Almanaque Aprosoja Status of the Brazilian

Soybean Industry

Marcelo Duarte Monteiro

CEO – APROSOJA MATO GROSSO

Brazilian Soybean Growers Association

July 2012

Country 2011/12 2012/13(e)

United States 83.2 83.0

Brazil 65.5 78.0 Argentina 41.0 55.0 China 13.5 12.6

India 11.0 11.4 World 235.9 267.2

USDA

BRAZIL

• 2nd world producer and processor of soybeans

• 2nd world exporter of soybeans, meal and soy oil

• Over 243.000 growers

• 1.4 million jobs

Source: ABIOVE/ APROSOJA

55

83

13

11

World Soybean Production 20012/13 (MM tons)

76

Soybean Production in Brazil

Source: Conab / Aprosoja

40

7,5

28

Brazil Soybean Production 2011/12 (MM Tons)

MW 22%

78%SOUTHSOUTH

MW

48%

47%

NE

5%

SOUTHMW 56%

36%

NE8%

SOUTHMW 61%

28%

NE

11%

SOUTH

1980/81

15.5 MM Tons

1995/96

25.9 MM Tons

2008/09

57.1 MM Tons

2011/12

66.4 MM Tons

Source: Conab

61%

12%

MW 22%

78%SOUTHSOUTH

MW

48%

47%

NE

5%

SOUTHMW 56%

36%

NE8%

SOUTHMW 61%

28%

NE

11%

SOUTH

1980/81

15.5 MM Tons

1995/96

25.9 MM Tons

2008/09

57.1 MM Tons

2011/12

66.4 MM Tons

Source: Conab

61%

12%

Source: Conab / Aprosoja

Soybean Area

Area (MM ha)

Yield (Ton/ha)

Production (MM Tons)

3,5%

-15%

-12%

Brazil – Soybean Production – 2011/12

2,75 2,82 2,82

2,63

2,93

3,12

2,65

00/01 06/07 07/08 08/09 09/10 10/11 11/12

38,4

58,4 60,0 57,2 68,7

75,3 66,4

00/01 06/07 07/08 08/09 09/10 10/11 11/12

14,0

20,7 21,3 21,7 23,5 24,2 25,0

00/01 06/07 07/08 08/09 09/10 10/11 11/12

-35% - 10 mm Tons

Source: Conab / Aprosoja

30%

21%

11%

16%

7%

Soybean Area

State/Region Share (%)

10%

Area (MM ha)

Yield (Ton/ha)

Production (MM Tons)

10%

9,3%

20,2%

Brazil – Soybean Production

2,75

2,93

3,12

2,65

3,12

2,90

2,65

00/01 09/10 10/11 11/12 12/13(E)

12/13(E2)

12/13(E3)

14,0

23,5 24,2 25,0 27,5 27,5 27,5

00/01 09/10 10/11 11/12 12/13(E)

12/13(E2)

12/13(E3)

38,4

68,7 75,3 66,4

85,8 79,8 73,0

00/01 09/10 10/11 11/12 12/13(E)

12/13(E2)

12/13(E3)

Brazilian Soybean Complex

Fonte: ABIOVE; CONAB

Elaboração: APROSOJA

EXPORTS

13,1

OIL

6,8

SOYBEANS66,2

SOYMEAL

26,8 PROCESSING

INDUSTRY

35,3 (53,3%)

DOMESTICCONSUMPTION

13,8

EXPORTS

1,4 TonsEXPORTS

30,0 (45,3%)

DOMESTICCONSUMPTION

5,5

Brazil – Biodiesel Production

B5 B2

Costs of Production Brazil x Argentina x USA

Source: Conab / Agroconsult

2011/12 2012/13* 2011/12 2012/13* 2011/12 2012/13* 2011/12 2012/13*

Seed 140 160 49 38 87 74 84 89

Fertil izer 58 61 45 45 164 121 206 214

Chemicals 41 45 79 79 123 108 138 118

Operations 69 73 133 102 101 90 57 52

Labour 48 49 19 18 180 163 67 67

Other variables 170 132 89 82 80 73

357 388 496 413 745 639 632 612

Depreciation 202 211 152 153 126 112 59 54

Land 336 341 225 158 194 176 176 200

538 552 377 311 320 288 235 254

895 939 872 724 1.065 927 867 866

Total variables

Custos Variáveis

Custos Fixos

BRAZIL (south) BRAZIL (mid-west)US$/HA

ARGENTINA

Total fixed

Total Costs

USA

Resource Optimization through Second Crop:

