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Market situation & 2020/21 OutlookCereals

Eric WillemsHead of Sector

Arable crops, sugar, fibre plants, animal feed

2

CEREAL WORLD BALANCE SHEET – IGC (23 MARCH)

Wheat 2006/07 2007/08 2008/092009/10

(est)2010/11

(forecast)Production 598 609 686 678 649Trade 111 110 136 128 123Consumption 609 613 641 648 662Stocks 125 122 167 197 1858 major exporters* 47 41 64 73 58

Maize 2006/07 2007/08 2008/092009/10

(est)2010/11

(forecast)Production 710 795 799 813 808Trade 87 101 84 86 94Consumption 725 775 781 816 842Stocks 117 137 155 152 118

Total cereals 2006/07 2007/08 2008/092009/10

(est)2010/11

(forecast)Production 1588 1698 1802 1792 1726Trade 222 239 249 240 243Consumption 1628 1685 1727 1760 1788Stocks 283 296 371 402 3418 major exporters* 117 114 152 163 106* Argentina, Australia, Canada, EU, Kazakhstan, Russia, Ukraine, USA

3

WORLD WHEAT BALANCE SHEET - IGC

122

167

197185 187

4164 73

58 60

678

648

609

686

649

673

641

613

662671

0

100

200

300

400

500

2007 2008 2009 2010 (est) 2011 (fcst)

MM

T

560

580

600

620

640

660

680

700

World Ending Stocks

of which 8 major exporters

World Production

World Consumption

MM

T

Source: IGC Mar report

4

Wheat export prices from 1/1/2007 onwards

$309

220

249

223

50

100

150

200

250

300

350

400

450

02/0

1/08

18/0

2/08

05/0

4/08

22/0

5/08

08/0

7/08

24/0

8/08

10/1

0/08

26/1

1/08

12/0

1/09

28/0

2/09

16/0

4/09

02/0

6/09

19/0

7/09

04/0

9/09

21/1

0/09

07/1

2/09

23/0

1/10

11/0

3/10

27/0

4/10

13/0

6/10

30/0

7/10

15/0

9/10

01/1

1/10

18/1

2/10

03/0

2/11

22/0

3/11

qu

ota

tio

ns

in $

an

d E

UR

$ US SRW FOB Gulf € US SRW FOB Gulf € Dlvd Rouen (11-12, 5% protein) € UK feed FOB

5

US CBOT SRW wheat futures since 1/1/2010

Chicago (CBOT) SRW futures contracts since1 January 2010

265

293

311

175

200

225

250

275

300

325

350

2011 05 May

2011 09 Sep

2012 09 Sep

6

EU Wheat futures since 1/1/2010

Euronext - NYSE (Paris) Milling wheat contracts (since 1 January 2010)

225

193

202

125

150

175

200

225

250

275

300

€/t

2011 05 May

2011 08 Aug

2011 11 Nov

7

WORLD MAIZE BALANCE SHEET - IGC

137155 152

118

41,3 42,5 43,3

17,1

808

842

813795

799

816

781

775

0

100

200

300

400

500

2007 2008 2009 (est) 2010 (fcst)

MM

T

700

720

740

760

780

800

820

840

860

World Ending Stocks

of which US

World Production

World Consumption

MM T

Source: IGC Mar report

8

Maize export prices from 1/1/2007 onwards

288

205

221

204

75

125

175

225

275

325

04/0

1/07

15/0

2/07

05/0

4/07

24/0

5/07

12/0

7/07

30/0

8/07

18/1

0/07

06/1

2/07

24/0

1/08

13/0

3/08

01/0

5/08

19/0

6/08

07/0

8/08

25/0

9/08

11/1

3/08

08/0

1/09

26/0

2/09

15/0

4/09

03/0

6/09

22/0

7/09

09/0

9/09

28/1

0/09

16/1

2/09

03/0

2/10

24/0

3/10

12/0

5/10

30/0

6/10

18/0

8/10

06/1

0/10

24/1

1/10

12/0

1/11

02/0

3/11

qu

ota

tio

ns

in $

an

d E

UR

/t

$ USYC Gulf FOB € USYC Gulf FOB€ Dlvd Bordeaux € Budapest

9

EU-27 Simplified balance sheetTOT CEREALS 2007/08 2008/09 2009/10 2010/11e 2011/12f

