Canola: Competing in the

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Canola Competing in the World Food Oil Market
Carl HausmannPresident and CEOBunge North
America
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A Brief History

• 1818 Founded in Amsterdam by Johann Peter Bunge
• 1884 Bunge y Born established in Argentina by
  grandson, Ernest Bunge.

• 1905 Bunge y Born expanded into Brazil.
• 1923 Bunge North American Grain Corporation
  founded in New York City to trade raw
  agricultural commodities.

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Recent History

• 1993 Professional management brought in to focus
  on core businesses
• 1997 Acquisition of Ceval, expansion of
  fertilizer in Brazil
• 2000 Bunge Global Markets
• formed
• 2001 Initial Public Offering
• 2002 Acquisition of Cereol,
• including Central Soya and
• CanAmera Foods

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A Growing Company
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Growth through Acquisition
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Bunge Operating Companies
Decentralized and Integrated

• Bunge Global Markets
• Bunge Europe
• Bunge Argentina
• Bunge Brazil
• Bunge Alimentos
• Bunge Fertilizantes
• Bunge North America

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with superior geographic balance and reach
500 production industrial facilities 25,000
employees
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capturing value though our vertically
integrated chain
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• Bunge is growing
• and changing

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• World Oil markets are also growing and changing

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World Oil Supply Growth
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World Oil Supply Growth
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World Soybean Oil Supply
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World Rapeseed Oil Supply
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Supply Demand Trends

• Europe
• North America

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EU 15 Oil Production
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EU 15 Oil Imports
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EU 15 Oil Exports
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EU 15 Oil Consumption
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EU 15 Supply Demand

• Demand driven by biodiesel
• Demand less impacted by
• Trans fat issue
• GMO
• Supply driven by
• Palm Imports
• Rapeseed Production

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Supply Demand Trends

• Europe
• North America

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Canadian Oil Production
CAGR
2.87
2.46
Sun, Cottonseed, Olive, Groundnut, Corn, Palm,
Coconut, Palm Kernel
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U.S. Oil Production
CAGR
5.97
1.07
(.07)
0.95
Sun, Cottonseed, Olive, Groundnut, Corn, Palm,
Coconut, Palm Kernel
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Mexican Oil Production
CAGR
1.45
Sun, Cottonseed, Olive, Groundnut, Corn, Palm,
Coconut, Palm Kernel
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North American Consumption
CAGR
1.41
1.95
3.59
2.13
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North American S D
North America moves from small surplus position
to an oil deficit of approximately 1.4 mmt.
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North American S D
Supply growing at 1.2 CAGR, demand growing at
2.13 CAGR.
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North American S D
Oil deficit of 1.4 mmt expect to be met by an
increase of palm imports into Mexico based on
price and imports into the U.S. based on trans
mitigation.
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North American S D
No increase in biodiesel production factored in
to supply deficit projection.
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Supply Demand Influencers

• Biodiesel
• Trans Fat Mitigation

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Biodiesel

• Technology
• 5 blends are approved by all European car
  manufacturers
• Has a positive balance on air quality
• Functional use as lubricity enhancement
• Adoption
• EU consumption expected to grow to 4 mmt/yr
• Usage represents less than 2 diesel substitution
• Brazil considering 5 mandate
• U.S. poised to adopt 5-8 billion gallon mandate
  (ethanol, biodiesel, biomass)

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Biodiesel

• Supply
• 1 mmt of crude oil 1 as diesel consumption
  in U.S.
• World demand for veg oil pushing production
• Annual global edible oil production 100 mmt
• Daily global petroleum consumption 10 mmt
• 10 day energy supply?

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Supply Demand Influencers

• Biodiesel
• Trans Fat Mitigation

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Trans Fat/Hydro Oils

• Market
• North America vegetable oil consumption 14 mmt
• Amount of oil hydrogenated 3.5 mmt
• Issues
• Will there be a reduction in hydrogenated oil?
• How big a reduction?
• What oils will substitute for hydrogenated oil?
• Will there be a reduction in veg oil consumption?

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Supply of Trans Alternatives

• High oleic canola
• Estimated production 1.7 million acres in 2005
  (all providers)
• Low linolenic soybean
• 2007 production estimated at 1.3 billion pounds
  (all providers)

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Canolas Role

• Trend favors canola
• Healthy Oil Attributes
• Oil Content
• Growth Opportunity
• Global Markets
• North American Demand

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Summary

• North American oil markets are becoming a big
  niche market
• South American soy and palm are becoming the
  principal internationally traded oils to China,
  India, Pakistan, Iran, etc.
• More canola and soy available in North America
  for processing market sends pricing signal to add
  crush
• What will be the competitive response?

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Summary

• Biodiesel and Trans are outside forces that will
  impact North American oil markets
• Do you know the outcome?
• Specialty oils through genetic modification is
  current trend to address health issues
• What is the impact on commodity oils?

Our ability to understand consumer trends will be
key
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