Louis Dreyfus Canada Ltd.
World Grain Flows – The Evolution of Competition
02
December 3, 2010
World Dry Bulk
03
December 3, 2010
Combined Lake & St. Lawrence Exports – U.S. & Canada
>Total traffic has decreased from a high of 15.2 million tons in 1994/95 to 9.5 million tons in 2008/09
04
December 3, 2010
World Grain Flows – the Evolution of Competition
> Global Oilseeds Market> Soybean and Canola
l Production & Consumption
l Importers & Exporters
l Meeting Chinese Demand
– Canada’s Rank
> Global Grain Market>Wheat
l Shifting Global Market
– Former Soviet Union
>Corn> Canada
> Seeded Acreage and Production> Exports
l Global Comparisons
> Conclusion
05
December 3, 2010
Soybean and CanolaProduction and Consumption
>Led by soybeans, oilseed consumption has increased to over 300 million tons>Increase of 140% since 1990
0
50
100
150
200
250
300
350
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
2010
/2011
Mill
ion
Tons
Oilseed Production Oilseed Consumption
06
December 3, 2010
World Soybeans Production
>World production of soybeans has increased nearly 150% in the last 20 years
>Growth led by the U.S., Argentina, and Brazil
0102030405060708090
100
1990
/1991
1992
/1993
1994
/1995
1996
/1997
1998
/1999
2000
/2001
2002
/2003
2004
/2005
2006
/2007
2008
/2009
2010
/2011
Mill
ion
Tons Argentina
BrazilCanadaChinaUnited States
07
December 3, 2010
China in the News
08
December 3, 2010
World SoybeansConsumption
>China is now the leading consumer of soybeans (≈25% of world)
>Growing livestock and poultry sectors contribute to consumption increases
0
50
100
150
200
250
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
2010
/2011
Mill
ion
Tons
United States
EU-15/27
China
Brazil
Argentina
09
December 3, 2010
World SoybeansConsumption as a Percent of Production
>China currently consumes over four times more than they produce
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
2010
/2011
ArgentinaBrazilChinaCanadaUnited States
010
December 3, 2010
World SoybeansLeading Importers
>China is the world’s largest importer of soybeans>Responsible for over 55%
of world imports
0
10
20
30
40
50
60
70
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
Mill
ion
Tons Japan
EU-15/27
China
011
December 3, 2010
Chinese Domestic ConsumptionOutlook
肉,奶制品和家禽产量的“非弹性需求增长” 将从2009年的148亿吨增长到2020年的超过250万公吨。
Liu Xiaoyu, general manager Cofco feed division, China’s largest grain trader
012
December 3, 2010
Chinese Domestic ConsumptionOutlook
>China may double its output of industrial animal feed
>Output will be more than 250 million metric tons by 2020, growing from 148 million tons last year, on “inelastic demand growth” for meat dairy and poultry
Liu Xiaoyu, general manager Cofco feed division, China’s largest grain trader
From bloomberg.com: October 6, 2011
013
December 3, 2010
World SoybeansLeading Exporters
>Argentina, Brazil, and the U.S. make up about 90% of world soybean exports
0
510
1520
2530
3540
45
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
Mill
ion
Tons
Argentina Brazil United States
014
December 3, 2010
Canadian Soybean Exports
>Canadian soybean exports have continued to rise>Exports in 2010 make up around 60% of production
0
500
1,000
1,500
2,000
2,500
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
Thou
sand
Ton
s
015
December 3, 2010
Canadian SoybeansExport Destinations
>Canadian soybean destinations have remained fairly consistent>Until 2008/09, have not had significant exports to China
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
Tons
to Netherlandsto Chinato Japanto United States
016
December 3, 2010
Soybean Exports to China
>Canada has not overwhelmingly increased its percentage of exports to China>2008/09 – Brazil and the US sent over 50% of their exports to China>2008/09 – Argentina sent roughly 90% of their exports to China
