1. World food market developments Rabobank International, New York

3. Section 1 Commodity Market Developments

5. Income and population growth are key drivers of increased food consumption Income growth (07) CAGR population (05-10) Source: UN, IMF, Rabobank Income and population growth in selected countries Size of bubble = 2006 population

6. China’s appetite for natural resources has had a big impact on all commodity prices Chinese energy consumption Iron ore contact prices Source: IMF, China State Statistical Bureau, Rabobank

7. Ethanol’s impact on commodity demand will focus on corn and sugar Source: Rabobank October 2007 Global ethanol production 28% 17% share (%) 475 230 … of which for ethanol 1670 1346 Sugar cane 19% 7% share (%) 157 48 … of which for ethanol 818 687 Corn 2% 1% share (%) 19 5 … of which for ethanol 803 734 Wheat and barley 2012 2006 million tonne

8. Ethanol by-product production and use is also expected to increase substantially DDGS production in North America DDGS displacement of corn Source: Informa, ProExporter, Rabobank

9. Increasing consumer demands which must be met are also affecting the cost of food Safety Environment & ethics Local vs Organics Time Value for money Quality Experience & emotion Health & Wellness

10. The increased presence of non-commercial interest in U.S. agricultural futures markets is having an impact Non-Commercial Corn Non-Commercial Soy Non-Commercial Wheat Non-Commercial Dairy Source: Bloomberg, Rabobank

11. Low inventory levels have contributed to higher and more volatile prices Global wheat stocks Global corn stocks Sources: USDA, Rabobank

12. The availability of additional arable land is limited Source: ADM, Toepfer International, FAO, Rabobank million hectares Area of grains, oilseeds and sugar crops Projected area of grains, oilseeds and sugar crops Other suitable agricultural land including forestry, orchards and pasture land OR land that may be taken out of agriculture due to environmental issues

13. The adoption of GM technology will play a key role in increasing production Agbiotech market by crop Agbiotech market by geography GM crop area (million acres) Agbiotech market by product segment

14. Fertiliser prices are indicative of higher input costs farmers are facing Fertiliser prices Fertiliser use by region

15. USD weakness also relevant Higher USD prices required to balance the market

16. Section 2 Implications for specific sectors

17. Growth in world fish production is coming from aquaculture and most of it has been in China FISHSTAT 2007

18. Despite increasing demand meat producers face a number of challenges especially with respect to feed costs Source: FAO, FAPRI, Rabobank, USDA, 2007 Global meat demand, 1985- 2015f

19. Consumption of fruit in Chile’s largest export market is forecast to increase but prices have been relatively stable Source: USDA Fruit & Vegetable consumption

20. Consumers tend to spend more on processed fruit and vegetables as their incomes increase

21. Orange juice concentrate prices have tended to react to supply disruptions

22. Chile faces strong competition in the U.S. which is an attractive market for all wine exporters Share of U.S. wine market- California vs. imports, 1970- 2010

23. Production growth > 4% Production growth 2 - 2.5% -12% 2.1% 0.2% 2% -7.6% 16% 6.6% -8.4% 2.5% 4.3% The strongest milk production growth is occurring in some of the non traditional dairying regions Production increase in key countries in 2007 Source: Rabobank, ZMP, NDDB, IBGE, SAGPyA, CDA 0.4%

24. When looking at export opportunities we need to remember that most commodities are thinly traded Small ripples in these national markets can create LARGE waves in the traded market European Union China USA Brazil Trade Russia AUS

25. Section 3 Outlook

26. Even when prices begin to decline they are projected to remain above their 2004 levels Index of projected real food crop prices, 2004 = 100 Source: World Bank, DECPG

27. Mexico: Removed tariffs and quotas on pulses, corn, milk, and sugar. Honduras: Introduced export ban on maize. Venezuela: In February, Pres. Chavez warned he may nationalize large food companies. Ecuador: Eliminated tariff on wheat and wheat flour and fixed bread prices. Peru: Considering subsidizing bread prices, encouraging production of potato bread. Brazil: Considering removal of tariffs on wheat. Bolivia: Eliminated import duties on wheat, wheat flour, rice, and maize. Banned wheat exports. Argentina: Corn export taxes increased to 25% and wheat to 28%. Stopped issuing corn export permits. Ongoing restrictions on beef exports, increased soybean export taxes Algeria: Gov’t budgeted $4.2 billion for farming in a 2005-09 recovery plan, aiming to improve soil quality, grant concessions of land to agricultural investors to carry out reforestation and promote farm businesses. Niger: On March 8, gov’t suspended taxes and customs duties on rice imports for 3 months and says it will increase state stockpiles of rice and cereals. Cameroon: Eliminated VAT on rice and fixed prices of rice. Egypt: Raised food subsidies. Turkey: Reduced tariffs on wheat and maize and eliminated that on barley. Azerbaijan: Eliminated VAT on grains. China: Introduced export levies on wheat, buckwheat, barley, and oats by 10%. Increased those on wheat flour and starch, maize, sorghum, millet, and soybeans. Introduced export quotas on flour made of wheat, maize, and rice. Placed price controls on staples such as dairy products. Pakistan: Imposed levies on exports of wheat and wheat flour. Banned private exports of wheat to Afghanistan. South Korea: Reducing tariffs on wheat and corn and eliminating those on soybeans and feed maize. India: Eliminated tariffs on wheat and wheat flour and restricted rice exports. Bangladesh: Reduced tariffs of rice and wheat imports by 5%. Vietnam: Restricted rice exports, lowered import tariffs on a range of dairy products. Indonesia: Eliminated tariffs on wheat and soybeans. Philippines: On 2/21, the gov’t said Pres. Arroyo asked Vietnamese Prime Minister Dung to guarantee a supply of up to 1.5 mln tonnes of rice, signaling rising nervousness about tight supply. On 3/11, gov’t asked for supplies from the East Asia Emergency Rice Reserve, a stockpile from S. East Asian nations, China, Japan, and South Korea, to meet a domestic shortfall. On 3/17, the gov’t asked fast-food restaurants to serve half portions of rice as sides to main dishes to cut down on waste. Source: Various, Rabobank, correct as at 31 March 2008 Policy responses will be important Russia: Implemented price controls on certain dairy products, increased beef import quotas