BLACK SEA SUNSEED MARKETS & 2017/18 NEW-SEASON PROSPECTS

BLACK SEA SUNSEED MARKETS & 2017/18 NEW-SEASON PROSPECTS AGRO-LOGISTICS FORUM 18 October 2017, Kishinev / MOLDOVA

AGENDA 1-THE ROLE OF SUNSEED GLOBALLY 2 BLACK SEA SUNSEED OUTLOOK 3 2017/2018 NEW-SEASON PROSPECTS 4- PRESENTATION SUMMARY

THE ROLE OF SUNSEED GLOBALLY

IN THE LAST 2016/17 SEASON; WORLD OILSEEDS PRODUCTION WAS AROUND RECORD 560 MLN T. SUNSEED WAS THE 3RD BIGGEST OILSEED FOLLOWING SOYBEAN AND RAPESEED WITH 8.9% ( RECORD 50.0 MLN T ) SHARE.

GLOBAL OILSEEDS PRODUCTION ( MLN T ) Rapeseed 68 12% Cottonseed 39,5 7% Sunseed 50 9% Others 52,5 9% Soybean 350 63% 2016/17 Season, 560 Mln T total Source: SUNSEEDMAN, OIL WORLD, USDA

WHILE GLOBAL SUNSEED PRODUCTION WAS ONLY 7 8 MLN T IN 1960 s, IT CLIMBED TO AROUND 25 MLN T BY EARLY NEW- MILLENIUM AND DOUBLED SO FAR WITH THE SUPPORT OF BLACK SEA ESPECIALLY.

BLACK SEA SUNSEED OUTLOOK

IN OUR PRESENTATION WE WILL RATHER FOCUS ON UKRAINE, RUSSIA, ROMANIA, BULGARIA, TURKEY, MOLDOVA AND KAZAKHSTAN. SINCE GEORGIA ( 10 KMT ) AZERBAIJAN ( 20 KMT ) AND ARMENIA ( NIL ) HAVE NEGLIGIBLE SUNSEED PRODUCTIONS AND TRADES.

BLACK SEA & GLOBAL SUNSEED PRODUCTION Acreage ( Thd Hectare ) Yield ( Kgs/Decare ) Crop Size ( Thd T ) COUNTRY 2016/17 2015/16 2016/17 2015/16 2016/17 2015/16 Ukraine 6.350 5.550 240 216 15.250 12.000 Russia 7.750 7.400 152 135 11.750 10.000 Romania 1.025 1.000 185 180 1.900 1.800 Bulgaria 825 810 218 210 1.800 1.700 Turkey* 585 570 231 214 1.350 1.220 Moldova 400 350 213 171 850 600 Kazakhistan 810 700 93 79 750 550 BLACK SEA TOTAL 17.745 16.380 190 170 33.650 27.870 Argentina 1.750 1.350 197 211 3.450 2.850 China 1.075 925 256 292 2.750 2.700 Hungary 650 625 292 248 1.900 1.550 France 550 620 218 191 1.200 1.185 USA 625 735 192 184 1.200 1.350 South Afr. Rep. 650 720 135 104 875 750 Spain 725 740 100 101 725 750 Serbia 200 175 313 271 625 475 Others 3.550 3.540 102 102 3.625 3.620 Total 27.520 25.810 182 167 50.000 43.100 * 150-175 kmt of Turkish confectionary and hybrid production are excluded.

AS YOU SEE FROM THE TABLE; BLACK SEA IS THE HEART OF GLOBAL SUNSEED PRODUCTION WITH 2/3 SHARE ( 33.65 MLN T OF 50.0 MLN T ) IN 2016/17 SEASON.

AS YOU SEE FROM THE TABLE; UKRAINIAN ( 15.25 MLN T ) AND RUSSIAN ( 11.75 MLN T ) PRODUCTIONS OF TOTAL 27.0 MLN T WAS MORE THAN HALF OF GLOBAL SUNSEED PRODUCTION ( 50 MLN T ) IN 2016/17 SEASON.

AS YOU SEE FROM THE TABLE; EVEN WITH ONLY 93 KGS/DECARE OF KAZAKH YIELDS, BLACK SEA SUNSEED YIELD AVERAGE OF 190 KGS/DECARE WAS MORE THAN GLOBAL AVERAGE OF 182 KGS/DECARE IN 2016/17 SEASON.

FOLLOWING BLACK SEA/GLOBAL SUNSEED PRODUCTION AND YIELD COMPARISIONS, NOW LET S LOOK AT ALSO BLACK SEA/GLOBAL SUNSEED TRADE COMPARISON.

