Sunflowerseeds market in Russia: season 2015/16 Trade and Trends

Gritsai Anton, EFKO Group

Russia

EFKO-Trade LLC grain & oil

export/import tel./fax: +7(863)300-11-39/40/38 efko_trade@aaanet.ru

www.efko.ru

EFKO Group: outlook

Обзор деятельности ГК ЭФКО

Results of 2014: outlook

EFKO’s Infrastructure, 2015

The largest holding in Eurasian Economic Community oils and fats market

Belgorod Oilseeds crush – 747 tsnd.tons

Export of packaged sunoil –17 tsnd.tons Export of crude sunoil in bulk – 209 tsnd.tons

Yoghurt

Industrial

fats– 471 tsnd.tons

Mayonnaise –

123 tsnd.tons

Ketchup – 9 tsnd.tons

R&D

More than 10 thousand employees Vertically integrated business model

Voronezh

Taman Rostov-on-Don

Saratov

Krasnodar

Interior silos

Oilseed crushing plants

Three oilseed crushing plants have total crushing capacity 1,5 mln.tn per year Oil production – 0,5 mln.mts per year Meal production – 0,8 mln.mts per year 10interior silos with total capacity of 1 million tons of grain

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EFKO Group in EEC Market* Группа ЭФКО на рынке ЕАЭС*

Industrial fats market

#1

6% EFKO

20% NMZHK + DW

SolPro

35% 10%

Cargill

Soyuz

5%

Others

25%

Market of mayonnaise

#1-2 15% 3%

EFKO

Essen production

15% 14% Unilever

4% 12%

NMZHK

SolPro

3%

KZHK

29%

5% Rusagro

Others

EFC

Market of packaged sunflower oil

#2

32%

EFKO Yug Rusi

8% EFC SolPro

4%

2%

3% Cargill Bunge

36% 9% Aston Others

6%

Export of sunoil

#3 EFKO Yug Rusi

15% 23%

Aston

SolPro

12%

Artis

Rusagro

11%

25% 8% Others

6%

____________________ *Евразийский Экономический Союз 3 Eurasian Economic Union

Sunflowerseeds supply and demand in Russia: forecast for 2015/16

Прогноз баланса семян подсолнечника в России в сезоне 2015/16

2013/14 2014/2015 2015/2016 (forecast) , tsnd mts , %

Opening stocks 85 213 52 -161 -75,59%

Production (clean weight) 9 822 8 727 9114 387 4,43%

Import 35 96 100 4 4,17%

Export 109 39 20 -19 -48,72%

Crush 9 320 8 795 8 966 171 1,94%

Other use 300 150 200 50 33,33%

Ending stocks 213 52 80 28 53,85%

Supply to demand ratio, % 102,19% 100,58% 100,87%

250 102,50%

200 102,00%

150 101,50%

100 101,00%

100,50%

50

100,00%

0 99,50%

2013/14 2014/2015 2015/2016 (forecast)

Ending Stocks Supply to demand ratio, %

Russian sunflowerseeds and rapeseeds crop in 2015/16

Russian Federation SFS gross crop RS gross crop Total

9 794 1 150 10 944

Central FD 2 682 308 2 990

Southern FD 2 715 52 2 767

Volga Region 3 467 193 3 660

North Caucasian FD 312 79 391

Others FD 618 519 1 137

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Sunflower seed oil supply and demand in Russia: forecast for 2015/16

Прогноз баланса подсолнечного масла в России в сезоне 2015/16

2013/14 2014/2015 2015/2016 (forecast) , tsnd mts , %

Opening stocks 215 139 201 62 45%

Production 3 961 3 739 3 855 116 3%

Import 10 1 1 0 0%

Export (crude sunoil) 1 435 1046 1 260 214 17%

Domestic consumption 2 612 2 632 2 625 -2 0%

Ending stocks 139 201 172 -29 -14%

Supply to demand ratio, % 103,43% 105,46% 104,43%

250 106,00%

200

105,00%

150

104,00%

100

50

103,00%

0

102,00%

2013/2014 2014/2015 2015/16 (forecast)

Ending stocks Supply to demand ratio, %

5

Russian oilseeds crush capacity utilization

Загруженность мощностей по переработке масличных культур в РФ

тыс. т 83% 69% 91% 77% 11 200 – gross harvest of oilseeds in Russia, 16 000 13 800

13 800 14 500

13 800 tsnd tons.

14 000

12 500

12 000 11 400 sunflowerseed

11 200

rapeseed

10 000 9 500

8 000 linseed

6 000 others

10 554

4 000 9 697 9 034 Oilseeds crush capacity in Russia,

7 993

tsnd tons

2 000

77% - oilseeds crush capacity utilization

0

in Russia

11/12 МГ 12/13 МГ 13/14 МГ 14/15 МГ

Forecast of capacity allocation in Federal Districts of Russia in 2015/16

Forecast of sunflower and rapeseed gross harvest allocation in Federal Districts of Russia in 2015/16.

