27 October 2017

WHEAT FORUM

Nico Hawkins

General Manager

(National & International) – Marketing season

Wheat Supply & Demand

Marketing year

Estimate

2016/17

Projection

2017/18

'Mil ton 'Mil ton

Opening stocks 827.2 357.9 223.6 241.7

Production 1 870.4 1 684.7 754.1 747.6

Imports 933.7 1 800.0 175.7 174.0

Total use 3 190.6 (a) 3 177.5 (a) 736.0 741.5

Exports 104.4 72.0 175.7 174.0

Closing stocks 342.6 (b) 590.1 (b) 241.7 247.8

(a) All stocks, regardless ow nership thereof, in commercial structures

(b) Including producer w ithdraw als, seed and end users (SAGIS: 27 259 t, NAMC: 27 400 t)

Source: SAGIS - 25 Oct 2017

Source: GMR - 29 Sep 2017

International (GMR)

2016/17

'000t

Projection

2017/18

'000t

Source: NAMC: S&DEC - 3 Oct '17

SAGIS NAMC

Oct - Sep Jul - Jun

Crop Estimate vs. Producer Deliveries

Wheat Production, Retention & Deliveries

2017/18 * 2016/17 2015/16

Ton Ton Ton

CEC Production 1 716 650 1 910 000 1 440 000

Less Retentions 32 000 35 000 33 900

Total available 1 684 650 1 875 000 1 406 100

SAGIS Deliveries 14 379 1 870 395 1 406 752

Difference 1 670 271 4 605 -652

* 2017/18 - 1 Oct - 20 Oct '17

Source: Sagis and CEC

Wheat: CEC Estimate, Yield, Ha & SAGIS Deliveries

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

0

250 000

500 000

750 000

1 000 000

1 250 000

1 500 000

1 750 000

2 000 000

2 250 000

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18Prog.

17/18Proj.

WHEAT: CEC ESTIMATE vs. SAGIS DELIVERIES

CEC (Crop Est.) Prod deliveries (SAGIS) CEC (Ha) CEC (Yield) S&DEC

Ton Yield

1437

9

Wheat Imports & Exports (Raw material)

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18Prog.

17/18Proj.

WHEAT (RAW MATERIAL) : IMPORTS & EXPORTS

Imports Exports S&DEC

Ton

1 40

5

Wheat Imports: Major origin of imports for RSA (2016/17: 1 Oct ‘16 – 30 Sep ‘17)

Czech Rep.144 24615.46%

Germany237 46425.44%

Poland76 9058.24%

Russia

182 96119.60%

Other

118 50512.70%

Romania

112 27712.03%

USA60 9416.53%

RSA: Wheat Imports per Country- 2016/17-

Total: 933 299 t

Wheat Imports for Other Countries

Russia71 63632.57%

Germany

56 80525.83%

Czech Rep31 40514.28%

Poland14 0096.37%

Canada12 9175.87%

Romania11 2315.11%

Other21 9169.97%

Wheat Imports for other countries- 2016/17-

Total: 219 919 t

(2016/17: 1 Oct ‘16 – 30 Sep ‘17)

Wheat Weekly Imports per Harbour (2016/17: 1 Oct ‘16 – 30 Sep ‘17)

Cape Town

3 8500.33%

Durban1 054 482

91.44%

East London55 1624.78%

Port Elizabeth39 7243.44%

Wheat Weekly Imports per Harbour

Total Imports per Harbour: 1 153 218

Wheat Imports & Exports: Per Harbour

(2016/17: 1 Oct ‘16 – 30 Sep ‘17)

Wheat

Total Imports (RSA + Other) 1 153 218 t 2 367 620 t

Number of Ships 40 74

Number of Countries 11 9

Number of Ports offloaded 4 5

Harbour facilities visited 126 199

Average per ship 28 851 t 11 898 t

Largest ship Flag Gangos - Romania 52 997 t JS Narmada - Russia 54 231 t

Smallest ship Kingsrest - USA 2 000 t Holding Stack - Russia 773 t

Bussiest month February '17 20 October '15 28

Oct '16 - Sep '17 Oct '15 - Sep '16

Wheat Exports: Major export destinations (2016/17: 1 Oct ‘16 – 30 Sep ‘17)

Botswana19 16820.63%

Lesotho18 32619.73%

Zambia

15 31216.48%

Zimbabwe

25 20427.13%

Namibia9 362

10.08% Other5 5215.94%

Wheat Exports per country- 2016/17 -

Total exports: 92 893 t

Wheat Imports & Exports: Weekly current season 2017/18 (Progr. 1 Oct ‘17 – 20 Oct ‘17)

Romania32 84413.24%

Russia147 58859.48%

Ukraine44 84518.07%

USA

22 8719.22%

RSA: Wheat Imports per Country- 2017/18-

Total: 248 148 t

2017/18 Exports

1 Oct - 13 Oct '17 1 405

Wheat: Consumption

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

WHEAT: PROCESSED

Human consumption Animal feed S&DEC

Ton

17/18Proj.

