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Cashews Presentation January 2013 Presented by Amit Khirbat, Olam International Limited

Cashews Presentation January 2013 Presented by Amit Khirbat, Olam International Limited. W 320 Price – Last 10 years. Last 10 years avg : $ 2.60 / lb. Currently trading well above average But we need to keep in mind : Cost of production has gone up Wages have gone up

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Cashews Presentation January 2013 Presented by Amit Khirbat, Olam International Limited

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  1. Cashews Presentation January 2013 Presented by Amit Khirbat, Olam International Limited

  2. W 320 Price – Last 10 years

  3. Last 10 years avg : $ 2.60 / lb • Currently trading well above average • But we need to keep in mind : • Cost of production has gone up • Wages have gone up • Lack of Worker availability • Mechanization – impact…. • Differentials have widened • Shift in major consuming markets : • Emergence of India and China – China buying better quality

  4. W 320 Price – Last 3 years

  5. Last 3 years avg - $ 3.50 / lb • Characterized by extreme volatility :$ 2.75-$ 4.50 • Short crops in many countries • Explosion of demand in India in 2010 • Steep increases and Steep falls • Loss of market share to other nuts (in India/China) – 2011 / 2012. • Lack of promotion of cashews • Change in Tenor of buying – shorter !

  6. Supply Summary - Global

  7. Demand Summary - Global • Price Volatility had an impact on demand in 2nd half 2011 and First half 2012 • Demand has improved at current prices • Steady consumption across EU/ US • India had a very good festive season. • China continues to buy steadily- but focussing now on better quality – impact…. Improved consumption prospects at current levels

  8. 2012 Highlights • Relatively stable prices • 1 spike • Resistance levels : $ 3.20 - $ 3.50 FOB • W320’s trading in narrow range • Differentials between Pieces and Wholes at historical highs • Consumption picked up in the 2nd half of the year • Normal supply but lower quality in some origins Differentials between pieces & wholes

  9. Short Term Outlook • Crops likely to be stable in most regions • Growth seen only in West Africa • Shift of acreage from Cashews to Rubber in Vietnam • Declining Brazil crop • Consumption likely to be better at current prices

  10. Long Term Outlook • Supply Trends • Increased acreage in West Africa • Improved yield in West Africa • Declining or at best steady crops in other geographies. • Cashews will be promoted as ingredients • Differentials between wholes & pieces will narrow down • We will see value added offerings ( pasteurized / tailor made pieces ) • Increased Mechanization • Food Safety and Hygiene • Traceability and sustainability – not just Africa.

  11. Envisioning the Future • Consumer demands on Traceability • Where are they grown ? Who grows them ? Who processes them ? • What is the complete supply chain ? • Consumer demands on Sustainability • Are the farmers taken care of ? Can their livelihoods be improved ? Can yields be improved ? • Can carbon footprint be reduced ? • Crop research – with specific focus on increasing farmer returnin addition to research on health benefits. • Africa – the new cradle of Cashew • Growing crops and growing processing volumes • Significant focus from NGO’s • Value addition at source !

  12. Summary • Rein in the price volatility • Mechanization of the processing industry • Usage of cashews as ingredients • Sustainable and traceable cashew supply chain • & obviously Hygiene and Food safety. Cashew industry is changing … gearing up to meet changing consumer expectations

  13. Questions?

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