EthanolEthanol Trading Flow in East and SouthTrading Flow in East and South--East AsiaEast Asia

May 12, 2010, Nara, Japan

Shigeru TakemuraGinga Petroleum (S) Pte Ltd

www.ginga.com.sg

Fuel Ethanol Production in 2009

55%34%

5% 4% 2%

USABrazilEUAsiaRoW

73 billion liter

Ethanol Usage: World VS East & SE Asia

World East and SE Asia

Fuel 76% Industrial & Beverage 70%

Estimated Trade Flow: 2007 (1,000 cbm)Estimated Trade Flow: 2007 (1,000 cbm)

35003500

12001200

680680

10001000

290290

EU

ChinaJapan/Korea

Pakistan

US

Brazil

130130

170170

Africa

Estimated Trade Flow: 2008 (1,000 cbm)Estimated Trade Flow: 2008 (1,000 cbm)

52005200

22702270

700700

16001600

350350

EU

China Japan/Korea

Pakistan

US

Brazil

140

130130

Africa

•Brazil’s export volume increased 67% from 2007•EU and US’s imports increased 60% and 90% respectively due to Higher feedstock (corn and wheat ) prices.

Estimated Trade Flow: 2009 (1,000 cbm)Estimated Trade Flow: 2009 (1,000 cbm)

30003000

700700

800800

12001200

155155

EU

China Japan/Korea

Pakistan

US

Brazil

184

Philippines

400

India135135

110

Africa

Other commodities to watch

$400

$500

$600

$700

$800

$900

$1,000

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

1.51.61.71.81.922.12.22.32.42.5

FOB Brazil offer

BRL = X

$300

$400

$500

$600

$700

$800

$900

$1,000

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

$200

$250

$300

$350

$400

$450

$500

$550

$600

FOB Brazil offer

Sugar #11

$300

$400

$500

$600

$700

$800

$900

$1,000

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

$20

$40

$60

$80

$100

$120

$140

$160

FOB Brazil offer

WTI Crude

Correlations

FOB Brazil : Brazilian Real = -0.66 FOB Brazil : Sugar #11 = 0.56FOB Brazil : WTI Crude = 0.49

Ethanol Trade Flow in E&SE Asia 2007 (1,000cbm)

59

130

71

475

154

17

Philippines

JapanKoreaChina

Thailand

Singapore34

Indonesia

•Over 95% of the volume traded to/within Asia is non-fuel grades

•Over 60% of the volume is from Brazil

83K cbm from Pakistan

Ethanol Trade Flow in East &SE Asia 2008 (1,000cbm)

110

146

81

456275

67

Philippines

JapanKoreaChina

Thailand

Singapore46

Indonesia

145K cbm from Pakistan

To Europe

To Middle East

Ethanol Trade Flow in East & SE Asia 2009 (1,000cbm)

32

107

72

540

165

115

Philippines

JapanKoreaChina

Thailand

Singapore 46Indonesia

80K cbm? from Pakistan

Thai FOB Prices VS CFR East Asia and FOB Brazil

$400

$500

$600

$700

$800

$900

$1,000Ja

n-08

Mar

-08

May

-08

Jul-

08

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-

09

Sep

-09

Nov

-09

FOB Thai

CFR E Asia

FOB Brazil

Fuel ethanol production VS consumption in Thailand

5

10

15

20

25

30

35

40

45

Jan-

06

May

-06

Sep

-06

Jan-

07

May

-07

Sep

-07

Jan-

08

May

-08

Sep

-08

Jan-

09

May

-09

Sep

-09

Tho

usan

ds c

bm

Fuel EthanolConsumptionFuel EthanolProduction

Thai estimated production cost VS CFR East Asia Offers

$400

$500

$600

$700

$800

$900

$1,000

Jan-

08

Mar

-08

May

-08

Jul-

08

Sep

-08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-

09

Sep

-09

Nov

-09

Estimated ProductionCost

CFR East Asia offer

Thai Molasses based fuel ethanol = Molasses price * 5 + $85 (Operational Cost)

Alternative feedstock in Thailand

Thailand Tapioca Export

0

1

2

3

4

5

2006 2007 2008 2009

Mill

ions

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2006 2007 2008 2009 2010

TapiocaBothCane-juice or Molasses based

Thailand Tapioca Production

21

22

23

24

25

26

27

28

29

2006 2007 2008 2009

Mill

ions

Thailand gas consumption (metric ton per day)

02

468

101214

1618

J-98 J-99 J-00 J-01 J-02 J-03 J-04 J-05 J-06

Thousa

nds

Estimated Ethanol Balance in Philippines

n Philippines started 5% ethanol mandate from Feb 2009

n Percentage of mandate will be increased to 10% from Feb 2011

n Production capacity will reach 640,500 cbm/yr when all the planed ethanol plants are operational

n Philippines might shift to exporter in the future

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014

Import

Production

ChinaChina Crude Oil Import (1,000 bbl per day)

0500

1000150020002500300035004000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

0

2

4

68

10

12

14

Millions

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Projected Fuel Ethanol Production Capacity (cbm per year)

Carbon Emisson from Consumption of Energy (1,000mt/yr)

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

China launched ethanol program in 2002 for:

•Country’s energy security•Pollution reduction•Increasing farmers’ income

Targets to produce 2million tons by 2010 and 10 million tons by 2020

China

However:

n Not enough volume of feedstock available to produce ethanol

n Not enough arable land available to cultivate feedstock

Thank youThank you