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CCC Vancouver March 21, 2007 Chart 1
FSU Oilseeds - Raising the Curtain
Thorsten TiedemannToepfer International, Hamburg
Vancouver,
March 21, 2007 CANOLA –
Growing Great 2015!
CCC Vancouver March 21, 2007 Chart 2
Hamburg
LondonWarsaw
Paris
Madrid
Basle
RotterdamAntwerp
Bucharest
Winnipeg
New Orleans
Minneapolis
Tampa
Athens
RostovKiev
AmmanCairo
Mumbai
Tehran
Manila
Jakarta
Adelaide
Singapore
DalianBeijing
Shanghai
Taipei
Ho Chi Minh City
Bangkok
Sao Paulo
Rosario
Buenos Aires
Budapest
Odessa
Dublin
Montevideo
Sofia
ACTI‘s Office Locations40 offices900 employeesTurnover 40 mln t
CCC Vancouver March 21, 2007 Chart 3
Russia Ukraine Kazakhstan Canada
Population 142.9 46.7 15.2 33.1
GDP per capita in PPP $12,100 $7,600 $9,100 $35,200
Area in mln sq km 17.08 0.60 2.72 9.98
Arable Land in mln ha 122.4 32.5 22.5 45.6
Arable Land in % 7.2% 53.8% 8.3% 4.6%
CCC Vancouver March 21, 2007 Chart 4
The Appearance of the FSU-12 on the World Grain MarketExport Surplus due to a Drop in Grain Use
-36 -35-26
-35-24
-9-1 -2 -2
2 4
-1
115
28
517 22 20
-50
0
50
100
150
200
250
1988
/89
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
in m
ln t
Net Trade
Production
Domestic UseExports
ImportsSource: USDA
CCC Vancouver March 21, 2007 Chart 5
9 10 11 10 10 13 13 14 15
10090
74 79 80 7278 77 76
109
100
8688 90
8591 91 92
0
20
40
60
80
100
120
1990/91 1995/96 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
in m
ln h
a
Oilseeds Grains & Pulses Total
FSU-12: Grain and Oilseed Acreage Development since 1990 in mln ha
Source: USDA
CCC Vancouver March 21, 2007 Chart 6
0.4 0.2 0.4 0.4 0.2 0.3 0.6 0.71.2
0.80.5 0.4 0.4 0.5 0.6
0.91.3
1.8
6.5
4.4
7.7
5.3
7.5
9.8 8.5
11.7
12.67.8
5.0
8.5
6.1
8.3
10.710.0
13.8
15.6
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
1990/91 1994/95 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
in 1
,00
0 t
Sunflower seed
Soybeans
Rapeseed
FSU-12: Oilseed Production by Type of Oilseed
Source: USDA
CCC Vancouver March 21, 2007 Chart 7
Russian Federation
22%
Ukraine17%
Kazakhstan, Republic of
1%
Moldova, Republic of
1%
Bulgaria4%Romania
5%
EU-2513%
India5%
China, Peoples Republic of
6%
Others13%
Argentina13%
World Sunflower Production
World Production:
30.6 mln t in 2006
Source: USDA
Almost 50% produced in the Black Sea Region
CCC Vancouver March 21, 2007 Chart 8
Russia: Sunflower S&D in mln t
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Area in mln ha 3.4 3.8 4.9 4.7 5.4 5.8
Yield in t/ha 0.78 0.97 1.00 1.03 1.19 1.16
Production 2.7 3.7 4.9 4.8 6.5 6.7
Total Supply 2.7 3.7 4.9 5.1 6.7 7.0
Exports 0.0 0.2 0.3 0.1 0.4 0.4
Crush 2.5 3.3 3.9 4.4 5.6 5.8
Total Use 2.7 3.5 4.3 4.8 6.0 6.3
Source: USDA
CCC Vancouver March 21, 2007 Chart 9
Russia: Exports of Sunflower Seed and Oil Source: USDA
0.0
0.2
0.3
0.1
0.40.4
0.0
0.1
0.1
0.2
0.6 0.6
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
in m
ln t
Sunflower seed exports
Sunflower oil exports
CCC Vancouver March 21, 2007 Chart 10
Ukraine: Sunflower S&D in mln t
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Area in mln ha 2.4 2.7 3.8 3.4 3.7 3.9
Yield in t/ha 0.94 1.20 1.12 0.90 1.27 1.36
Production 2.3 3.3 4.3 3.1 4.7 5.3
Total Supply 2.3 3.3 4.3 3.2 4.8 5.3
Exports 0.1 0.3 0.9 0.0 0.2 0.3
Crush 2.1 2.8 3.2 3.0 4.6 4.9
Total Use 2.2 2.9 3.2 3.0 4.6 4.9
Source: USDA
CCC Vancouver March 21, 2007 Chart 11
Ukraine: Exports of Sunflower Seed and Oil
0.1
0.3