•2008/2009 crop year –Canada made up only .6% of all Chinese Imports
017
December 3, 2010
> Soybean consumption has increased dramatically>Led by China
>US, Argentina, and Brazil have answered with increased production
>Canada has maintained modest yet steady production growth>Consistently increasing exports
Steady export destinations
018
December 3, 2010
World Wheat MarketProduction and Consumption
0
100
200
300
400
500
600
700
800
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
2010
/2011
Mill
ion
Tons
Production Consumption
019
December 3, 2010
World Wheat Russia, Kazakhstan, Ukraine Production
>Wheat Production in the Former Soviet Union has been increasing since 1995>Drought in the 2010/2011 crop year has limited production
Russia, Kazakhstan, Ukraine Production
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
Thou
sand
Ton
s
020
December 3, 2010
World WheatRussia, Kazakhstan, Ukraine Exports
>Russian wheat exports have increased from 1.2mmt in 1990 to 18.6mmt in 2010
>Ukraine wheat exports have increased from 2mmt in 1990 to 9.3mmt in 2010
Russia, Kazakhstan, Ukraine Exports
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
Thou
sand
Ton
s
021
December 3, 2010
Percentage of World Wheat Exports
>2000/01 – Former Soviet Union accounted for 5% of world wheat exports>2009/10 – FSU accounted for 28% of world wheat exports
5% 13%
24%
7%14% 18% 20% 19%
26% 28%13%
46% 41%
31%
44%40% 37%
40% 44%33% 33%
42%
0%
20%
40%
60%
80%
100%
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
2010
/2011
OtherAustraliaNorth AmericaFormer Soviet UnionEuropean Union
022
December 3, 2010
Wheat ExportsChanges 1991-2010
023
December 3, 2010
Wheat ConsumptionChanges 1991-2011
024
December 3, 2010
Corn Production and Consumption
>Corn consumption has increased to over 800 million tons
0
100
200
300
400
500
600
700
800
900
1990
/1991
1991
/1992
1992
/1993
1993
/1994
1994
/1995
1995
/1996
1996
/1997
1997
/1998
1998
/1999
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
2004
/2005
2005
/2006
2006
/2007
2007
/2008
2008
/2009
2009
/2010
2010
/2011
Mill
ion
Tons
ProductionConsumpion
025
December 3, 2010
Corn Exports
>1990/91 – 58.4 million tons exports
>US – 44 million >S. America – 4 million>FSU – 800 thousand >Canada – 140 thousand
>2010/11 – 93.4 million tons exports
>US – 51.4 million >S. America – 26 million>FSU – 5.6 million>Canada – 300 thousand
026
December 3, 2010
Grains Summary
>Gradual increase in wheat consumption
>Consumption shift>Significant increases in Asia, EU, and Africa
>Emerging exporters>FSU has become new low cost exporter>Until FSU drought 2010/11, smaller North American market share
>Corn>Increased demand>More FSU and S. America exports
027
December 3, 2010
Canadian Land Usage
>Even with increases in global food consumption, Canadian cultivated area has declined below 100 million acres
>Wheat, Barley, Oats, Corn, Peas, Canola, and Soybeans account for roughly 60 million acres
Total Seeded Area
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
110.0
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
Mill
ion
Acre
s
Major Crops Minor Crops Summerfallow
028
December 3, 2010
Canadian Seeded Acreage
0%
20%
40%
60%
80%
100%
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
Perc
enta
ge B
reak
dow
n
Wheat Ex-Durum Oats Barley Canola
>Acres have strayed away from wheat and towards canola
029
December 3, 2010
Canadian Production Trends
0%
20%
40%
60%
80%
100%
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
Perc
enta
ge B
reak
dow
n
Wheat Ex-Durum Durum Barley Canola Soybeans
030
December 3, 2010
Wheat Freight, Elevation, & Stevedoring
031
December 3, 2010
Canadian Export Market
