1. PPP – Commodities Group Hanoi, 08 th Dec., 2014

2. Objectives, strategies Overall objective targets : –An increase of 30% production of corn in key regions in 3 years (2014 -2016). –Up farmer’s profit to over 30% This objective is achievable through 3 priority strategies 1.Seeds  Conventional Hybrid  Biotech Trait 2.Production  Agronomic practices advancement  Post harvest services improvement 3.Increase add-value in corn trading

3. Source: MARD Vietnam will convert 83,000 ha of rice to corn in the Mekong Delta by 2020 TTTỉnh Diện tích ngô 2012 2013-2015 Diện tích chuyển đổi dự kiến 2016-2020 Diện tích chuyển đổi dự kiến Tổng diện tích đến năm 2020 (dự kiến) 1 An Giang 10.7 3.0 10.0 23.7 2 Đồng Tháp 4.6 7.0 6.0 17.6 3 Trà Vinh 5.5 2.0 6.0 13.5 4 Long An 4.0 3.0 4.0 11.0 5 Sóc Trăng 3.8 1.0 6.0 10.8 6 Tiền Giang 4.6 1.0 5.0 10.6 7 Hậu Giang 2.2 4.0 3.0 9.2 8 Vĩnh Long 1.5 2.0 5.5 9 Cần Thơ 1.1 2.0 5.1 10 Bạc Liêu 0.1 1.0 3.0 4.1 11 Kiên Giang - 3.0 1.0 4.0 12 Bến Tre 0.9 1.0 2.0 3.9 13 Cà Mau 0.5 - 3.0 3.5 Tổng số 39.5 30.0 53.0 122.5

4. Note: MKD = Mekong Delta, CMB = Cambodia Source: GSO, trader interviews This will triple Mekong Delta corn supply to 1,062 ktons by 2020 BasisGSO data300-800 tons/day (low-high season) pass through Khanh Binh, which is ~70% of imports 10% growth p.a. from Cambodia with better agronomy & seeds Converting Spring- Summer crop to corn @ 7 ton/ha Corn volumes ‘000 tons

5. Source: GSO, trader interviews There are >39 feed mills in Mekong Delta & South East region that will want Mekong Delta corn (2/2) Location (province) Feed mills Feed prdn Tons (2013) Corn dd tons/year Mekong Delta Long An Cargill, Japfa, Anova, Kyodo Sojitz, ANT, Thien Bang, Phuoc Thanh, Greenfeed, MB, CJ Vina, Nong Lam & Cao Phong 1,159,921 231,984 Tiền GiangCP, Sunjin, Chan Nuoi and Binh Minh 410,847 82,169 Vĩnh LongAnco 211,539 42,308 Cần ThơCargill, CPP, Proconco and Phan Bon 155,091 31,018 Đồng ThápGuyomarc'h, Vina, Viet Thang, VIC and New Hope 122,239 24,448 An GiangAfiex 26,300 5,260 Bến TreThanh Hung, Tan Loi and Thien An 9,320 1,864 Hậu GiangViet Long 1,130 226 Cà MauGiong NN 253 51 South East Region Bình Dương Proconco, ANT, Greenfeed, Sunjin, EH, CP, Cargill, Vina, Anco, Thanh Binh, Sao Xanh, Woosung, Gold Coin, & others 2,507,855 802,514 Đồng Nai Emivest, Guyomarc'h, Tien Dat, Thanh Loi, Thanh Dat, CP, Nutifarm, Ngoc Long, Ha An, Lai Thieu, De Heus & others 1,821,285 582,811

6. Source: GSO, trader interviews Local Mekong Delta demand will only be 868 k tons by 2020… BasisGSO dataBased on 40% corn inclusion on non-aqua feed volumes (50% of 2.1 million tons) Conservative 7% increase in feed mill demand (vs. market projections of 8.5%) Corn volumes ‘000 tons

7. Production South East - 2013: 1,313,450 MT, increase 5% per year Feed Mill production 2013: 4.481 Mil MT - 800 MT for aqual feed - corn used 40% Corn import from Cambodia forecast 200,000 MT in year 2013 increase 10% per year. 50% of Highland production move to South East, production 2013: 1,303,700 MT Source: GSO, trader interviews Binh Duong & Dong Nai can absorb this 194 kton excess by reducing imports of 455 ktons 1,016,000 tons from Highlands 455,000 tons imported 194 kton excess 312,000 tons from Cambodia

8. * Information from July 2014 Source: GSO, trader interviews Corn from Mekong Delta can be profitably sold to Binh Duong and Dong Nai for ~VND 6,000/kg… BasisPrice where corn can be shown to be more profitable vs. rice VND160/kg drying cost, 22% loss VND300/kg transport cost 5% VAT, VND200/kg margin, 0.1% shrink VND180/kg transport cost Corn price VND/kg