0.9
0.0
0.2 0.30.3
0.91.0
0.6
1.5 1.5
0.0
0.5
1.0
1.5
2.0
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
in m
ln t
Sunflower seed exports
Sunflower oil exports
Source: USDA
CCC Vancouver March 21, 2007 Chart 12
Russia & Ukraine: Projection of Sunflower Production & Trade
• Sunflower acreage reached its peak (crop rotation)• Higher acreage possible in years with grain winter kill etc.• Yield increase due to better varieties (hybrids, high oleic) & farming practices• Crush capacity sufficient to crush the local crop• Seed exports only in very good crop years• Domestic use to increase slightly, exports to increase slightly as well
0.230.62 0.61 0.59 0.65 0.67 0.68
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
in m
ln t
Sunflower Oil Exports
Production
Crush
0.6
1.5 1.5 1.5 1.5 1.6 1.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
in m
ln t
Sunflower Oil Exports
Production
Crush
Projection Russia Projection Ukraine
Source: Toepfer & USDA
CCC Vancouver March 21, 2007 Chart 13
Russia & Ukraine: Trends in Rapeseed Production
192276 303
578
781
1,024
1,254
1,485
0.97
1.10
1.24
1.10
1.241.28
1.32 1.35
0
400
800
1,200
1,600
2,000
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
in 1
,00
0 t
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Production
Yield in t/ha
284
654
1,736
1,980
2,313
2,660
51149
0.94
1.17
1.43
1.61
1.75 1.80 1.85 1.90
0
500
1,000
1,500
2,000
2,500
3,000
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
in 1
,00
0 t
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Production
Yield in t/ha
• New 00 winter-varieties available
• Royalty problem solved with hybrid seed
• Huge difference between well and poorly managed farms
– Poorly managed: < 1 t/ha– Well managed: > 4 t/ha in Ukraine
• Well managed farms have invested in:– Soil preparation & seeding technology– “Western-style” crop protection– Harvest technology
• Production Development in Russia – Based on export tax of 20 %– Profitability of competing grain– To triple by 2010
• Production development in Ukraine – No export tax so far– Logistics– Production to quadruple by 2010
Russia
Ukraine
Source: Toepfer & USDA
CCC Vancouver March 21, 2007 Chart 14
Russia: Rapeseed S&D in 1,000 t 2004/05 2005/06 2006/07 2007/08 2010/11
Acreage in 1,000 ha 250 244 525 630 1,100
Yield in t/ha 1.10 1.24 1.10 1.24 1.35
Production 276 303 578 781 1,485
Total Supply 292 313 599 802 1,520
Exports 48 54 265 302 170
Crush 219 225 250 450 1,300
• Local rapeseed crush subsidised by differentiated export tax• Crush to increase, exports of rapeseed oil or RME• Exports should be very volatile depending on the crop year
and crushing capacity• Exports of rapeseed difficult to predict, but on average low
Source: Toepfer & USDA
CCC Vancouver March 21, 2007 Chart 15
Ukraine: Rapeseed Acreage by Oblast
Rapeseed production concentrated in central oblasts
Source: Toepfer
Acreage in 1,000 ha
CCC Vancouver March 21, 2007 Chart 16
Ukraine: Rapeseed S&D in 1,000 t 2004/05 2005/06 2006/07 2007/08 2010/11
Acreage in 1,000 ha 106 202 405 992 1,400
Yield in t/ha 1.17 1.43 1.61 1.75 1.90
Production 149 284 654 1,736 2,660
Total Supply 152 287 655 1,756 2,680
Exports 80 188 510 1,416 2,020
Crush 63 90 135 280 600• Estimate based on the assumption that export tax is not going to be implemented
• However, export tax possible, which should lead to sign. lower exports
• Trend for further increase in production