BLACK SEA & GLOBAL SUNSEED TRADE Exports ( Thd T ) Imports ( Thd T ) COUNTRY 2016/17 2015/16 COUNTRY 2016/17 2015/16 Romania 1.300 1.050 Turkey** 620 395 Bulgaria 650 650 Romania 225 150 Moldova 600 355 Bulgaria 160 100 Russia 375 105 Russia 100 125 Ukraine 275 185 Kazakhstan 15 20 Kazakhstan 265 170 Ukraine*** 0 0 Turkey* 0 0 Moldova*** 0 0 BLACK SEA TOTAL 3.465 2.515 BLACK SEA TOTAL 1.120 790 Argentina 70 300 Holland 640 630 China 350 285 France 590 335 Serbia 125 115 Spain 390 380 USA 100 105 Iran 180 130 Hungary 310 390 Uzbekistan 120 95 France 310 335 Pakistan 110 20 Slovakia 220 170 China 100 75 Others 685 540 Others 2.020 1.920 Total 5.635 4.755 Total 5.270 4.375 * Turkey has only confectionary and hybrid seed exports. ** Turkish confectionary and hybrid seed imports are excluded. *** Ukrainian and Moldovian Sunseed imports of hybrid seeds were excluded.

AS YOU SEE FROM THE TABLE; BLACK SEA IS ALSO THE HEART OF GLOBAL SUNSEED EXPORTS WITH 61.5% SHARE ( 3.47 MLN T OF 5.64 MLN T ) IN 2016/17 SEASON.

AS YOU SEE FROM THE TABLE; ROMANIA ( 1.3 MLN T ) AND BULGARIA ( 0.65 MLN T ) WERE 2 GIANT EXPORTER COUNTRIES WITH TOTAL 1.95 MLN T OF 5.64 MLN T GLOBAL SUNSEED EXPORTS ( IE, 34.5% ) IN 2016/17 SEASON.

AS YOU SEE FROM THE TABLE; WHEREAS UKRAINE AND RUSSIA HAD MORE THAN HALF GLOBAL SUNSEED PRODUCTION, THEIR EXPORTS WERE ONLY 375 KMT OF RUSSIA AND 275 KMT OF UKRAINE IN 2016/17 SEASON.

10% SUNSEED EXPORT-DUTY IN UKRAINE AND 6.5% SUNSEED EXPORT DUTY IN RUSSIA AS WELL AS STIFF COMPETITION IN BETWEEN LOCAL SUNSEED EXPORTERS AND CRUSHERS ARE PREVENTING SUNSEED EXPORTS BY ALLOWING MORE SUNSEED CRUSHINGS AND SUNOIL EXPORTS ( PLEASE NOTE THAT UKRAINE AND RUSSIA ARE 2 BIG SUNOIL GLOBAL EXPORTERS ).

AS YOU SEE FROM THE TABLE; TURKEY WAS THE SECOND BIGGEST GLOBAL SUNSEED IMPORTER AFTER EU-28 WITH AROUND 620 KMT OF 5.27 MLN T GLOBAL SUNSEED IMPORTS IN 2016/17 SEASON.

AS YOU SEE FROM THE TABLE; THE MAIN OF ORIGINS OF TURKISH OIL-BEARING SUNSEED IMPORTS WERE RUSSIA ( 225 KMT ), MOLDOVA ( 205 KMT ), BULGARIA ( 95 KMT ), ROMANIA ( 35 KMT ), UKRAINE ( 30 KMT ) AND ARGENTINA ( 30 KMT ) IN 2016/17 SEASON.

SINCE TURKEY IS THE BIGGEST SUNSEED IMPORTER COUNTRY IN BLACK SEA, CIF MARMARA & DAP KAPIKULE PRICES MAY BE ALSO THE PROPER PRICE INDICATION.

01 January 2008 21 March 2008 01 August 2008 16 October 2008 16 January 2009 10 April 2009 04 August 2009 30 October 2009 29 January 2010 16 June 2010 13 September 2010 01 December 2010 15 April 2011 5 September 2011 14 November 2011 23 January 2012 02 April 2012 11 June 2012 6 September 2012 21 November 2012 30 January 2013 09 April 2013 24 June 2013 6 September 2013 20 November 2013 31 January 2014 01 April 2014 02 June 2014 18 August 2014 24 October 2014 31 December 2014 06 March 2015 08 May 2015 14 July 2015 09 September 2015 17 November 2015 11 January 2016 10 March 2016 09 May 2016 11 July 2016 12 September 2016 11 November 2016 16 January 2017 09 March 2017 11 May 2017 13 July 2017 11 September 2017 SUNSEED CIF MARMARA/DAP KAPIKULE PRICES ( $/mt ) BY 2008/2017 950 900 850 800 750 700 650 600 550 500 450 400 350 300 250 200 910 $/mt 30 April 2008 265 $/mt, 26 Dec 2008

AS YOU SEE; 2007/2008 SEASON WAS THE PEAK WITH AS HIGHER AS 910 $/MT CIF MARMARA/DAP KAPIKULE BY30 APRIL 2008.