Wheat: Stocks

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

WHEAT: OPENING & ENDING STOCKS

Opening stock Ending stock S&DEC

Ton

17/18

Proj.

Wheat: 2017/18 Marketing year (Progr. 1 Oct – 20 Oct ‘17)

1 716 650

14 379248 148

1 4050

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2 000 000

WHEAT: 2017/18 MARKETING YEAR (1 Oct - 13 Oct '17)

CEC Prod. Deliveries Imports Processed Exports

TonTon

940 0001 875 000 3 152 400 104 500S&DEC

Price movement

Wheat: Prices SAFEX nearby contract

3600

3700

3800

3900

4000

4100

4200

4300

2017

/04/

03

2017

/04/

16

2017

/04/

29

2017

/05/

12

2017

/05/

25

2017

/06/

07

2017

/06/

20

2017

/07/

03

2017

/07/

16

2017

/07/

29

2017

/08/

11

2017

/08/

24

2017

/09/

06

2017

/09/

19

2017

/10/

02

2017

/10/

15

SAFEX Wheat Prices- Future prices (Dec 2017) -R/ton

Wheat: Price movements Comparison SAFEX (Dec and Mar contracts)

2017/10/17 2017/09/18 2016/10/17

Dec 2017 4150.00 4.77 3961.00 0.29 4138.00

Mar 2018 4229.00 4.29 4055.00 0.59 4204.00

Source: SAFEX (a) Contract: Dec 2015

Price Price Price (a)

% Month

on Month

% Year

on Year

Wheat: Price movements Comparison KCBT (Dec and Mar contracts)

2017/10/17 2017/09/18 2016/10/17

Dec 2017 159.17 -2.04 162.48 2.65 155.06

Mar 2018 165.79 -1.83 168.87 2.78 161.30

Source: KCBT

Price Price Price

% Month

on Month

% Year

on Year

Wheat: Price movements Indicative Import parity prices

US US Argentine EU Germany

HRW DNS Trigo Pan B quality

$/t $/t $/t $/t

FOB value 212.00 276.00 182.00 199.00

Freight rates 40.00 40.00 30.00 24.00

Insurance (0.3% of FOB) 0.64 0.83 0.55 0.60

COST, INSURANCE & FREIGHT (CIF) $/t 252.64 316.83 212.55 223.60

Converted to R/t

R/$ Exchange rate on: 2017/10/17 13.3224 13.3224 13.3224 13.3224

R/t R/t R/t R/t

COST, INSURANCE & FREIGHT (CIF) 3365.77 4220.94 2831.68 2978.89

Financing cost 28.36 35.56 23.86 25.10

COST, INSURANCE, FREIGHT & FINANCING 3394.13 4256.50 2855.54 3003.99

Discharging cost

Durban (Mainly spout method) 189.30 189.30 189.30 189.30

Import tariff on Wheat 752.40 752.40 752.40 752.40

FREE ON RAIL (FOR)

Durban harbour 4335.83 5198.20 3797.24 3945.69

Railage cost Durban to Randfontein 460.20 460.20 460.20 460.20

Delivered Durban to Randfontein 4796.03 5658.40 4257.44 4405.89

Delivered Durban to Randfontein: 2016/10/18 5081.26 5848.06 4868.46 4896.78

SAFEX spot price (2017/10/17) 4165.00 4165.00 4165.00 4165.00

2017/10/17

Wheat: Price movements Indicative Export parity prices

US HRW US DNS 14%

Wheat Wheat

Gulf PNW

Nov '17 Nov '17

$/t $/t

FOB Gulf value 212.00 276.00

SA fob price 212.00 276.00

Exchange rate (1$=): (2017/10/17) 13.3224 13.3224

R/t R/t

FOB Gulf value 2824.35 3676.98

Marketing costs:

Financing (Prime rate 10.25% - 30 days) 23.79 30.98

Railage:

Randfontein – Durban harbour 460.20 460.20

Loading costs:

Durban Harbour (Mainly spout method) 182.97 182.97

Export realisation

Randfontein 2157.39 3002.83

Randfontein (2016/10/20) 2332.11 3083.55

SAFEX spot price (2017/10/17) 4165.00 4165.00

2017/10/19

Wheat: Price movements SARS FOB prices Previous years : Oct – Sep

2014/15 2015/16

2016/17

Progr.

