu

12,3USD/bu

12,1USD/bu

12,3USD/bu

11,5USD/bu

12,8USD/bu

11,4 USD/bu

10,9USD/bu

Soybeans FOB Costs (USD/bu)

Compound Average Soybeans FOB Cost :

USD 12,1 / bu

< 11,0 USD/bu

11,0 – 11,5 USD/bu

11,5 – 12,0 USD/bu

12,0 – 12,5 USD/bu

> 12,5 USD/buHighest

Lowest

11,1 USD/bu11,5

USD/bu

FOB Cost

Itaqui

Santos

São Francisco do Sul

Vitória

Santarém

Itacoatiara

Santana

Aratu

Vila do Conde

Rio Grande

Paranaguá

Current PortsFuture Ports (Projects)


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Documents

8 th CIOC Guanzhou China South American Soybeans Production and Trading Marcos Rubin November 13th, 2013