North-Western FD Sunflowerseed Rapeseed

2% Ural FD OTHERS 1% УФО 1%

Siberian FD 0,5%

4% Siberian FD 4% OTHERS

North-W FD 9%

Central FD 27% Southern FD11%

Ural FD 12%

Volga FD

Southern FD

20% Volga FD 17%

16 100 43% 11 000 1 150

Southern FD 9 794

tsnd.tons tsnd.tons

Siberian FD 23%

31%

Central FD Central FD 27%

31% Volga FD 35%

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Обеспеченность переработчиков подсолнечником в 2015/2016 МГ

в разрезе федеральных округов РФ Sunflowerseeds crush capacity utilization in the crop year 2015/2016, regional statistics

North-Western

Region

Central Region

4 942

56%

2 754 Volga Region

3 157 88%

2 770

6 877 Southern

Region

47% 3 203

New crushing capacities to launch in 2015/16

Capacities, tsnd mts Russian Federation 1 624 000 Central FD 504 000

Lipetsk region

Terbuny 384 000

Tambov Region

Maksimovskiy Plant 120 000

Southern FD 640 000

Volgograd Region

Cargill’s ‘Novoanninskiy’ Plant 640 000

Volga FD 480 000 Orenburg region

Sorochinskiy Plant 384 000

Samara region

Yakushinskoe Oil LLC 96 000

Oilseeds crush capacity, tsnd. mts Sunflowerseeds crush capacity utilization, tsnd. mts

Мо

56% Sunflowerseeds crush capacity utilization, %

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Top-10 Russian crude sunflower seed oil exporters Рейтинг экспортеров подсолнечного масла из России

2013/14 % 2014/15 %

1 Aston 270776 18,8% 242031 23,1% 4,70% 300000

18,8%

2 Yug Rusi 239843 16,70% 158069 15,1% -1,26%

16,7% 17.1%

250000

3 EFKO

244718 17,1% 123230 11,8% -4,96% 23,1%

4 SolPro 119925 8,4% 117737 11,3% 3,10% 200000

5 Artis 126441 8,8% 79445 7,6% -1,04%

6 Rusagro 124708 8,7% 61195 5,9% -2,68% 150000 15,1%

7 Glencore 59452 4,1% 47274 4,5% 0,47% 8,4% 8,8% 8,7%

11,8%

8 NMZHK 71539 5% 40222 3,8% -1,04% 100000

11,3% 10%

9 Kernel 73146 5,1% 36478 3,3% -1,52%

7,6%

4,1% 5% 5.1%

5%

10 Sodruzhestvo 32923 2,3% 27408 2,6% 0,38% 50000 5,9%

4,5% 3,8% 3,3% 2,3% 2,6%

Others 71258 5% 104237 10% 3,85%

1 434 729 100% 1 046 326 100% 0

Aston Yug Rusi EFKO SolPro Artis Rusagro Glencore NMZHK Kernel Sodruzhestvo Others

2013/14 2014/15

Total Russian SFO export in 2013/14 and 2014/15

Совокупный экспорт подсолнечного масла из России в 2013/14 и 2014/15 200 000 180 000 160 000 140 000 120 000 100 000 80 000 60 000

40 000 20 000

0 September October November December January February March April May June July August

2014/15 2013/14

Source: custom and port statistics 8

Топ-10 импортеров подсолнечного масла из России

Top-10 importers of Russian crude sunflowerseed oil

Crop 2013-14 – Custom statistics

Country Quantity, thous. mts % 1 Turkey 528 42% 2 Egypt 425 34% 3 EU 88 7% 4 Iran 53 4%

86% of the total Russian

export 1% 2% 1% 2%

3% 3%

Turkey Egypt EU Iran

5 Saudi Arabia + UAE 43 3% 6 Kazakhstan 39 3% 7 Azerbaijan 30 2% 8 Sudan 28 2% 9 Lebanon 11 1%

10 Morocco 8 1% Total: 1 253 100%

4%

7%

42%

Saudi Arabia / UAE Kazakhstan Aserbaijan

34% Sudan

Lebanon Morocco

Crop 2014-15 – Custom and port statistics

Country Quantity, thous. mts % 1 Turkey 573 60% 2 Egypt 136 14% 3 Kazakhstan 61 6% 4 Sudan 51 5% 5 Azerbaijan 35 4% 6 Saudi Arabia 35 4% 7 Iran 33 3% 8 China 21 2% 9 Tajikistan 7 1%

10 Oman 6 1% Total: 958 100%

91,6% of the total Russian export 1%

1% 3% 2%

4%

4%

5%

6%

60%

14%

Turkey Egypt

Kazakhstan Sudan

Azerbaijan Saudi Arabia

Iran China

Tajikistan Oman

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Ставки импортных и экспортных пошлин на семена масличных Russian oilseeds: import and export taxation rates

Изменение уровня ставок импортных и экспортных пошлин в соответствии с обязательствами России при присоединении к ВТО

Russian oilseeds export taxes reduction according to WTO trading rules

On the agreement date As from 01.09.2013, As from 01.09.2014, As from 01.09.2015, As from 01.09.2016, end

(August, 2012) transition period transition period transition period of transition period Soya beans 20 13,33 6,67 0 0

Rape seeds 20 15 11 9 6,5

Sunflower seeds 20 16,62 13,24 9,88 6,5

10 10

Conclusions

Sunflowerseeds crop forecast in the crop year 2015-16 is 9.1 mln mts (+387 tsnd mts vs 2014/15)

Despite sunflowerseeds export tax reduction down to 9.88% we do not expect the seeds export to pick up due to a deficit of domestic crush capacity utilization resulting in higher domestic prices vs export prices

Crude sunflowerseed oil output forecast in the crop year 2015-16 is 3,8 mln mts (+ 116 tsnd mts vs 2014/15)

Crude sunflowerseed oil export forecast in the crop year 2015-16 is 1260 mln mts (+214 tsnd mts vs 2014/15)

Russian domestic sunflowerseeds crush capacity utilization remains deficit as crop rise will not offset the increase of the crush capacity (387 thous. mts vs 1.6 mln mts). Domestic sunflowerseeds origination competition remains tough and stimulate higher domestic prices

Turkey, Egypt and Arab countries will remain importers of Russian sunflowerseed oil

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Thank you for your attention

EFKO-Trade LLC grain & oil export/import

tel./fax: +7(863)300-11-39/40/38

efko_trade@aaanet.ru

www.efko.ru

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