1. Castor Developments in Asia ICOA General Meeting San Diego, 18 th May 2006 A.K. Mitra – Hindustan Lever Ltd.

2. Asia in Castor Dominant producer oIndia + China produces 450,000 T Oil out of 500,000 T global total (90%) Largest consumer oConsumes 250,000 T Oil equivalent to 50% of global total Meets world demand of Castor oil and derivatives oExports 200,000 T, fully covering Europe + North America needs India produces close to 400,000 T oil and exports 300,000 T as Oil + Derivatives

3. Asia in Castor Rapid economic growth oChina and India growing at fast rate (8% to 10% GDP growth) oManufacturing growth at even higher rate oInternal consumption for Castor products will match this growth Reviewing exports portfolio oStress on value-added products Castor yields/production oIndia has overall average yield >1000 Kg/ha, poised to grow oArea under cultivation to compete with other crops based on expected returns oCommodity exchanges rapidly developing and disseminating relevant information oChina yields/areas stagnant to falling

4. India and Castor India “ideal” for Castor oHigher yield than elsewhere, still growing (capable R&D) oLower labour cost oFavourable agro-climatic condition oAdequate area available for Castor cultivation Developing fast oEmerging as manufacturing hub for a host of goods oAbundance of entrepreneurial and technical capabilities oFocusing on value addition and export of finished goods Impact on Castor oInternal consumption on the rise – stronger sustenance for inputs oAdded thrust on Derivatives export oInternational oil demand to compete with domestic

5. Castor Seed Prodn. - Asia In ‘000 MT20062005 India900820 China125100 Others10 1035930 10% higher crop : adequate to meet world demand pursuant to 4.5% GDP growth

6. Oil balance 2005 - Asia In ‘000 MTConsumptionAvailabilitySurplus/ (Deficit) India100400300 China10055(45) Others555(50) Total255460205 Adequate to meet demand from rest of the world

7. Deriv. balance 2005 - Asia In ‘000 MTConsumptionAvailabilitySurplus/ (Deficit) India156550 China255530 Others4030(10) Total8015070 Adequate to meet demand from rest of the world

8. Prices have fallen monotonically from SQ ’04 to DQ ’05; five quarters in a row Total fall of > Rs 10,500/T equivalent to 26% Good crop in ’05 and ’06; discounted in prices Target plus scheme; had impacted prices by upto $35/T (~5%) Fsg fob Kandla (Rs/T)

9. Recent developments Target plus scheme abolished Forecast of insufficient monsoon Firming up of prices o~2% up in MQ ’06 after 5 qtr fall oJune futures @ 2% prem. (eff. 4.5%) oAug futures @ 10% prem. (eff. 3.3%)

10. Volatility Range as % of Average MQJQSQDQ 200318202716 200413162317 200588157 20069 Qtrly fluctuation significantly down from 2005 SQ phenomenon interesting; even this has come down significantly For a commodity, 8% to 15% levels is remarkably low

11. Volatility Possible reasons for reduced volatility since 2005 SEA crop survey in 2005 and 2006 Wide dissemination of survey results “information” & “transparency” eliminate major seeds of “speculation” Reduction in horizon/extent of buying forward Can ICOA help promote these further? Participation in crop survey Fine tune demand forecast and disseminate widely

12. Summary Asia (India) well placed to serve Castor world; both quantity and price wise Expect growth in value-added castor derivatives export with focus on manufacturing After softening over 5 quarters, Castor prices firming up Supply side measures significantly reduce volatility; a positive trend, to be nurtured ICOA role in promoting information dissemination to further “choke” speculation

13. Global Oil & Derivative Balance 2006 : a draft working Overall as OilDerivatives (in ‘000T)Avail.Cons.Bal.Avail.Cons.Bal. India400100300651253 China55100(45)552530 Japan 30(30)1727(10) Mid East 10(10) 5(5) APAC excl Japan515(10)15105 Total Asia4602552051527973 Brazil + South Am4330133015 Europe 140(140)1070(60) USA, North Am 70(70)1035(25) Other non Asia532 3(3) Total non Asia48243(195)50123(73) Total50849810202 0

14. Thank You