Oct-Aug

ImportsQuantity

(Ton)2 054 211 1 947 931 977 076

Total value of

imports

FOB

value

(R'000)

5 590 501.05 5 495 916.70 2 494 623.24

Value per tonFOB

R/Ton2 721.48 2 821.41 2 553.15

Source: SARS

Wheat - Other

1001.99

(2016/17: Progr. 1 Oct ‘16 – 31 Aug ‘17)

Wheat Imports: SARS FOB prices per country:

Wheat Other: 1001.99

(2016/17: Progr. 1 Oct ‘16 – 31 Aug ‘17)

Country TonFOB value

R'000

FOB

Rand/ton

Argentina 42 495.076 99 280.27 2 336.28

Botswana 109.290 110.46 1 010.71

Canada 40 451.712 119 791.34 2 961.34

Czech Republic 172 339.368 444 356.10 2 578.38

France 0.200 0.46 2 300.00

Germany 297 235.149 757 316.41 2 547.87

Mozambique 416.250 774.03 1 859.53

Nigeria 1.166 3.59 3 078.90

Poland 91 321.410 252 520.63 2 765.19

Romania 70 650.965 177 059.72 2 506.12

Russian Federation 229 855.498 561 866.53 2 444.43

Swaziland 0.008 0.08 10 000.00

United States 32 200.261 81 543.33 2 532.38

Unknown 0.014 0.29 20 714.29

Total 977 076.367 2 494 623.240 2 553.15

Progr. Oct '16 - Aug '17

Source: SARS

Wheat Exports: SARS FOB prices per country:

Wheat Other: 1001.99

(2016/17: Progr. 1 Oct ‘16 – 31 Aug ‘17)

Country TonFOB value

R'000

FOB

Rand/ton

Botswana 23 852.414 97 224.58 4 076.09

Canada 338.000 3 234.92 9 570.77

Lesotho 11 892.446 54 065.84 4 546.23

Malawi 19.100 141.60 7 413.61

Maldives 0.010 5.31 531 000.00

Mozambique 3.768 28.10 7 457.54

Namibia 6 868.230 29 423.24 4 283.96

Swaziland 2 056.186 8 568.43 4 167.15

United Kingdom 0.054 0.13 2 407.41

Unknown 140.510 616.98 4 391.00

Zambia 4 056.990 23 245.92 5 729.84

Zimbabwe 18 662.930 94 919.75 5 086.00

Total 67 890.638 311 474.800 4 587.89

Progr. Oct '16 - Aug '17

Source: SARS

Products

Wheaten Products: Per Capita Consumption (12 months: Sep ‘16 – Aug ’17)

Per capita consumptionMaize

products

Wheat

productsPanbaked

bread

Manufactured 4 987 141 3 174 411 2 067 331 401

+ Imports 8 532 282

- Exports -74 406 -7 481

Total "consumed" 3 381 511 3 167 212

Total population 55 909 000 55 909 000 55 909 000

Per capita consumption (Kg/Units) 60.48 56.65 36.98

12 months (1 Sep '16 - 31 Aug '17)

Wheat Products (Manufactured, Imported & Exported)

Manufactured Imported Exported Manufactured Imported Exported

Cake Flour 75 782 0 136 787 007 0 1 559 27.1

Self-Raising Flour 1 664 0 4 15 959 0 25 0.5

White Bread Flour 93 616 0 203 994 019 0 1 665 34.2

Brown Bread Flour 37 379 0 306 391 055 0 3 421 13.5

Other Flour (Industrial) 15 308 0 8 131 548 0 80 4.5

Whole Wheat Meal 212 0 0 2 627 0 0 0.1

Bran 54 810 0 4 564 470 227 223 19.4

Semolina 2 578 0 0 16 803 0 0 0.6

Total 281 349 0 661 2 903 488 227 6 973 100.0

Whole Wheat Milled 281 636 2 900 502 Whole wheat milled =

Processed for human consumption

Diffs milled and products 287 -2 986 Processed for gristing

Product exports

% Bran 19 19

Wheaten Products

Tons

Oct '16 - Aug '17 (11 months)

% of Total

ManufacturedTons

August 2017

(2016/17: Progr. 1 Oct ‘16 – 31 Aug ’17 – 11 months)

Wheaten Products : Bread Flour (Ton)

White994 01965.43%

Brown391 05525.74%

Whole wheat2 6270.17%

Other Flour (Industrial)