Production 256,3 311,3 291,5 274,5 285,8Imports 28,3 12,3 8,0 13,4Uses 265,1 272,3 275,7 271,7o.w. Feed 166,6 170,8 172,7 167,0Exports 19,5 33,3 27,4 28,2End stocks 44,3 60,1 54,3 40,1

WHEATProduction 119,0 149,4 137,0 134,7 141,4Imports 6,8 7,5 5,3 5,7Uses 116,5 125,4 127,5 122,2o.w. Feed 48,3 56,1 56,8 51,0Exports 11,6 24,7 21,5 20,3End stocks 17,9 23,6 16,1 13,1

COARSE GRAINSProduction 137,3 161,9 154,5 139,8 144,4Imports 21,5 4,8 2,7 7,7Uses 148,6 146,9 148,2 149,5o.w. Feed 118,3 114,7 115,9 116,0Exports 7,9 8,6 5,9 7,9End stocks 26,4 36,5 38,2 27,0

10

0

50

100

150

200

250

(CZ

E)

Cze

chR

epub

lic

(DA

N)

Den

mar

k

(DE

U)

Ger

man

y

(ES

P)

Spa

in

(FR

A)

Fra

nce

(HU

N)

Hun

gary

(NE

D)

Net

herla

nds

(PO

L) P

olan

d

(RO

U)

Rom

ania

(UK

I) U

nite

dK

ingd

om

2006 2007 2008

Average common wheat prices, EUR/t

Source: EU-FADN – DG AGRI L.3

11

Common wheat : Average yearly producer and market prices (2007 & 2008)

100

125

150

175

200

225

250

CZ Rep DK DEU ES F HU PL RO UK

EU

R/t

2007 Producer

2007 Market

2008 Producer

2008 Market

12

EU intervention

Quantity available for the resale on the internal market in MY 2010/11 = 2.8 mio t

• Quantities sold so far : 2.5 mio t

• Quantities remaining: <0.3 mio t barley

Quantity available under the Most Deprived Programme in 2011 = 2.8 mio t

• 882,000 t sold so far (>0.5 mio t in past week)

13

Import duties (2004-2011)

