Australian Crop Outlook & Trade Flows. Ron Storey Head, NZX Agribusiness Australia March 2015

Transcription

1 Australian Crop Outlook & Trade Flows Ron Storey Head, NZX Agribusiness Australia March Copyright NZX Ltd. 2014

2 AGENDA 1. Key Crop and Trade Metrics 2. Australian Export Infrastructure 3. The Quality Question 4. Industry Organisation Architecture /15 Balance Sheet 6. FOB Transparency 2

3 Who is NZX Australia? Capital Markets Funds Management Agri Information Soft Commodities Market Operations 3 7 August 2013

4 1. KEY CROP & TRADE METRICS PRODUCTION PRICE EXPORTS EXPORTER MARKET SHARE A LOT OF CHARTS LOOK FOR THE IMAGERY! 4

5 Australian Grain Production by Commodity (Mmt) 5 Good Years!! Canola Barley Wheat Source: Australian Crop Forecasters 5

6 Australian Pulse Production to Australian Pulse Produc0on by Crop / / / / /15 Faba Beans Len>ls Chickpeas Field Peas Lupins 6

7 BETTER YIELDS DESPITE < AVERAGE RAINFALL 200 Queensland (weighted by produc1on region) 150 Rarely above the red line! Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Ave 7

8 BETTER YIELDS DESPITE < AVERAGE RAINFALL 200 New South Wales (weighted by produc1on region) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Ave 8

9 BETTER YIELDS DESPITE < AVERAGE RAINFALL 150 Victoria (weighted by produc1on region) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Ave 9

10 BETTER YIELDS DESPITE < AVERAGE RAINFALL 100 South Australia (weighted by produc1on region) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Ave 10

11 BETTER YIELDS DESPITE < AVERAGE RAINFALL 100 Western Australia (weighted by produc1on region) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Yr Ave 11

12 MORE WITH LESS Rainfall rarely above 10-year average, yet crops have been large (Wheat 20+MMT) 10 years ago, the crop would have been well below 20 MMT >> Australian farmers, through best practice and new technology, are producing more with less 12

13 PRICE? - AT US$5/BUSHEL, Australian Farmers will grow wheat.just! PRICE? - AT US$5/BUSHEL, Australian Farmers will grow wheat.just! ETHANOL 2015 $5/bu 2006 $3/bu Source: Thomson Reuters Eikon

14 In A$/t Last 6 Months UP 20%!!! A$/t Last 6 Months UP 20%!!! AUD +20% Source: Thomson Reuters Eikon 14

15 Australian Market Share - World Wheat ( ) Asian Focus Source: Australian Crop Forecasters 15

16 Australian Exports Wheat / Barley / Canola / Sorghum ( ) Source: Australian Crop Forecasters 16

17 WHEAT BY REGION to ytd Nth Asia M-East Africa SE Asia NZPac Other 17

18 BARLEY BY REGION to ytd China?? 18

19 CANOLA BY REGION to ytd 19

20 SORGHUM BY REGION to ytd 20

21 EXPORTER MARKET SHARE WHEAT Big 5 ++ Emerald CBH 12/13 13/14 Graincorp Cargill Other Glencore Plumgrove 14/15 YTD 21

22 EXPORTER MARKET SHARE BARLEY Big 5 ++ Cargill CBH Graincorp ADM 12/13 13/14 Glencore Other Bunge 14/15 YTD 22

23 EXPORTER MARKET SHARE CANOLA Big 4 ++ Graincorp Emerald CBH 12/13 13/14 Cargill ADM Glencore 14/15 YTD 23

24 EXPORTER MARKET SHARE SORGHUM Pentag +3 Cargill Graincorp 12/13 13/14 Glencore Pentag 14/15 YTD 24

25 YTD Glencore CBH CBH FULL CBH EXPORTER PROFILE Glencore Glencore Cargill Cargill Cargill Graincorp Graincorp Graincorp Emerald/Sumitomo Emerald/Sumitomo Plumgrove 25 Olam Vitol Emerald/Sumitomo ADM Bunge Mitsui Mitsui ADM ADM Bunge Mitsui Vitol Plumgrove Plumgrove Noble L-Dreyfus Mitsubishi - Riverina Bunge Noble Noble Quadra Mitsubishi - Riverina Quadra CHS Pentag Pentag Mitsubishi-Riverina Gavilon Aust Grain Exports Centre State Exp L-Dreyfus Pentag CHS Agrex 70-80%