131 5488.66%

Bread Flour-Oct '16 ~ Aug '17-

- Ton -

Total: Bread Flour: 1 519 249 ton

(Progr. Oct‘16 – Aug ’17 : 11 months)

Wheaten Products: Pan baked bread (Units)

Aug 2017

Progressive:

Oct '16 - Aug

'17

Units Units

WHITE BREAD

400g 214 834 2 562 910 0.1

600g 15 794 957 174 528 216 9.0

700g 68 174 923 760 963 466 39.3

Other 447 018 7 351 364 0.4

White Bread (Total Units) 84 631 732 945 405 956 48.9

BROWN BREAD

400g 78 816 1 045 520 0.1

600g 18 506 525 215 742 135 11.2

700g 64 827 957 723 367 376 37.4

Other 1 369 354 16 331 944 0.8

Brown Bread (Total Units) 84 782 652 956 486 975 49.4

WHOLE WHEAT

400g 976 13 951 0.0

600g 48 357 555 769 0.0

700g 500 973 7 079 639 0.4

Other 1 866 278 21 279 853 1.1

Whole Wheat (Total Units) 2 416 584 28 929 212 1.5

OTHER

400g 5 077 53 948 0.0

600g 41 494 429 900 0.0

700g 42 106 419 959 0.0

Other 264 582 2 643 792 0.1

Other (Total Units) 353 259 3 547 599 0.2

Total 172 184 227 1 934 369 742 100.0

Pan baked bread

manufactured

% of Total

progressive

Manufactured

(Progr. Oct ‘16 – Aug ’17:

11 months)

Wheaten Products: Pan baked bread per type

White945 405 956

48.9%

Brown956 486 975

49.4%

Whole wheat28 929 212

1.5%

Other3 547 599

0.2%

Panbaked Bread per type

-Oct '16 ~ Aug '17-

- Units -

Total: 1 934 369 742 units

(Progr. Sep ‘16 – Aug ’17: 11 months)

Wheat: Price movements

Wheaten products: Year on year price changes

2017 2016 2015

Price Price Price

R R R

White Bread 700g 13.03 -2.32 13.34 11.35 11.98

Brown Bread 700g 11.85 -3.42 12.27 15.10 10.66

Cake Flour 1kg 12.51 0.72 12.42 0.49 12.36

Bread Flour 1kg 13.02 1.17 12.87 8.42 11.87

Source: SA Stats

September

% Year

on Year

% Year

on Year

Wheaten products: Price movement Index

(Aug ‘08 – Sep ‘17)

0102030405060708090

100110120130140150160170180190200210220230240250

Jan-

08

May

-08

Sep-

08

Jan-

09

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10

Jan-

11

May

-11

Sep-

11

Jan-

12

May

-12

Sep-

12

Jan-

13

May

-13

Sep-

13

Jan-

14

May

-14

Sep-

14

Jan-

15

May

-15

Sep-

15

Jan-

16

May

-16

Sep-

16

Jan-

17

May

-17

Sep-

17

WHEATEN PRODUCTS INDEX

Bread White 700 gr Bread Brown 700 gr

Bread White 600 gr Bread Brown 600 gr

Flour Bread 1 Kg Flour Cake 1 Kg

SAFEX Spot price Wheat

Index221.22

170.86

204.72

193.58

Index221.50

174.13

165.92

General

Transport by Component

Wheat Maize

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

%

WHEAT:TRANSPORT BY COMPONENT

Conveyor Belt Freight rail Road Transport

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017%

MAIZE:TRANSPORT BY COMPONENT

Conveyor Belt Freight rail Road Transport

Wheat: Co-workers (Whole Grain)

Processors

78

Harbour silo owners

17

Traders

47

End consumers

1

Storers

18

Wheat: Firms registered with SAGIS

Total firms: 161

Wheat: Co-workers (Products)

Bakery groups5

0.74%Supermarket

Groups4

0.59%

Independent Supermarkets

59187.30%

Independent Bakeries

314.58%

Wheat Milling Ind.42

6.20%

Import/Export

40.59%

Wheat: Firms registered with SAGIS (Products)

Total firms: 677

Acknowledgement

Board of Directors

The Winter Cereal Industry is represented by:

Dr John Purchase Chairperson

Mr Anton Nebe Vice-Chairperson

Mr Tato Make Ms Mariana Purnell Mr Geoff Penny (Alternate)

The following parties makes it possible to fulfil SAGIS’

commitments:

Winter Cereal Trust

Wheat Forum

Relevant Associations

Board of Directors

Co-workers

Staff

Acknowledgement

Gratitude

Thank you

Note:

This presentation is available on SAGIS’ website

under Presentations