9. * Information from July 2014 Source: GSO, trader interviews This more competitive than corn from central highlands and close to parity with imported corn Central Highland Import Corn price VND/kg

10. Source: Bunge traders CNF prices have historically been over $245/ton, although it has fallen to ~$220/ton in August’14

11. Source: Bunge Mekong Delta corn can fill gaps in main US and Brazil imports Harvest Period Aug-Nov Sep-Nov Jan-Jun Sep-Oct Arrival in Vietnam

12. Source: Feed mill & trader interviews But there is a gap between what farmers can deliver and what feed millers want What farmers can deliverWhat feed millers want Financial terms Cash30 days credit Availability Supply as harvest & price (may not always sell if price not right) Sell ex-farm or delivered to local market Consistent supply to allow them to manage production & import orders Delivered to feed mill Quality Moisture: > 16.5% Mold: < 3.0% Foreign matter: < 2.0% Broken & discolor: 22-30% Moisture: < 15.5% Mold: < 1.0% Foreign matter: < 1.0% Broken & discolor: < 17%

13. Source: trader interviews Bridging the gap in expectations needs both physical and socio-economic post-harvest infrastructure Socio-economicPhysical Payment Terms Banks and/or traders willing to finance farmers n/a Availability Traders that will accept uncertainty and undertake transportation and aggregation Warehouse & storage to aggregate corn supply Transport and logistics to deliver corn to feedmill Quality n/aSufficient corn dryers – these dryers can be independent businesses or can be part of feed mills

14. Source: trader interviews Vietnam does not need to reinvent the wheel – it can draw on both international and domestic examples Vietnam has a working rice supply chain that in many ways can be used for corn Corn will be grown in areas currently used for rice Rice traders perform similar functions as corn traders (providing credit, logistics), and to some extent, rice dryers can be used for corn drying Both Thailand and Indonesia’s feed corn market share similarities with Vietnam Rely on both imported corn and local corn grown by farmers all across the country Feed mills located in just a few locations close to population centers Farmers farm small plots, live hand-to-mouth and rely largely on collectors/traders to buy their corn International Domestic

15. Source: Bunge Thailand In Thailand, collectors do much of the work – providing credit, drying and transporting FarmerCollectorFeedmill Limited quality control, typically sell with high moisture and & broken Rely on primary collectors who buy at farm gate, some of whom have sold them seed/inputs as loans Operate hand-to-mouth so trade on cash basis 2 groups of collectors - primary & secondary Primary collectors have small drying pads; secondary collectors have drying, screening equipment and can blend to quality Primary collectors have limited logistics ability; while secondary collectors have both storage and transport capabilities Primary collectors trade cash basis, while secondary collectors have financial ability to offer short credit Many feedmills own driers to take advantage of high crop seasons, buying from primary collectors All feedmill buy basis weight and quality delivered at feedmill Buy on credit, 7-14 days

16. Source: Bunge Indonesia In Indonesia, farmers and feed millers are more involved especially in drying FarmerCollectorFeedmill Some quality control esp. in Java, where some farmers sun-dry their corn Mostly sold to local collectors (Java) and feedmill direct (Lampung) Operate hand-to-mouth so trade on cash basis Have local & area collectors, and standalone dryers (mostly in Lampung where farmers harvest corn earlier / more moisture) Local collectors have limited drying ability, while area collectors can have drying, screening equipment and can blend to quality Collectors primary role is that of logistics provider, connecting farmer to feedmiller Primary collectors trade cash basis, while secondary can accept credit Many feedmills own driers both at feed mill or stand- alone close to corn growing areas Prefer to buy delivered, using collectors or 3 rd party transport Buy on credit, 7-30 days

17. Source: trader interviews Vietnam’s rice post-harvest supply chain can also be leveraged for corn FarmerCollectorRice mill Small scale farms that rely mostly on primary collectors who buy at farm gate Operate hand-to-mouth so trade on cash basis 2 levels of collectors - primary & secondary Primary collectors have small drying pads; secondary collectors have drying, screening equipment and can blend to quality Primary collectors will have limited logistic/transport capability; while secondary collectors have storage & transport capabilities Primary collectors trade cash basis, while secondary collectors will have financial ability to offer short credit Rice millers do not usually have dryers and focus on milling, polishing and storage Prefer to buy delivered, using collectors or 3 rd party transport Buy on credit as exports with LC payment terms

18. We recommend Vietnam takes the following steps for a successful conversion program in Mekong Delta Encourage rice supply chain participants to participate in corn by investing to convert existing dryers or install new ones Expand enterprise-directed rice farming scheme to allow feedmills to “contract” with farmers to plant corn – provide certainty of demand for farmers and certainty of supply for feedmillers Draw on Thailand & Indonesia’s experience to encourage feed millers to invest in corn dryers – allowing feed millers to buy corn more cheaply and expanding the number of potential buyers for farmers