26 1. KEY CROP & TRADE METRICS - SUMMARY PRODUCTION PRICE EXPORTS EXPORTER MARKET SHARE More with less Droughts less catastrophic Production Upside? At US$5/bu and A$0.75 just! Strong Asian focus Responsive to demand Big 4-5, but VERY competitive Containers SUPER competitive! 26

27 2. Australian Export Infrastructure PORTS SHIPPING PACE SOURCE STATES BULK/CONTAINERS 27

28 Grain Port Infrastructure

29 Grain Port Infrastructure 2016 Pre HLJ Quattro Cargill Bunge

30 WHEAT EXPORTS 2012/13, 2013/14, 2014/15 YTD 30

31 BARLEY EXPORTS 2012/13, 2013/14, 2014/15 YTD 31

32 CANOLA EXPORTS 2012/13, 2013/14, 2014/15 YTD 32

33 SORGHUM EXPORTS 2012/13, 2013/14, 2014/15 YTD 33

34 HOW VARIABLE IS THE SOURCE PORT FOR EACH CUSTOMER? 34

35 VIETNAM SOURCE STATES 12/13 & 13/14

36 CHINA SOURCE STATES 12/13 & 13/14

37 JAPAN SOURCE STATES - 12/13 & 13/14

38 REPUBLIC OF KOREA SOURCE STATES 12/13 & 13/14

39 BULK vs CONTAINERS South-East Asia Indonesia Malaysia Philippines Vietnam Thailand Singapore 39

40 BULK vs CONTAINERS North Asia China Taiwan Japan Sth Korea 40

41 2. Australian Export Infrastructure - Summary PORTS SHIPPING PACE SOURCE STATES BULK vs CONTAINERS - Aust has added capacity - More capacity to come - Front end shipping program - Supplied by multi traders and multi ports - Wide diversity - Lower bulk freight (Oil?) These factors driving a natural question about quality consistency 41

42 3. The Quality T-E-N-S-I-O-N? Price vs Consistency COMMODITISED >>> CUSTOMISED Optional Origin >>> Origin specific Any Load Port >>> Port/Quality specific Grain Specs >>> Flour specs No Carryover >>> Supply continuity Basic service >>> Technical service Low loyalty >>> Relationship based Price Dominant >>> Price & Service Exporters are responding to buyer behaviour so there is a natural T-E-N-S-I-O-N between price and quality consistency. The solution is communication between Australia and its customers.agic ASIA 2014 & 2015 are steps along that journey 42

43 4. Industry Organisational Architecture Industry Feature /16 S/Chain Assets 4 x Terminal owners 8 x Terminal owners - New Assets - Foreign owners - Rail owners Exporters AWB - solo Big 5-6, + further 20 Super competitive Industry Infrastructure -Contracts/Standards -Research & Devt -Market Access, AQIS -Wheat Classification -Industry Promo/Info -Quality Development AWB GRDC AWB-Govt AWB AWB AWB >> GTA >> GRDC >> GIMAF-Govt >> WQA-WCC >> AGIC Asia ??? 43

44 /15 BALANCE SHEET Wht Bly Can Sor CARRY-IN PRODUCTION TOTAL SUPPLY DOM USAGE EXPORTS CARRY-OUT MESSAGE: - East coast Australia remains tight - Sorghum export demand strong - Barley exports strong

45 6. FOB PRICE TRANSPARENCY - NEW SERVICE!! Profarmer collects daily track price bids on all grains at every port Converts them to FOB USD flat price and USc/bu BASIS For indicative replacement cost, every grade, every port For comparison with FOB exporter/broker quotes Sample 45

46 Australian FOB replacement APW Wheat - USD FLAT PRICE US$/mt Kwinana Pt Adel Spread? Sep Oct Nov Dec Jan Feb Mar Kwinana Port Adelaide Geelong 46

47 Australian FOB replacement APW Wheat - BASIS USc/bu USc/bu 300 Kwinana Basis over Chicago? Sep Oct Nov Dec Jan Feb Mar Kwinana Port Adelaide Geelong 47

48 SUMMARY 1. Key Metrics Future is in Asia 2. Export Infrastructure Rapidly changing to meet demand 3.The Quality Question Natural tension requires communication (AGIC Asia) 4. Industry Architecture Evolving well want to engage on Quality Devt (long term) /15 Balance Sheet Remains tight front end 6. FOB Transparency New Profarmer service 48

49 Thank you Questions? 49