AS YOU SEE; 2008/2009 SEASON WAS THE BOTTOM WITH AS LOWER AS 265 $/MT CIF MARMARA/DAP KAPIKULE BY26 DECEMBER 2008.

2017/2018 NEW-SEASON PROSPECTS

NOW, LET S LOOK AT OUR LATEST 2017/18 SEASON SUNSEED NEW-CROP SIZE FORECASTS BY MAJOR PRODUCERS IN BLACK SEA.

BLACK SEA & GLOBAL SUNSEED PRODUCTION Acreage ( Thd Hectare ) Yield ( Kgs/Decare ) Crop Size ( Thd T ) COUNTRY 2017/18 F 2016/17 2017/18 F 2016/17 2017/18 F 2016/17 Ukraine 6.250 6.350 212 240 13.250 15.250 Russia 7.850 7.750 143 152 11.250 11.750 Romania 1.075 1.025 191 185 2.050 1.900 Bulgaria 850 825 235 218 2.000 1.800 Turkey* 675 585 241 231 1.625 1.350 Moldova 400 400 200 213 800 850 Kazakhistan 800 810 91 93 725 750 BLACK SEA TOTAL 17.900 17.745 177 190 31.700 33.650 Argentina 1.800 1.750 208 197 3.750 3.450 China 1.075 1.075 260 256 2.800 2.750 Hungary 660 650 273 292 1.800 1.900 France 575 550 222 218 1.275 1.200 USA 550 625 150 192 825 1.200 South Afr. Rep. 700 650 118 135 825 875 Spain 625 725 96 100 600 725 Serbia 200 200 275 313 550 625 Others 3.550 3.550 102 102 3.625 3.625 Total 27.635 27.520 173 182 47.750 50.000 * 150-175 kmt of Turkish confectionary and hybrid production are excluded.

IN UKRAINE; IN ADDITION TO SLIGHTLY LOWER ACREAGE ( 6.25 MLN HA VS 6.35 ), UNFAVORABLE SUMMER 2017 WEATHER ONDITIONS DETERIORATED THE YIELD POTENTIALS. THEREFORE, THE NEW-CROP SIZE OF AROUND 13.25 MLN T VS RECORD 15.25 IS MORE LIKELY. HARVESTINGS ARE ALMOST OVER.

IN RUSSIA; ALBEIT SLIGHTLY HIGHER ACREAGE ( 7.85 MLN HA VS 7.75 ), UNFAVORABLE SUMMER 2017 WEATHER CONDITIONS DETERIORATED THE YIELD POTENTIALS. THEREFORE, THE NEW-CROP SIZE OF AROUND 11.25 MLN T VS RECORD 11.75 IS MORE LIKELY. HARVESTINGS ARE JUST HALVED.

IN ROMANIA; IN ADDITION TO PARTLY HIGHER ACREAGE ( 1.075 KHA VS 1.025 ), PARTLY BETTER SUMMER 2017 WEATHER CONDITIONS RECOVERED THE YIELD POTENTIALS. THEREFORE, THE NEW-CROP SIZE OF AROUND 2.05 MLN T VS 1.9 IS MORE LIKELY. HARVESTINGS ARE VIRTUALLY OVER.

IN BULGARIA; IN ADDITION TO SLIGHTLY HIGHER ACREAGE ( 850 KHA VS 825 ), PARTLY BETTER SUMMER 2017 WEATHER CONDITIONS RECOVERED THE YIELD POTENTIALS. THEREFORE, THE NEW-CROP SIZE OF AROUND 2.0 MLN T VS 1.8 IS MORE LIKELY. HARVESTINGS ARE VIRTUALLY OVER.

IN TURKEY; IN ADDITION TO SIGNIFICANTLY HIGHER ACREAGE ( 675 KHA VS 585 ), PARTLY BETTER SUMMER 2017 WEATHER CONDITIONS RECOVERED THE YIELD POTENTIALS. THEREFORE, THE NEW-CROP SIZE OF AROUND RECORD 1.625 KMT VS 1.350 IS MORE LIKELY. HARVESTINGS ARE VIRTUALLY OVER.

IN MOLDOVA; ALBEIT STABLE ACREAGE ( 400 KHA ), UNFAVORABLE SUMMER 2017 WEATHER CONDITIONS DETERIORATED THE YIELD POTENTIALS. THEREFORE, THE NEW-CROP SIZE OF AROUND 800 KMT VS RECORD 850 IS MORE LIKELY. HARVESTINGS ARE VIRTUALLY OVER.

