OPPORTUNITIES FOR AUSTRALIAN AGRIBUSINESS By John Murray

Managing Director Emerald Grain

OCTOBER 2014

FEEDING ASIA

@MDJohnMurray

• Setting the scene : Asian demand, vs Australian

production capability in grain.

• Challenges at home: Creating a more efficient grain

supply chain.

• Playing to our strengths: How can Australia

differentiate itself from international competitors?

• Conclusion: What will Australian agribusiness look

like in 20 years?

OPPORTUNITIES… AND

CHALLENGES

We are not the food bowl of Asia But there’s plenty of opportunity…

Asian demand - wheat

152%

83% 53%

23%

THAILAND

VIETNAM

INDONESIA

PHILIPPINES

Increase in ten year average imports 2004 – 2013 vs 1994- 2003

Source: USDA Import Data

Asian demand – wheat (1000mt)

China – the “wild card”

Source: USDA Import Data

Our market share into Asia – Wheat (Based on 2012/13 USDA figures)

Australian grain production 1960-now Can we keep up the pace?

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Wheat Production (1000 MT)

Sorghum Production (1000 MT)

Oil, Rapeseed Production (1000 MT)

Barley Production (1000 MT)

GLOBAL “GRAIN BOWLS”

Supply chain efficiencies: from the farm gate to the end user

WHAT DOES IT COST TO GET GRAIN OUT OF THE COUNTRY?

RAIL IMPROVEMENTS WILL INCREASE OUR COMPETITIVENESS

• By 2015, Australian terminals will

have around 50 million tonnes of annual grain export capacity

• Six-year average annual exports is around 24 million tonnes.

• Yet around 80% of our grain exports occur from December – July.

THE PUSH FOR PORTS

Forfeit slot =

$2 million

loss

Compete for

grain = up to

$2 million

loss

DECISION

Forfeit slot, or pay over

market for grain?

HARVEST

Intense competition

for grain to fill slots

OCTOBER

Some production fails.

VaR = $2 million

MAY

Stem Auction

$40/tonne premium

Brand Australia: How do we stand out in a crowded Asian marketplace?

EMERALD GRAIN – AN OVERVIEW

WE ARE NOT UNIQUE Ukraine wheat exports – 1994 - 2014

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VALUE-ADDING: not an option

BUT WE ARE A TRUSTED SOURCE WHEN IT COMES TO FOOD….

NICHE AND HIGH-VALUE MARKETS

There’s ample opportunity

But we have a way to go…

Lower costs, increase efficiency

Define our brand

Target high-value opportunities

QUESTIONS