World Juice 09Ni O t b 5 8 2009

Christian LohbauerCitrusBR President

Nice, October 5-8, 2009

Program

• The Association - Founding Members- Main objectives

• Export destinations and Performance of the Brazilian Orange Juice

• Land: sugar cane and impact on production

• Brazilian Citriculture Challenges and Trends

The AssociationThe Association

Founded last June by four members whose production ofj i d 95% f h B iliorange juice corresponds to 95% of the Brazilian

production and 98% of the Brazilian OJ exports

Our Main ObjectivesOur Main Objectives• Defend collective claims of Brazilian citrus exporters nationally

and internationally

C b b d• Combat barriers to trade

• Encourage orange juice consumption

• Promote the sectors’ image

• Support technical studies to find solutions for sector-related problemsproblems

• Defend institutional interests

• Provide stakeholders with clear, reliable and updated information

• Interact with other agribusiness entities

Export Destinations Brazilian Orange Juice

Source: Secex 2008

Source: DecexSource: Decex

Source: Decex

Brazilian Exports – Orange Juice FCOJ equivalent

1,600,000

t)q

800 000

1,000,000

1,200,000

1,400,000

tal e

xpor

ted

(t

200 000

400,000

600,000

800,000Tot

0

200,000

89/9

0

90/9

1

91/9

2

92/9

3

93/9

4

94/9

5

95/9

6

96/9

7

97/9

8

98/9

9

99/0

0

00/0

1

01/0

2

02/0

3

03/0

4

04/0

5

05/0

6

06/0

7

07/0

8

08/0

9

Season

Source: Secex

Currency increased cost of production and decreased price in US$ terms

3,50

4,00

price in US$ terms

2,50

3,00

r USD

1,00

1,50

2,00

BR

L pe

3 3

0,00

0,50

1,00

31/01

/0330

/04/03

31/07

/0331

/10/03

31/01

/0430

/04/04

31/07

/0431

/10/04

31/01

/0530

/04/05

31/07

/0531

/10/05

31/01

/0630

/04/06

31/07

/0631

/10/06

31/01

/0730

/04/07

31/07

/0731

/10/07

31/01

/080/0

4/08

1/07/0

8/10

/0801

/0904

/09 7/093 3 31 31 30

/31

/031

/131

/0130

/0431

/07/

BRL per USD USD per EUR

Demand on US reacting compared to the previous cropsUS Orange Juice Demand (million gallons on each 4 weeks period)

58

52

54

56

ons

46

48

50

mill

ion

gallo

42

44

46m

40

25-O

ct25

-Nov

25-D

ec

25-Ja

n

25-Feb

25-M

ar25

-Apr

25-M

ay25

-Jun

25-Ju

l25

-Aug

25-S

ep

Source: Nielsen

06/07 07/08 08/09

Land: Orange Juice and Sugarcaneg g

Sugarcane – São Paulo State Orange – São Paulo State

Source: São Paulo State Government – LUPA Project

Area in hectares and % of the classes of land use displaced for sugarcane expansion in use displaced for sugarcane expansion in São Paulo state

2007 2008

Source: “Sugarcane Ethanol contributions to climate change mitigation and the environment “- Wageningen Academic Publishers

Sugar Pricesg

Sugar Price

26

SPLO Land Price

10.000

16

18

20

22

24

cts/

lb

4 000

5.000

6.000

7.000

8.000

9.000

US

$/h

a

10

12

14

Jan-

09

Feb-

09

Mar

-09

Apr-0

9

May

-09

Jun-

09

Jul-0

9

Aug-0

9

Sep-

09

1.000

2.000

3.000

4.000

Nov-Dez/

01Mai-J

un/02

Nov-Dez/

02Mai-J

un/03

Nov-Dez/

03Mai-J

un/04

Nov-Dez/

04Mai-J

un/05

Nov-Dez/

05Maio

-Jun/0

6Nov-

Dez/06

Maio-J

un/07

Nov-Dez/

07May-

Jun/0

8Nov-

Dez/08

May-Jun/0

9

No M No M No M No M No

Ma No

Ma No Ma

No Ma

Pressure to erradicate orange groves to plant sugar cane is increasing since sugar price on ICE moved up close to 100% since

January 2009

Source: ICE Futures

Current Challenges

• Greening controlSão Paulo

W t (9 99%)

Northwest (0,10%)

North (3,67%)October 2004: 3,41%September 2007: 12,89%

Greening Evolution:

West (9,99%)

Center (33,10%)

South (35,93%)

April 2008: 18,57%April 2009: 24,01%

Source – Fundecitrus

Percentage of plots with incurrence of infected trees.

Current Challenges

• Consumption levels fell between 2001 and 2009 (Europe 10%, USA 29%, World 17%) however some recovery has been perceived

• Low prices of orange juice in the international market (50% decrease between May 2007 and May 2009)

• Production costs management (agricultural inputs, measures against Production costs management (agricultural inputs, measures against diseases)

• Greening control

• WTO Panel – on Zeroing

• Improve the national Data, Transparency and Cooperation with i t ti l i tiinternational organizations

• Disseminate information about the benefits of orange juice for health

Thank you

Christian LohbauerCitrusBR President

www.citrusbr.com

cl@citrusbr.com