>Changes since 1990>Vancouver: +2.5 million (21% increase)>Prince Rupert: +11 thousand (unchanged)>St. Lawrence: -3.05 million (26% decrease)
Canadian Exports by Port
0
5
10
15
20
25
30
35
40
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
2007
-08
2008
-09
Mill
ion
Tons St. Lawrence
VancouverPrince Rupert
032
December 3, 2010
Canadian ExportsChanges by Destination
033
December 3, 2010
Canadian Export Market
>Overall Canadian Lakes & St. Lawrence Exports have declined to just over 8 million tons>Oilseed exports now make up close to 2 million tons
Lakes and St. Lawrence Exports
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1990
-9119
91-92
1992
-9319
93-94
1994
-9519
95-96
1996
-9719
97-98
1998
-9919
99-00
2000
-0120
01-02
2002
-0320
03-04
2004
-0520
05-06
2006
-0720
07-08
2008
-09
Thou
sand
Ton
s
GrainsOilseeds
034
December 3, 2010
US Export Market
Lake Exports
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
Thou
sand
Ton
s
SoybeansCornWheat
035
December 3, 2010
Combined Lake & St. Lawrence Exports – U.S. & Canada
>Total traffic has decreased from a high of 15.2 million tons in 1994/95 to 9.5 million tons in 2008/09
036
December 3, 2010
US Export Market
Pacific Exports
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
Thou
sand
Ton
s
SoybeansCornWheat
>Expecting 2010/11 Pacific Exports of 33.5 million, near high of 2007/08!!
037
December 3, 2010
US Export Market
Exports to Mexico and Canada (Interior)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
Thou
sand
Ton
s
SoybeansCornWheat
>Expected 2010/11 exports are projected near 11.2 million
038
December 3, 2010
US Export Market
>Expecting 2010/11 Gulf Exports of 82 million!!
Gulf Exports
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
Thou
sand
Ton
s
SoybeansCornWheat
039
December 3, 2010
US Exports
040
December 3, 2010
>Shift in Canadian seeded acreage away from grains and towards oilseeds>Increased Canola production
>Exports met through Pacific>Fewer exports out of St. Lawrence
More oilseed exports
>Strong US Export Growth>Decrease in Eastern Port Traffic
041
December 3, 2010
Conclusion
>Shifting domestic consumption being met by new export markets>Increasing Asian and African consumption>Increasing South American and FSU exports
>New Canadian agricultural objectives>Gradual transition towards oilseeds& increasing domestic demand
>Thriving Pacific export market>More exports to Asian markets led by expanding Chinese demand>Increase in soybean traffic
>Stagnant Eastern and Great Lakes exports>Constrained US capacity from US Gulf and Pacific Northwest>St. Lawrence Seaway acts as residual supplier of capacity
Louis Dreyfus Canada Ltd.World Dry BulkCombined Lake & St. Lawrence Exports – U.S. & CanadaWorld Grain Flows – the Evolution of CompetitionSoybean and Canola�Production and ConsumptionWorld Soybeans �ProductionChina in the NewsWorld Soybeans�ConsumptionWorld Soybeans�Consumption as a Percent of ProductionWorld Soybeans�Leading ImportersChinese Domestic Consumption�OutlookChinese Domestic Consumption�OutlookWorld Soybeans�Leading ExportersCanadian Soybean ExportsCanadian Soybeans�Export DestinationsSoybean Exports to China� Slide Number 17World Wheat Market�Production and ConsumptionWorld Wheat �Russia, Kazakhstan, Ukraine ProductionWorld Wheat�Russia, Kazakhstan, Ukraine ExportsPercentage of World Wheat ExportsWheat Exports�Changes 1991-2010Wheat Consumption�Changes 1991-2011Corn �Production and ConsumptionCorn ExportsGrains SummaryCanadian Land UsageCanadian Seeded AcreageCanadian Production Trends Wheat Freight, Elevation, & StevedoringCanadian Export MarketCanadian Exports�Changes by DestinationCanadian Export MarketUS Export MarketCombined Lake & St. Lawrence Exports – U.S. & CanadaUS Export MarketUS Export MarketUS Export MarketUS ExportsSlide Number 40Conclusion