1. Grain Price Outlook China

2. A picture of China

3. 3 Food Fuel Feed Fibre

4. 4 Meat is on the menu Animal Protein Consumption in China Source: FAO, Rabobank

5. 144 million tonnes 2015 24 million tonnes more than 2010 67 million tonnes more than 1996

6. Making ends meat How much grain does it take? Pork = Poultry = Beef = 3.4 1.8 8.0 Fish =1:2

7. So how much grain is that? Pork = 170 million tonnes Poultry = 54 million tonnes Beef = 12 Million tonnes Total = 270 million tonnes +

8. A Self Sufficient China? 117 million tonnes of wheat 191 million tonnes of corn 13.5 million tonnes of Soybeans Total = 321 million tonnes +

9. 321mmt Wheat = 96 million tonnes human consumption. -270mmt =51mmt

10. China’s Plan

11. 1993: Deregulation on grain circulation system Starting the liberation of the grain price; 2000: With excessive stocks, government encouraged the development of livestock raising and deep processing industry to consume more aging grain inventory; 2001: Four grain-based bio- ethanol planted were established; 2002: Starting to distribute seed subsidies to farmers; 2004: Agriculture tax was eliminated; direct subsidies on grains; subsidies on agriculture machineries More focus on stabilizing production, increasing farmers’ income & improving rural infrastructures 2007: General subsidy for agricultural production supplies; restriction on the development of corn industry usage to guarantee the feed corn consumption Chinese Government Policy

12. Is it working?

13. Valid since August 1 st 2006, the Ministry of Land and Resources adopted “The Measures for the Examination on the Balance between the Occupation and Supplement of Arable Land”, with the emphasize on cultivated land requisition-compensation balance, not only in terms of quantity but quality as well Cultivated land acreage is stable

14. ½ Mu 1/30 hectare 3000 hectares 90,000 chinese farms

15. 15 East meets West

16. 16 Chinese Corn Import Forecast

17. 17 Feed Wheat Demand

18. 我餐麥

19. Grain Prices

20. 20 Wheat FOB prices

21. What went wrong?

22. 22 Supply Response

23. 23 Tough Competitors

24. 24 Black Sea

25. 25 Aus Ending Stocks vs. Exports

26. 26 Eurozone Organisational Chart

27. 27 GDP Growth

28. 28 China’s GDP as a % of US 46% 11% 70%

29. When written in Chinese the word “crisis” is composed of two characters. On represents danger and the other opportunity.

30. 30 Speculators 46% 11% 70% Investor concerns over supplies could lead to short covering rallies

31. 31 The Forecast - Wheat 387% increase unitQ1'12 (f)Q2'12(f)Q3'12(f)Q4'12(f) CBOTUSD/mt235231226219 CBOTAUD/mt224229222212 CBOTUSDc/bu640630615595 Quarterly Price Forecast in $/mt Wheat price forecast

32. 32 The Forecast - Canola 387% increase Wheat price forecast Soybean price forecastCanola Ending Stocks Prices to remain firm. Low ending stocks Significant risk in Europe/Black Sea

33. 33 Filling the bucket

34. 34 There’s only so much land....

35. 35 The answer isn’t more deforestation...

36. 36 Meat Consumption in China X marks the spot X

37. 37 Volatility Higher Prices Crisis Point

38. 38 Thank you for your time

39. 39 Contact Details Dean Smith Senior Grains Analyst, Food & Agribusiness Research and Advisory t. 02 8115 2368 e. Dean.Smith@rabobank.comDean.Smith@rabobank.com DISCLAIMER Professional advice is recommended for all financial and strategic decisions. However, this information is not professional advice and has not been prepared to be used as the basis for, and should not be used as the basis for, any such decisions. This information is general in nature only and does not take into account an individual’s personal circumstances. No representation is made that any forecast or projected information is correct or will eventuate. Although reasonable efforts have been taken to ensure the accuracy of the contents of this publication, no warranty is given in regard to the total accuracy of the printed contents. The persons involved in the preparation and distribution of this information and their related persons disclaim all liability for any loss or damage suffered due to any use of or reliance on the information