• Crushing industry should increase slightly
• Biodiesel industry hardly viable without subsidies
• Exports of rapeseed to increase in this scenario
Source: Toepfer & USDA
CCC Vancouver March 21, 2007 Chart 17
Ukraine, the new Competitor on the World Rapeseed Market in 2007/08
(Exports in 1,000 t, Estimates for 2006/07 and 2007/08)
Source: Toepfer
March 14, 2007
Importers 20
07
/08
20
06
/07
20
07
/08
20
06
/07
20
07
/08
20
06
/07
20
07
/08
20
06
/07
20
07
/08
20
06
/07
20
07
/08
20
06
/07
EU 4 4 100 320 10 75 114 544
Bangladesh 60 75 15 15 40 115 90
China 900 650 160 1,060 650
Japan 1,800 2,000 400 200 50 2,250 2,200
Pakistan 100 600 100 50 500 50 750 650
Turkey 0 50 100 16 150 115 250 181
UAE 50 200 50 150 250 200
Mexico 1,000 1,200 100 250 1,350 1,200
USA 1,300 785 1,300 785
not specified 130 130 50 25 50 36 50 40 20 40 300 281
total 5,344 5,694 615 240 350 67 1400 540 30 115 7,739 6,811
Russia TotalCanada Australia EU-27 Ukraine
CCC Vancouver March 21, 2007 Chart 18
Russia: Trends in Soybean Production (in mln t)
• Soybean production in Siberia and Southern Russia to increase• Russian soybean trade negligible, also in the next years• Soybean crush to increase due to strong demand increase for soybean
meal (livestock sector well protected from world market and very profitable, especially poultry production)
Summary: Soybean production to increase but little linkage to world markets
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Production 350 423 393 555 689 900
Import 64 15 1 40 2 2
Export 0 1 1 9 3 5
Crush 410 450 380 546 675 880
Source: Toepfer & USDA
CCC Vancouver March 21, 2007 Chart 19
Ukraine: Trends in Soybean Production (in mln t)
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
Production 74 125 232 363 610 890
Import 13 1 0 0 2 0
Export 1 7 61 36 224 325
Crush 80 100 151 280 340 500
• Soybean production to increase in central and south-eastern Ukraine• Crush is also expected to increase, but local demand for Soybean meal
restricted so far• Therefore, increasing export potential for soybeans
Summary: Soybean production to increase, should be used partly domestically but increasing export potential
Source: Toepfer & USDA
CCC Vancouver March 21, 2007 Chart 20
Conclusion I1. Oilseed production has gained momentum in Russia and
Ukraine:• Favourable prices compared to grain• Improved production technologies and varieties • Improved logistics
2. Future development of oilseed production based on:• Price development on the oilseed and grain market (fight for acreage)• Further improvements in logistics • Structural change in the farming sector –
management is the scarce factor in the FSU-12 agriculture, not capital
3. Export potential depends on:• Trade policies, especially the export taxes • Biofuel policies in these countries• Investment climate, i.e. how attractive it is for foreign investors to built
crushing plants in Russia and Ukraine
CCC Vancouver March 21, 2007 Chart 21
Conclusion II4. Impact on the Canadian Canola Industry:• Russia, but especially Ukraine new important
factor in World Rapeseed trade• However, production potential of all countries
urgently needed to meet the world’s ever increasing demand
• Interdependency of grain and oilseed markets• Markets will tell what to grow every year• Canadian farmers in excellent position to react in
spring on the potential competition from the Black Sea region and other exporters
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