1. Absa AgriBusiness Presenter name Subject Agrimark trends Agric outlook 2 October 2008 Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no responsibility for actions or losses that might occur due to the usage of this information.

2. Absa AgriBusiness Agricultural outlook - Content General market trends Field crops –Maize, Wheat, Sunflower, Soya Fibre –Cotton, Wool, Mohair Livestock –Poultry, Pork, Beef, Mutton, Dairy Ostrich Vegetables –Tomato, Potato, Cabbage, Carrots

3. Absa AgriBusiness

4. Economic market principals with in agriculture Comments South African farmers face a 60% plus price exposure to the outside world and are therefore by implication global players in a global market. They therefore have very little control over pricing levels and tend to be price takers, with prices ranging between import parity and export parity depending on local supply and demand resulting in increased price volatility Factors influencing prices over which they have no control are international production trends, international farming subsidies, exchange rates, import and export tariffs. Production risk due to nature also contributes to production volatility which in turn lead to an increase in price volatility Framers therefore have to manage PRICE and PRODUCTION if they want to make a success of their business

5. Absa AgriBusiness New Market environment – Technology is changing the world Pointers Demand technology Taste enhancement / Packaging / Presentation / Time value enhancements Variety, safety and convenience is taken as a given Information technology Connectivity Here now attitude Transport technology World is becoming a smaller place Delivery just in time Storage technology Improved shelf life No more seasonality Production technology GMO’s - Selection / fertilizers etc. Productivity enhancement

6. Absa AgriBusiness Agric Cost curve

7. Absa AgriBusiness Economic market principles within agriculture Cost curve In the long term agriculture is experiencing a cost curve of approximately 3% per annum (The price of Farming requisites increases faster than producer prices however for 2008/09 season we expect a cost curve of more than 30% To survive this, farmers need to become more productive (increase output in relation to inputs) this is mainly done by: Improving production efficiencies (use of technology) Value adding Lowering fixed costs (economies of scale) World agriculture is poised to enter a new growth phase that will be much greater than colonization and industrialization. During the period of industrialization after the second world war, agricultural production expanded exponentially, compared to the growth in population (due to the development of fertilizer and production machinery). Production of coarse grains, beef and mutton however peak during mid eighties as these commodities were mainly dependent on the availability of natural resources. Commodities like poultry and pork continued to grow as they were able to utilize surplus coarse grains. Production has however once again since the mid nineties started to increase due to advances in geo-technology (GMOS etc.) The net effect of the above is that production volumes will continue to increase thus improving the survival potential of agriculture in general

8. Absa AgriBusiness Agricultural economic indicators

9. Absa AgriBusiness Economic market principals with in agriculture World agriculture commodity prices to increase substantial over the medium term. There are two main driving forces at work that will have a positive impact on agricultural commodity prices namely: Global Warming Sentiment around global warming is driving legislature around the world to continuously push for the implementation of so-called carbon friendly legislation. As agriculture is the prime beneficiary this type of legislation (due to the ability of plants to extract carbon from the air) new markets will place upward pressure on agricultural commodity prices. Agriculture could however never produce enough energy to replace all fossil fuels. Demand for Food and Energy During the late nineties Capitalism replaced Communism as economic system in the world (signs of the time where the collapse of the Berlin wall in ’98 the repatriation of Hong Kong in to China in ‘99) This led to an exponential economic growth in Eastern European, Middle East and Asian countries with a resulting increase in the buying power of these consumers, hence the growth in demand for food and energy

10. Absa AgriBusiness Grain industry outllok

11. Absa AgriBusiness

12. Agricultural outlook - Content General market trends Field crops –Maize, Wheat, Sunflower, Soya Fibre –Cotton, Wool, Mohair Livestock –Poultry, Pork, Beef, Mutton, Dairy Ostrich Vegetables –Tomato, Potato, Cabbage, Carrots

13. Absa AgriBusiness World maize trends

14. Absa AgriBusiness South African maize trends

15. Absa AgriBusiness SA Yellow maize price trends

16. Absa AgriBusiness SA White maize price trends

17. Absa AgriBusiness World sunflower price trends

18. Absa AgriBusiness South African sunflower price trends

19. Absa AgriBusiness South African sunflower price trends

20. Absa AgriBusiness Soyabean world trends

21. Absa AgriBusiness SA Soyabean trends

22. Absa AgriBusiness World wheat trends

23. Absa AgriBusiness SA wheat trends

24. Absa AgriBusiness SA Wheat price trends

25. Absa AgriBusiness Agricultural outlook - Content General market trends Field crops –Maize, Wheat, Sunflower, Soya Fibre –Cotton, Wool, Mohair Livestock –Poultry, Pork, Beef, Mutton, Dairy Ostrich Vegetables –Tomato, Potato, Cabbage, Carrots

26. Absa AgriBusiness World fibre production trends

27. Absa AgriBusiness World cotton trends

28. Absa AgriBusiness SA cotton price trends

29. Absa AgriBusiness

30. SA Wool price trends

31. Absa AgriBusiness World mohair production trends

32. Absa AgriBusiness Mohair price trends

33. Absa AgriBusiness Agricultural outlook - Content General market trends Field crops –Maize, Wheat, Sunflower, Soya Fibre –Cotton, Wool, Mohair Livestock –Poultry, Pork, Beef, Mutton, Dairy Ostrich Vegetables –Tomato, Potato, Cabbage, Carrots

34. Absa AgriBusiness Poultry production trends

35. Absa AgriBusiness Poultry Price trends

36. Absa AgriBusiness Pork price tends

37. Absa AgriBusiness SA Beef Herd Numbers

38. Absa AgriBusiness SA Beef prices

39. Absa AgriBusiness Mutton Price trends

40. Absa AgriBusiness SA Producer milk price trends

41. Absa AgriBusiness

43. Domestic Ostrich Live Bird and Skin prices

44. Absa AgriBusiness Agricultural outlook - Content General market trends Field crops –Maize, Wheat, Sunflower, Soya Fibre –Cotton, Wool, Mohair Livestock –Poultry, Pork, Beef, Mutton, Dairy Ostrich Vegetables –Tomato, Potato, Cabbage, Carrots

45. Absa AgriBusiness Cabbage market trends

46. Absa AgriBusiness Carrot market trends

47. Absa AgriBusiness Onion market trends

48. Absa AgriBusiness

49. Summery – every thing is market driven

50. Absa AgriBusiness Thank you for the opportunity to share some ideas Contact details E Janovsky Tel (011) 350 6102 Email ernst.janovsky@absa.co.zaernst.janovsky@absa.co.za Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no responsibility for actions or losses that might occur due to the usage of this information.