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Corn starch market drives up corn sourcing

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Table of Contents (1/2)

01Executive Summary

• Supply/Demand and Prices• Global Corn Market• Contract Structures by Industry and Price

Benchmarking• Cost Savings, Based on Contract Structures

02Market Analysis

• Value Chain Analysis• Global Market Outlook– Global Supply–Demand Analysis– Global Demand Analysis– Global Corn Trade Dynamics – Global Corn Starch Supply–Demand

Analysis– Cost Structures

• Regional Market Outlook (US, Brazil, and China)– Supply–Demand Analysis– Trade Dynamics– Pricing Analysis

03Industry Analysis

• Industry Outlook (US, Europe, and Asia)– Porter’s Five Forces Analysis – Innovations

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Table of Contents (2/2)

04Corn Processing Industry Analysis

• Global Corn Starch and Derivatives Supplier Market Share

• Profiling of Major Suppliers– ADM– Cargill Inc.– Ingredion Inc.– Tate & Lyle– Roquette Freres– Tereos Syral

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Executive Summary

GLOBAL SUPPLY (2016/2017) 1365.77 MMTGLOBAL CONSUMPTION (2016/2017) 1007.71 MMTGLOBAL ENDING STOCKS (2016/2017) 220.81 MMT

KEY PRODUCINGCOUNTRIESUS (37.4%)China (21.2%)Brazil (7.8%)

KEY EXPORTINGCOUNTRIESUS (39.6%)Argentina (17.5%)Brazil (15.6%)Ukraine (12.9%)Russia (3.4%)

KEY MARKET DRIVERS20.2 percent rise in global feed demand2–5 percent rise in demand from the corn processing sectorBio-fuel demand

KEY CONSUMINGCOUNTRIESUS (31.1%)China (22.4%)Brazil (5.8%)Mexico (3.7%)

KEY IMPORTINGCOUNTRIESJapan (11.7%)Mexico (10.1%)EU (8.6%)South Korea (7.8%)Egypt (6.8%)

Surplus Stocks (2016/2017 vs. past five years average)• Global: 29.2% • US: 85.9% • China: 23.6% • Brazil: (-26.7%)

EMERGING SUPPLY COUNTRIES (2010 vs. 2015 Export Shares)Ukraine – 7 percent increase

TRADE TARIFFSUS – Japan (0 percent export duty/16 percent import duty)Brazil – Vietnam (0 percent export duty/13 percent import duty)Brazil – Iran (0 percent export duty/20.6 percent import duty)

Weather Impact (2016/2017)US: Favorable | China: Favorable | Brazil: Unfavorable (dry)

Sources: UN Comtrade, USDA, Beroe Analysis, Government Websites

BENCHMARK PRICE INDICESCBOT | MATIF Euronext

COST DRIVERSCost of Crop Protectors in Brazil: 35 percent Cost of Labor and Land in the US: 4–5 percent

ENGAGEMENT MODELSContract Length: 1–3 Months Contract Type: CBOT Based + Basis Best Price-lock Months: May–July

PRICES IN KEY REGIONS and OUTLOOK for 2016/2017US: 3.28 $/Bu China: 1680 ¥/MT Brazil: 226.7 $/MT

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Executive Summary

01 US (2015/2016 vs. 2016/2017)

02 Brazil (2015/2016 vs. 2016/2017)

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KeyTakeaway

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03 China (2015/2016 vs. 2016/2017)

Production – (-2.7%) Consumption – 3.9% Price – (-8.3%)

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Sources: Government website, USDA, Beroe Analysis

Production – 11.4% Consumption – 4.8% Price – (-16.4%)

Production – 16.8% Consumption – 3.6% Price – 14%

• The global supply of corn has been rising at a CAGR of 4.28 percent over five years. Production in 2016–2017 is expected to reach 1028.4 MMT

• The key factors driving the growth include consecutive record production in the US and China and demand from end-use segments, such as feed and corn starch processing industries

• With respect to corn processing end uses, the global sorbitol market is set to rise by a CAGR of 3.6 percent, while the corn starch market could rise by a CAGR of 4.8 percent in the coming years. This is driving the increase in corn demand for the US and China

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