June 2016

Dear Madam, Sir, Herewith the latest Trouw Price Trends on Market Report of week 22 (June 2016). Our Market Report contains useful information for your procurement and purchasing team as well. In case you would like us to send it directly to your team from now on, please inform us by sending us their email addresses and their function. We would be pleased to facilitate this for you. Hopefully this information will be sufficient. With this information we shares our goals to enable customers to purchase sustainable nutritional solutions, we continued engage with our partners in the feed-to-food value chain to establish, control and manage systems for sourcing sustainable raw materials in a responsible way. In each issue of our Trouw Price Trends information we are pleased to keep sharing the latest updates on the world grain market as well as raw materials information with you, our prestigious customers. Together we will have stronger partnership in exchanging information to keep our industry growing and have more sustainable future.

With our best regards,

Trouw Nutrition Team

U.S. wheat supplies for 2016/17 are projected up 6 percent from 2015/16 on higher beginning stocks and imports. All wheat production is projected at 1,998 million bushels, down 3 percent. The year- to-year decrease is due to a sharp reduction in planted area that more than offsets increased yields. The all wheat yield is projected at 46.7 bushels per acre, up 7 percent from the previous year. The survey- based forecast for 2016/17 winter wheat production is up with higher yields more than offsetting reduced harvested area. Winter wheat has benefited from excellent spring growing conditions and yields are projected higher for Hard Red Winter, Soft Red Winter, and White Winter. Spring wheat and Durum production for 2016/17 is projected to decline 16 percent on lower area, as well as a return to trend yield, which is below last year’s level. Global corn production in 2016/17 is projected up sharply from last year, driven by larger crops for the United States, Argentina, South Africa, and the EU. Global consumption is expected to rise to a record, reflecting growth in feed use for China and the EU. Global import demand is expected marginally lower, driven by the EU and China. Global ending stocks are forecast down slightly as a drawdown in China more than offsets a build-up in the United States.

Market developments Powders All dairy commodities are moving up. Cheese, Butter, SMP, WMP and SWP are traded much higher, which is good news for the farmers. We expect that milk prices will the go up. Mostly that will take 3 months after the first increase of Dairy commodity prices. What will happen the coming months? Brussels will probably increase the volume that is allowed to go to intervention from 218.000 MT (already in Stock) towards 330.000 MT. Taking so much SMP out of the market is already having impact and will have more impact. So we expect that SMP Food prices will increase further. The next 1.5 year prices will move between levels of 1,750 euro and 2,500 euro. As soon as prices are well above 2,000 euros Brussels will start selling stocks, which will make prices decrease again to levels of 1,900 euros. Brussels will keep on selling the stocks as long as the market can handle this. A lot of other commodities are following the prices of SMP and are traded this week much higher compare to last week. Also SMP feed will follow the SMP food price development. Market developments General Demand is not firm yet, but the increasing prices are having a positive impact on short-term demand, because a lot of buyers understand that last month prices have been historical low and everybody still wants to buy at current low levels, but producers are only willing to sell at higher prices. New Zealand is soon out of their milking season and also EU will soon go into their low milk production cycle. In combination with the huge intervention stocks, it is fair to assume that supply will become smaller than demand.

Market developments: vegetable Fats Crude oil prices went up unexpectedly which is having a positive impact on the vegetable oil prices. Palm prices are still around 710 / 730 euros and are likely to stay around those levels till at least end of August. Coconut oil prices are moving up and down and between levels of 1,400 / 1,550 euros. Supply is tight but demand is also getting weaker, so we do not expect a lot of change in the coconut oil.

International milk price

DL-Methionine is stable at low. All supply are sufficient. Price is around USD 4. L-Threonine, entering hot summer, will be a challange to fermentation for l-threonine. It may affect the output but haven’t confirm yet as summer just started. The prediction of L-Threonine price will increase

DL-Methionine price

Vitamin A price

Citral shotage problem is still continuing. For manufacturer that using citral as their raw material, are struggle to have it. It is not easy to replace citral. Some suppliers predict citral producer will start operate in Q4 2016 and condition will be back to normal in Q1 2017. Current price level of Vit A1000 is increase again to USD 65. Stocks is extremly tight, and price in China is USD 90-100. Vit A500 also increase above USD 32. Vit AD3 has been offered more than USD 85 due to very tight supply. Vitamin E50 price is stay at high price USD 9.00-USD 10.00. Even facing the same shortage of raw material, the raw material itself is quite replaceable. The supply still not much but people manage to cover their needs. Vitamin B1 we have seen low price offered in the market. Maybe some traders are overload with stocks and since they don’t see price further up, they start to liquid the stocks. However two major producers in China are very firm to keep price above USD 46. Vitamin B2, suppliers keep it in the high side, but some traders start to liquid it slightly below market price. Price ranging at USD 40.

Vitamin B2 price

Vitamin K3 MSB/MNB, the price is stable at low level.

Calpan, demand for calpan is not as strong as expected even manufactures stop quoting since last month. Some suppliers already reduce the price. Price range about USD 40 Vitamin B12 manufacturers keep their offers in high level and keep trying to increase the price as demand still quite strong. Price level For vit B12 1% is at USD 32. Biotin 2% price maintained stable at high level for the time being, demand are stil strong. Price range about USD 13. Vit B9 (Folic acid) price is stable and stay in low level. Price range around USD 54. Vit B6 keep low ans steady. Price for new stock around USD 25 but some traders still hold old stock and prefer to liquid it around USD 31. Vit D3 500, demand are not as strong as expected. Suppliers reduce the price to USD 20 and in downtrend if demand not picking up. Vitamin C series prices are stable due to sufficient supply. NCPC one of the biggest Vit C producers is stop producing. They relocate their production to avoid environmental problem, however it’s not make any effect in the market as other suppliers can cover the demand.

For mineral, most of it are stable or soften due to price of LME that also weak. Zinc Sulphate, MCP and DCP are more in down trend due to weak demand.

MCP price

Ms. Karren Kim at karren.kim@trouwnutrition.com

Disclaimer: Trouw Nutrition does not warrant or make any representations regarding the use, validity, accuracy, or reliab ility of, or the results of the use of, or otherwise respecting, the information/data in this report.

Trouw Price Trends is an external e-newsletter provided by Trouw Nutrition.

TPT0006/16/TNAP

For further information please contact