Download - India Maize Summit New Delhi 20 th March 2014

© Noble Group, 2010 All rights reserved. Noble Group Proprietary Information – Internal Use Only – Not to be disclosed outside Noble Group

India Maize SummitNew Delhi

20th March 2014


A Little about Noble +Global Corn Trade

and its likely impact on India

By Major Rajiv Yadav


3

September 2013

What do we do? Founded in 1987

Operates from over 140 locations and 35 countries

Three Business divisions (percentage of revenue)

▶ Energy (68%)

▶ Agriculture (16%)

▶ Metals, Minerals and Ores (16%)

Owns assets and participates along the supply chain

Focuses on low cost sourcing to high growth markets

Noble is listed in Singapore , with headquarters in Hong Kong.

We are ranked number 76 in the 2013 Fortune 500


4

September 2013

Size & Growth Strong growth in all divisions Revenue was USD 94b in 2012 Tonnage has increased nearly 60 per cent to 224 million tonnes

per annum in the last five years

Total Revenue(US$ billion)

* Our Former Logistics segment results are, from Q1 2011, consolidated into the Physical commodity divisions, reflecting the nature of our business we provide logistic/chartering services to support the underlying physical commodity segments.

2007 2008 2009 2010 2011 20120

20000

40000

60000

80000

100000

Logistics *MMOEnergyAgri


5

September 2013

Agri business Focus on Grains, Oilseeds, Sugar, Cotton, Coffee and Cocoa The Agri business unit traded over 44 metric tonnes in 2012 –

almost triple the flow in 2006

Assets New oilseed crushing facilities in Brazil, Argentina, Ukraine

and South Africa, together with the existing four plants in China, produce a global throughput of 10 million tonnes per year

Cluster of strategically located port facilities in Argentina and Brazil

A complex of four state-of-the-art sugar and ethanol mills in Brazil

A 1400 tns per day edible oil refinery at Kandla(India)


6

September 2013

INDEXProduction estimates – 2013/14SND Snapshot

India

ExportsGrowthDestination markets

Price behaviorWorld Corn Yields Vs Indian Corn YieldsFuture challenges


India Maize ProductionIndia Kharif Maize production

2010/11 2011/12 2012/13 2013/14 e

Uttar Pradesh 1336 1226 1030 1149

Rajasthan 1683 1697 1575 1494

Madhya Pradesh 1107 1222 1264 1311

Maharashtra 1650 1633 1663 2049

Karnataka 3680 4085 2996 3490

Andhra Pradesh 1634 1956 2219 2257

India 15777 16490 15264 16390

India Rabi Maize production

2010/11 2011/12 2012/13 2013/14 e

Bihar 836 903 953 1110

Andhra Pradesh 2220 2191 2671 2412

Tamil Nadu 879 1012 960 946

India 5202 5269 5570 5430


SND Snapshot - India

Units: LT 2010/11 2011/12 2012/13 2013/14 e

Carry-in 5.3 24.8 12.9 3.9

Production 217.3 202.0 208.3 218.2

Imports 0.2 0.0 0.0 0.0

Supply 222.8 226.9 221.3 222.1

Food, Seed and Industrial Use 58.5 58.4 56.8 57.3

Feed Use 105.6 108.9 112.6 117.9

Domestic demand 164.2 167.3 169.5 175.2

Exports 33.8 46.6 47.9 31.8

Ending stocks 24.8 12.9 3.9 15.1


Current Scenario – Indian Corn• Increase in Kharif crop production by almost 1.1 MMT vs. last year

(Maharashtra and Karnataka).

• Non-competitive Indian corn prices vs. other origins kept Indian corn exports

miniscule in first quarter, however with Ukraine crisis (and thus steep rise in

world corn prices), Indian corn could find its way into export market.

• Ending stocks to revive from last year exceptionally low levels with higher

output + limited exports in Q1.

• Alternate usages of corn increasing in starch/distillery/biofuel.

• Poultry growth has been stagnant……

• Still catching up with last year export volumes look unachievable till

now….unless something major change happens across globe.


Exports – Sudden growth after slow start

0

100

200

300

400

500

600

700

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

India corn exports (KMT)

2013-14 2011-12 2012-13

Big export program with Ukraine crsis

No surprise if we catch up with last year export volumes.


India Corn FOB prices(Jan-Mar)

210

220

230

240

250India Corn FOB price ($/ton)


Destination markets

Indonesia , 1597, 33%

Vietnam , 1148, 24%

Malaysia , 958, 20%

Taiwan , 317, 7%

others, 767, 16%

Major destination markets for Indian corn (2012/13)

SEA is the traditional market for Indian corn.

Advantages for buyers :

1) Shorter voyage period.2) Buyers can monitor quality

at load port.3) Px advantage to SA Corn.


CNF Px Comparison

Prices (April /May shipment)

CNF SEA(Apr) CNF SEA(May)

USG 285 287

PNW 282 280

Argentina 274 278

Brazil 270 274

Ukraine 279 278

India 272 270

We are still competitive in prices at destination markets.


Price behavior – Indian market vs. CBOT

150

160

170180190

200

210

220230240

Corn prices NCDEX vs. CBOT ($/ton)

NCDEX CBOT

1150

1200

1250

1300

1350

1400

1450

Corn prices NCDEX (INR/qtl)

400

420

440

460

480

500

Corn prices CBOT (cents/bu)

Ukraine crisis

Reducing price spread between NDCEX – CBOT is opening ways for Indian corn in export market


Corn Yield/Production Comparison – Major Growing Countries

*Source: USDA


Future Challenges• STAGNATING PRODUCTION

• GMO still not allowed• Competing crops• Global warming leading to inconsistent weather.

• LACK OF QUALITY CONSISTENCY• High on aflatoxin & mycotoxins• Not deemed fit for human consumption in developed nations.• Lack of mechanization for harvesting

• LOGISTICAL ISSUES • Higher wastages during transit• Rail/road transport always a limiting factor for speedy movement• Frequent Port Congestions

• LACK OF QUALITY WAREHOUSING• Inadequate and poor quality warehousing facilities.• Long term storage always remains a concern.


Factors to watched in near future ?• BLACK SEA CRISIS

• Impact of US/Europe sanctions on Russia.• Logistics constraints emerging out • No other substitute to globally cheapest feed wheat & corn

• US DRY WEATHER CONCERNS• Beginning has not been great .• More clarity to come in April.

• FALL OUT OF INDIAN ELECTIONS• Rupee will strengthen in case new Government comes with clear

majority.• Strong dollar could make exports all the more difficult.

• LIKELY DELAYED MONSOON THIS YEAR.• Good for Bihar corn exports.• Next year crop sowing could have adverse impact.


Thank You

Download - India Maize Summit New Delhi 20 th March 2014

Top Related