ASBA conference – Sugar view

Michael Levitz

What We Do

We are a specialist merchant of sugar, coffee and

molasses products.

We provide access to commodity and capital

markets through our brokerage business.

We control the whole commodities supply chain, from

sourcing, processing, marketing, distribution and

transport.

We manage the risks associated with global supply

and demand. We are a specialist merchant of sugar,

coffee and molasses products.

We are an operator of 40 supramaxes and ultramaxes

vessels.

Our achievements

Leading global sugar merchant and trader

Leading global trader of Arabica, Robusta and

speciality coffees

Leading global supplier of liquid animal feeds

World no.1 in molasses

Significant global infrastructure and distribution

capabilities

Key Facts

Established in 1783

Over 7,000 employees operating in around 60 countries

Employee owned

2016 Profit Before Tax = $101.9m

Accounting for 19% of global sugar trade flows, trading in

excess of 10m ton of sugar.

Accounting for 11 mln bags of coffee trade flows.

Trade about 3 mln ton molasses, representing 50% of the

World Market.

Multiple Businesses

Coffee Business

Sugar Business

Liquid Products

Capital Markets

Global insight, local expertise

Sugarcane

Crops

Beets

Same product but different production systems

Sugar production per feedstock (2016/17)

Cane vs. beets

Source: USDA and ED&F Man Research.

Beet, 22%

Cane, 78%

Cane leads sugar supply

Map of sugar production per type of feedstock

Cane vs. beets

Beet Sugar

Both

Cane Sugar

Source: ED&F Man Research.

Overall, cane is concentrated in tropical and subtropical regions

Top producers (2016/17)*

Production vs. consumption

*National crop year basis Source: ED&F Man Research.

Top consumers (2016/17)*

Top producers/consumers represent about 70% of World supply and demand

39

20

15

10

10

8

7

6

51

Brazil

India

EU

China

Thailand

US

Pakistan

Russia

Others

25

17

16

11

10

7

6

6

5

66

India

EU

China

US

Brazil

Indonesia

Russia

Pakistan

Mexico

Others

Mln ton Mln ton

Map – Surplus vs. deficit

Surplus vs. deficit

Source: ED&F Man Research.

Surplus

Deficit

Oct/Sep

Apr/Mar

Timing of exports according to crop seasons

Top exporters (2016/17)

Main exporters and importers

Source: ED&F Man Research.

Top importers (2016/17)

Main exporters represents 85% of the market while top importers share is less than 50%

25

3

4

1

1

4

3

4

2

1

1

1

1

11

Brazil

Thailand

Australia

India

Guatemala

Myanmar

UAE

EU

Mexico

Others

Whites

Raw

Mln ton

5

2

2

2

3

2

2

2

2

16

3

1

1

20

Indonesia

China

EU

US

Bangladesh

India

Algeria

Malaysia

South Korea

Others

Whites

Raw

Mln ton

Sugar exporters ranking

Sugar trade history

Source: USDA and ED&F Man Research.

0

2

4

6

8

10

12

Cuba EU Brazil

Cuba EU and Cuba Brazil

3 well defined stages

Mln ton

Whites sugar share traded

Sugar trade history

Source: USDA and ED&F Man Research.

0

10

20

30

40

50

60

70

0%

10%

20%

30%

40%

50%

60%

White share

Total exports(RHS)

%

Oil crisis

Brazil Proalcool

programme

EU sugar

reform

Mln tonStand alone refineries era

Cuba decline

Brazil and EU dominating the WM

FFV Brazil

Brazil main exporter

2016 - Main bulk sugar flows

Bulk

Source: ED&F Man Research.

2016 - Main bagged sugar flows

Bagged

Source: ED&F Man Research.

Sugar consumption index per regions (1975/76 = 100)

Consumption growth

Source: ED&F Man Research.

0

100

200

300

400

500

600

1975

/ 76

1976

/ 77

1977

/ 78

1978

/ 79

1979

/ 80

1980

/ 81

1981

/ 82

1982

/ 83

1983

/ 84

1984

/ 85

1985

/ 86

1986

/ 87

1987

/ 88

1988

/ 89

1989

/ 90

1990

/ 91

1991

/ 92

1992

/ 93

1993

/ 94

1994

/ 95

1995

/ 96

1996

/ 97

1997

/ 98

1998

/ 99

1999

/ 00

2000

/ 01

2001

/ 02

2002

/ 03

2003

/ 04

2004

/ 05

2005

/ 06

2006

/ 07

2007

/ 08

2008

/ 09

2009

/ 10

2010

/ 11

2011

/ 12

2012

/ 13

2013

/ 14

2014

/ 15

2015

/ 16

South Asia

Southeast Asia

East Asia

North Africa

Middle East

South America

North America

EU

Index

Asia and Africa are keeping strong demand while Americas and EU are showing lower gains

Supply and demand

Source: ED&F Man Research.

9.9 7.1

-9.7 -2.2

2.8 8.9 13.7 9.0 5.5

-3.7

0.3 5.8

10.1

11.7

16.4

21.7

28.5

22.4

17.816.6

12.7

16.617.5

?

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

S&D NY no11

World supply and demand vs. prices (Oct/Sep)

Starting a surplus cycle

EU new sugar regime

+ Asian crops

+ unchanged Brazil C/S

Mln ton cUS$/lb

Brazil – Bulk vs. bagged exports

Bulk vs. bagged

Source: ED&F Man Research.

The decline of the white sugar exports has created opportunities for refining companies in

West and North Africa, Middle East and Far East, promoting Brazil raw sugar production

1315 14

16

19

2321 21

2322 22

24

4 4 5 4 5 54 4 4

3 3 4

25%23%

24%

22%

20%18%

15% 15% 14%

11%13% 13%

0

5

10

15

20

25

30

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bulk Bagged Share bagged (RHS)

Mln ton %

Brazil – Bulk vs. breakbulk

Bulk vs. Breakbulk

Source: ED&F Man Research.

18 17 18

21

2523 22

24

22 23

25

1 2 2 2 3 2 2 2 2 2 3

5%

9%

12%

9%

11%

9%

10%9% 9%

10%

11%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Breakbulk Container Container share (RHS)

Lower cash flow and less risks to tradings have also promoted containers

exports

Mln ton %

Brazil – Number of vessel per size

Size of the vessels

Source: ED&F Man Research.

17 27 14 2242

62 52

99 114 127 113142

222 225 212 211

267 275298

239271 271 273

301

555511

543 538 540584

464

402380

234

289256

2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006 2006

Above 50k 30k - 49k Below 30k

Economy of scale gain importance especially when exporting to big importers in

Asia.

Units

Takeaways

• Larger vessels of breakbulk sugar

• Less breakbulk vessels of bagged sugar

• More containers of bagged sugar

Thank you!