2. U.S. WHEAT the world’s reliable choice CHINA – MARKET BRIEFING U.S. Wheat Associates CHINA FEBRUARY 2008

3. China – Population: 1.3 billion

4. China Economy: Fastest Growing Major Economy ( 2007 growth 11.5% - 11.9%) (Billion US$) Source: China National Statistics Bureau Exchange rate @7.6 (2007), growth rate 2008-2010 @8.5%, 2011-2020 @7%

5. High Per Capita GDP Growth (Unit: US$) Source: China National Statistics Bureau Exchange rate @7.6 (2007), growth rate 2008-2010 @8.5%, 2011-2020 @7%

6. China – Wheat area: PRC 23.5 MHa / USA 23.4 MHa

7. Dalian Xiamen Shenzhen Zhanjiang Lianyungang Huangpu Fangcheng Qinhaungdao Xingang Nantong Zhangjiagang Shanghai Ningbo China - 15 MAJOR PORTS 15 MAJOR PORTS Yantiai Qingdao

8. China Wheat Situation

9. China accounted for 49% of world stocks in 1999/2000, down to 29% Chinese vs. Rest of the World Ending Stocks

10. China’s Soybean Supply / Demand

11. China’s Rice Supply / Demand

12. China’s Corn Supply / Demand

13. China – Wheat Area and Production 23.0 107 4.6

14. China Wheat Production - Major Producer Provinces (Unit: MMT) Source: China National Grain & Oil Information Center (CNGOIC) * Estimate

15. China Wheat Yield - By Major Province (Unit: MT/Ha) Source: China National Grain & Oil Information Center (CNGOIC) * Estimate

16. China Daily Grain Market Price : Source: China National Grain & Oils Information Center Exchange rate @8.0 since Sep 2004, @7.86 since Nov 2006, @7.55 since Jul 2007 @7.5 since Aug 2007, @7.15 since Jan 2008

17. U.S. FOB PNW Prices

18. SRW and Soft White Prices

19. Ocean Freight Rates for Grains

20. U.S. WHEAT the world’s reliable choice China Wheat Imports - Calendar Year – by Country (Unit: MMT) Source: China Customs Statistics

21. U.S. WHEAT the world’s reliable choice China Flour Imports - Calendar Year – by Country (Unit: TMT) Source: China Customs Statistics

22. China’s US Imports Purchases and actual imports: Containerized and bulk vessel shipments *(July – June) HRW – 0.5 SW/WW-5.8 NS/DNS-3.3 SRW – 57.3 SW/WW-178 NS/DNS-188 SRW – 66 376 152 HRW – 0.3 SW/WW-10.5 NS/DNS-0.7 SRW – 0 516 725

23. U.S. WHEAT the world’s reliable choice China Wheat Exports - Calendar Year – by Country (Unit: MMT) Source: China Customs Statistics

24. U.S. WHEAT the world’s reliable choice China Wheat Exports - *Crop Year – by Country (Unit: MMT) Source: China Customs Statistics *Crop Year from June to next May

25. U.S. WHEAT the world’s reliable choice China Flour Exports - Calendar Year – by Country (Unit: 10 TMT) Source: China Customs Statistics

26. U.S. WHEAT the world’s reliable choice China Flour Exports - * Marketing Year – by Country (Unit: 10 TMT) Source: China Customs Statistics *Marketing Year from July to next June

27. China’s flour consumption estimates – 70 MMT

28. Market Quality Segments High Medium Low Medium Low Market Pressure CurrentFuture High

29. QSR Expansion (Quick Service Retail) Western-Style Fast Food Source: China Food Industry Association and internet Quick Service Retail Chains (QSR) # of outlets May 2004 # of outlets January 2005 # of outlets June 2007 Growth % 07 vs 05 KFC1,0001,4001,800+28.5% McDonald’s56066381514.6% Pizza Hut130150200+33.3% Dico’s30040054- 640.7%

30. HRW & HWW Use – China ( HWW - 12.5 or higher protein ) Western Pan Bread (only pan loaf tested in OVA) Sweet Breads European Hearth Breads Dumpling (Jiao Zi) Wrappers Premium Grade Chilled and Fresh Noodles

31. Policies Affecting Wheat Domestic & int’l price differential TRQ Value added tax - VAT Milling wheat and flour exports VAT, TRQ Flour exports to other Asian markets Animal & plant quarantine rules Dockage and non-wheat seeds TCK and KB fungus Insects MRL’s for pesticides Food labeling requirements

32. US Wheat Activities Trade servicing and information Weekly price report Crop and harvest progress reports Supply & demand reports Industry & Government relations Publications Chinese or dual language Sino – America Baking School Instructor training (USA, Europe, Asia) Baking technical servicing Milling technical servicing Wheat procurement training Overseas Varietal Analysis Asian products collaborative

33. U.S. WHEAT the world’s reliable choice Questions / Answers