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

90,00

100,00

1/07

/200

4

9/09

/200

4

18/1

1/20

04

27/0

1/20

05

7/04

/200

5

16/0

6/20

05

25/0

8/20

05

3/11

/200

5

12/0

1/20

06

23/0

3/20

06

1/06

/200

6

10/0

8/20

06

19/1

0/20

06

28/1

2/20

06

8/03

/200

7

17/0

5/20

07

26/0

7/20

07

4/10

/200

7

13/1

2/20

07

21/0

2/20

08

1/05

/200

8

10/0

7/20

08

18/0

9/20

08

27/1

1/20

08

5/02

/200

9

16/0

4/20

09

25/0

6/20

09

3/09

/200

9

12/1

1/20

09

21/0

1/20

10

1/04

/201

0

10/0

6/20

10

19/0

8/20

10

28/1

0/20

10

6/01

/201

1

eur/

t

Maize

Sorghum

import duties set at 0

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

45,00

50,00

1/07

/200

4

9/09

/200

4

18/1

1/20

04

27/0

1/20

05

7/04

/200

5

16/0

6/20

05

25/0

8/20

05

3/11

/200

5

12/0

1/20

06

23/0

3/20

06

1/06

/200

6

10/0

8/20

06

19/1

0/20

06

28/1

2/20

06

8/03

/200

7

17/0

5/20

07

26/0

7/20

07

4/10

/200

7

13/1

2/20

07

21/0

2/20

08

1/05

/200

8

10/0

7/20

08

18/0

9/20

08

27/1

1/20

08

5/02

/200

9

16/0

4/20

09

25/0

6/20

09

3/09

/200

9

12/1

1/20

09

21/0

1/20

10

1/04

/201

0

10/0

6/20

10

19/0

8/20

10

28/1

0/20

10

6/01

/201

1

eu

r/t

Blé dur haute qualité

Blé dur moyenne qualité

Blé dur basse qualité

import duties set at 0

14

EU cereal import duties 1 April 2011

0.0

0.0

0.0

0.0

89.0

0.0

0.0

56.0

93.0

0.0

93.0

95.0

95.0

37.0

0.0

0.0

0 20 40 60 80 100 120 140

Rye

Sorghum

Maize

Common wheat high quality

Durum wheat high quality

Durum wheat medium quality

Durum wheat low quality

Buckwheat

Millet

Triticale

Oats

Barley TRQ

Barley

Common wheat TRQ

Common wheat medium quality

Common wheat low quality

Euro per tonne

Variable duties: situation 16 Mar. 2011 and maximum WTO duties (hachures)

Fixed duties

Wheat & barley TRQ duties suspended until 30/06/11

15

MTF - Balanced EU cereal markets (mio t)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EU 15 EU 25 EU 27

ProductionNon-feed use

Feed use

Bioethanol

Exports Imports

16

MTF - Relatively tight market limit cereal stocks and exports (mio t)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EU 15 EU 25 EU 27

Exports

Private stocks

Intervention stocks

17

Thanks for your attention

18

EU Commitments 2010/2011 (38 weeks)

• Imports: 9.2 mio t (6.4 mio t in 2009/10; 8.7 mio t 2-years ago)• 1.7 mio t soft wheat (2.6 mio t), • 1.6 mio t durum wheat (1.7 mio t),• 5.2 mio t maize (2.0 mio t), • 520 000 t sorghum (4 000 t)• 25 000 t barley (91 000 t)

• Exports: 21.7 mio t (16.4 mio t last year; 22.8 mio t 2 years ago)• 15.9 mio t soft wheat flour inclusive (14.2 mio t), • 3.6 mio t barley (703 000 t)• 1.2 mio t durum wheat (492 000 t)• 806 000 t maize (868 000 t)

• Net exporter: 12.5 mio t (10.0 mio t last y; 14.1 mio t 2 y ago)

19

Cereals: (low) yield growth keeps the sector growing

EU-27 area, yield and production projections – 2020/21 vs. 2009/10 - %

-15%

-10%

-5%

0%

5%

10%

15%

20%

soft wheat durum wheat barley maize rye oats other cereals TOTALCEREALS

area yield supply

20

Soft wheat market balance (mio t)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EU 15 EU 25 EU 27

Production

Non-feed use

Feed use

Bioethanol

Imports

Exports

21

Barley market balance (mio t)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Non-feed use

Exports

EU 15 EU 25 EU 27

Production

Feed use

Imports

Bioethanol

22

Maize market balance (mio t)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EU 15 EU 25 EU 27

Non-feed use

Feed use

Production

Bioethanol

Imports

Exports

23

Cereals prices: another blip or a new pattern?EU-27 domestic price projections – €/t

50

70

90

110

130

150

170

190

210

230

250

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Soft wheat Maize Barley

24

EU Maize cumulated import commitments

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

t

Maize other than seed 2010/11 Maize other than seed 2009/10

Maize other than seed - Average 2004/05_2008/09 Maize other than seed - Trimmed Average 2004/05_2008/09

AVERAGE 5MY

TRIMMED AVERAGE 5MY

MY 2010/11

MY 2009/10

MAIZE CUMULATED IMP