welcome to the world of rabobank!€¦ · food & agribusiness: a global complex farm inputs...
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wholesale2005.ppt
Adrie Zwanenberg NUFFIELDGlobal Head F&A Research 20 February 2006
Welcome to the world of Rabobank!
The dynamics of global food and agribusiness
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The world of Rabobank
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Food & agribusiness: a global complex
Farm inputs
Food service
Farm production
Trade and distribution
ProcessingWholesale and trade
Food retail
Non food
Consumers
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Global F&ANumerous changes and challenges
• Food consumption• Agricultural production• Mature markets• Emerging markets• Food retail• Foodservice• Market power• Agricultural policy• New technology• Expansion of the EU• Co-operative issues• Trade flows• Etcetera
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Evolution of food demand
Income Food
Eastern Europe
Western Europe Japan North America
Surviving More staples
Variety Quality High tech
Rice, bread, beans
Meat, dairy, oils, sugar
Diet food, Ready to eat
Africa (Sub-Sahara)
Consumption stage
Latin America India China
Growth markets
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Non-traditional dairy regions drive growth…Market growth expectations (2003 – 2010)
0
2
4
6
8
10
12
14
16
aver
age
annu
al c
hang
e %
China/H
ongKong
Sub Saharan A
frica
S E A
siaNew E
U-10
Mid
dle East
/N A
frica
Latin A
meric
a
Russia
/the U
krain
e
India
/Pakist
anJa
pan/Kore
a
North A
meric
aEU-1
5
Total dairy market growth
India/Pakistan
EU15North America
Latin America
China
Russia/Ukraine
New EU10
Japan/Korea
OceaniaCEEC outside EU
Sub Saharan Africa
Other SE Asia
Total dairy market volume
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…driven by huge potential in per capita demandper capita consumption in milk equivalents
IndiaBrazil China
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Agricultural production growing fasterthan population
95
100
105
110
115
120
125
130
135
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Index (1990=100) Crop production Livestock production Population
Source: Food and Agric u ltu re O rganization of the U nite d Nations, 2005.
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0
20
40
60
80
100
120
140
160
180
200
220
Chin
a
US
India
Japan
Indonesi
a
France
Italy
Turk
ey
Bra
zil
Mexic
o
Spain
Russ
ian F
ed.
Germ
any
Billion USD
1993
2002
2003
Sou rc e : W orld B ank , 2005.
Cost benefits and expanding domestic markets boost farm production
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F&A companies have to adapt their strategies
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Sou rc e : Food and Agric u ltu re O rganization of the U nite d Nations,2005.
5.6%3.4%17.6%3.1%3.3%2.7%5.5%
5.7%8.0%8.2%4.9%
4.4%
3.6%2.4%
2.7%
0
10
20
30
40
50
60
70
1.
U.S
.
2.
Fra
nce
3.
Neth
erl
ands
4.
Germ
any
5.
Belg
ium
6.
Spain
7.
Bra
zil
8.
Italy
9.
Canada
10.
UK
11.
Chin
a
12.
Aust
ralia
13.
Arg
entina
14.
Denm
ark
15.
Thailand
billion USD 1993 2003
On top the CAGR 1993-2003
Latin America gains ground in F&A exports
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Sou rc e : Food and Agric u ltu re O rganization of the U nite d Nations,2005.
6.4%
2.5%
1.5%5.3%
3.3%
2.8%4.6%
10.6%3.8%
5.8%5.9%
7.6% -0.7% 3.8%0%
0
10
20
30
40
50
60
1.
U.S
.
2.
Germ
any
3.
Japan
4.
UK
5.
Fra
nce
6.
Italy
7.
Neth
erl
ands
8.
Chin
a
9.
Belg
ium
10.
Spain
11.
Canada
12.
Mexic
o
13.
Russ
ia
14.
S.
Kore
a
15.
Hong K
ong
billion USD 1993 2003
On top the CAGR 1993-2003
Boost to U.S. food & agri imports
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Sou rc e : Food and Agric u ltu re O rganization of the U nite d Nations,2005.
Emerging countries show increasing F&A trade surplus
Top 10 countries with largest trade surplus, with on top export and import (in 2003)
Ex 20.9 Im 3.6
Ex 41.9Im 25.1
Ex 13.9Im 0.7
Ex 42.1Im 30.7
Ex 15.0Im 3.9
Ex 62.3Im 53.5
Ex 10.4Im 3.5 Ex 7.9
Im 1.5 Ex 11.4Im 6.1
Ex 9.6Im 4.3
0
4
8
12
16
20
24
1. Bra
zil
2. N
ether
lands
3. Arg
entina
4. Fr
ance
5. Aust
ralia
6. U
S
7. Th
aila
nd
8. N
ewZea
land
9. D
enm
ark
10. M
alay
sia
billion USD
1993 2003
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Agricultural policy: towards more liberalised trade
• Production quotas• Border measures• Europe• U.S.• Japan• Single Farm Payment System• Farm Bill• WTO • Market access• Export support• Domestic support• Hong Kong• China• Russia• India• Brazil
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EU enlargement: New Members have immediate use of CAP market & price policy and a gradual phasing in of income support
• Ten New Member States entered the EU in May 2004
• Rumania and Bulgaria will join the EU in 2007
• Turkey and Croatia have applied for EU membership
EU-15
New Member States
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Black Sea RegionRussia, Ukraine, Kazakhstan, Rumania, Bulgaria
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The Black Sea Region is becoming a dominant force in the world wheat market
-15
-10
-5
0
5
10
15
20
25
30
35
M.
ton
nes
1975/1976 1978/1979 1981/1982 1984/1985 1987/1988 1990/1991 1993/1994 1996/1997 1999/2000 2002/2003 2005/2006
Year
Wheat* trade balance Black Sea Region
Source: USDA, 2005
* Crops: wheat and barley
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OutlookEmergence of markets in Latin America, Asia, Eastern Europe…also for research, production, processing and trade
Emerging countries will benefit most from trade liberalisation…but natural constraints are crucial
Companies have to focus on what they really excel in…be flexible and cooperate with others when needed
New forms of cooperation, further internationalisation,and growth of industry in emerging markets offernew opportunities for financing global food and agri!