WITH LOWER NEW-CROP SIZES IN UKRAINE & RUSSIA FOREMOST ; 2017/18 SEASON SUNSEED GLOBAL NEW-CROP IS LIKELY AS 47.75 MLN T. VS RECORD 50 MLN T. OF 2016/17.

BLACK SEA & GLOBAL SUNSEED TRADE Exports ( Thd T ) Imports ( Thd T ) COUNTRY 2017/18F 2016/17 COUNTRY 2017/18F 2016/17 Romania 1.350 1.300 Turkey** 575 620 Bulgaria 750 650 Romania 200 225 Moldova 540 600 Bulgaria 100 160 Russia 300 375 Russia 100 100 Ukraine 150 275 Kazakhstan 15 15 Kazakhstan 250 265 Ukraine*** 0 0 Turkey* 0 0 Moldova*** 0 0 BLACK SEA TOTAL 3.340 3.465 BLACK SEA TOTAL 990 1.145 Argentina 100 70 Holland 625 640 China 360 350 France 500 590 Serbia 120 125 Spain 475 390 USA 75 100 Iran 190 180 Hungary 290 310 Uzbekistan 130 120 France 350 310 Pakistan 125 110 Slovakia 185 220 China 100 100 Others 675 685 Others 2.000 2.020 Total 5.495 5.635 Total 5.135 5.295 * Turkey has only confectionary and hybrid seed exports. ** Turkish confectionary and hybrid seed imports are excluded. *** Ukrainian and Moldovian Sunseed imports of hybrid seeds were excluded.

FOLLOWING BETTER NEW-CROP SIZES; ROMANIAN ( 1.35 MLN T VS 1.3 ) AND BULGARIAN ( 0.75 MLN T VS 0.65 ) SUNSEED EXPORTS WILL BE HIGHER IN 2017/18 SEASON.

ALBEIT RECORD NEW-CROP SIZE; TURKISH SUNSEED IMPORTS ( 575 KMT VS 620 ) WILL BE STILL SOLID TO MEET HUGE LOCAL SUNOIL CONSUMPTION IN 2017/18 SEASON.

WITH BLACK SEA & GLOBAL SUNSEED NEW- CROP SUPPLY & DEMAND OUTLOOK; CURRENT SUNSEED PRICES ( AROUND 370 375 $/MT FOB CONSTANTA & 375 385 $/MT CIF MARMARA ) ARE UNDERVALUED AND SHOULD BE IMPROVED SOON.

NEVERTHELESS, WEATHER CONDITIONS IN RUSSIA FOR THE STILL UNHARVESTED SUNSEED FIELDS, WEATHER CONDITIONS IN USA DURING SOY HARVESTINGS, WEATHER CONDITIONS IN SOUTH AMERICA DURING PLANTINGS/GROWINGS/HARVESTINGS, FED INTEREST RATE HIKE TIMELINE, EUR/USD PARITY, PETROL, BREXIT PROCESS, TRUMP UNCERTAINTY AND GLOBAL ECONOMIC/GEOPOLITICAL DEVELOPMENTS ARE THE MAJOR QUESTIONMARKS!!!

PRESENTATION SUMMARY

SUNSEED IS AMIDS THE MOST PRODUCED AND TRADED AGROCOMMODITIES OF THE WORLD. UKRAINE AND RUSSIA ARE 2 GIANTS IN GLOBAL SUNSEED PRODUCTION. ROMANIA AND BULGARIA ARE 2 GIANTS IN GLOBAL SUNSEED EXPORTS. TURKEY IS THE BIGGEST SUNSEED IMPORTER COUNTRY IN BLACK SEA. BLACK SEA, THE HEART OF GLOBAL SUN COMPLEX, WILL SUFFER DUE TO LOWER NEW-CROP SIZES IN UKRAINE AND RUSSIA BY 2017/18 SEASON. GLOBAL SUNSEED NEW-CROP SIZE WILL ALSO DROP TO 47.75 MLN T VS RECORD 50 MLT T IN 2016/17 SEASON. CURRENT SUNSEED PRICES ARE UNDERVALUED WITH LOWER NEW-CROP SIZES AND SHOULD BE IMPROVED SOON. NEVERTHELESS, WEATHER CONDITIONS IN RUSSIA FOR THE STILL UNHARVESTED SUNSEED FIELDS, WEATHER CONDITIONS IN USA DURING SOY HARVESTINGS, WEATHER CONDITIONS IN SOUTH AMERICA DURING PLANTINGS/GROWINGS/HARVESTINGS, FED INTEREST RATE HIKE TIMELINE, EUR/USD PARITY, PETROL, BREXIT PROCESS, TRUMP UNCERTAINTY AND GLOBAL ECONOMIC/GEOPOLITICAL DEVELOPMENTS ARE THE MAJOR QUESTIONMARKS.

Great thanks for your kind attention Multumesc Большое спасибо

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