Two crops harvested in the same season with no irrigation

Soy 2,3

Soy 2,6

Soy 3,1

Corn 6,0

3 X More

Mato Grosso

Total Yield per Year (Tons/hectare) -2012

IMEA/USDA

World

Technology – Two Crops, Same Season

1,8 4,0 Yield Soy+ Corn 2nd (Tons/ha) – Growth of 122% Conab / Imea

Area (MM hectares)

Production (MM Tons Soy + Corn 2nd Crop)

Preserved Area = 30 MM ha

Production (MM Tons Corn 2nd Crop)

Total Production Soybean + Corn 2nd Crop - Brazil

Biotechnology

Biotech adoption rate in Brazil Adoption: 11/12

Source: CÉLERES® | Values as % of total planted area | Values of December 2011

Timeline of biotech approvals in Brazil Medida provisória

Lei Biossegurança

Soja RR Algodão MON531 Algodão LLCotton25 Algodão WideStrike Soja LibertyLink A5547-127 Algodão TwinLink

Algodão RR Algodão Bollgard II Soja LibertyLink A2704-12 Algodão MON88913

Milho RR2 Milho MIR 162 Soja MON 87701 x MON 89788 Milho TC1507 x MON810 x NK603

Milho Bt11 Milho MON 810 x NK 603 Milho Bt11xMIR162xGA21 Milho TC1507 x MON810

Milho GA21 Milho Bt11 x GA21 Milho MON89034xNK603 Feijão EMB-PV051-1

Milho TC1507 Milho TC 1507 x NK 603 Algodão GlyTol Milho MON 89034 x MON88017

Algodão MON 531 x MON 1445 Milho MON88017

Milho MON810 Milho Mon 89034 Milho MON 810 x TC 1507 x NK 603

Soja CV127

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015Anos

Marco

legal

Aprovação

de Eventos

Source: CTNBio | Elaboration: CÉLERES® | Updated in January 20112

Evolution of even registers and average time spent to approval Fonte: CTNBio | Elaboração: CÉLERES® | Dados de janeiro 2012

Biotechnology

Soybean Logistics in Brazil

Short Distances to Port

Source: Centrograos, Caramuru and Soy Transport Coalition, Aug.2010, BCR Rosário

China

Santos, Brazil Sorriso, Brasil

Transportation Costs Benchmarking

Road

US$ 125/Ton US$ 45/Ton

New Orleans, USA Illinois, USA

Barge

US$ 25/Ton US$ 46/Ton

Santos, Brazil Córdoba, Argentina Road

US$ 36/Ton US$ 66/Ton

Source: ANTF / COPPE

Railways

Ports System

Transportation System Benchmarking

Soybean Ports Influence Area and Exports Share

19%

33% 23%

8%

6% 4% 2%

* Soybean exports share Source: Secex. Elaboration: Aprosoja

Ports

• 107 MM ha of Conservation Unitis – 12.5%

60 MM ha – Highly productive land – 7% - (crops fruits,

forestry)

38 MM ha of urbanization and other uses – 4%

198 MM ha of pastureland – 23%

Sources: Minister of Environment- MMA; IBGE – PAM (2010) and Agricultural Census (2006); INPE – TerraClass; Agricultural Land Use and Expansion Model Brazil - AgLUE-BR (Gerd Sparovek, ESALQ-USP). Notes: 1) The data on Conservation Units exclude the areas called Environmental Protection Areas (APAs); 2) The PPAs data include natural vegetation along rivers, hills and top of hills; 3) The data for other natural vegetation areas include Quilombola´s areas, public forests non settled and other remaining natural vegetation areas

554 MM ha native vegetation – 65%

• 103.5 MM ha of Indigenous Reserves – 12%

Land Use in Brazil

Private Farms – 20%-80% Preservation

Legal Reserve

APP (Riparian Vegetation)

Indian Reservation

State Park

National Park

Parks and Indian Reservations

Source: Embrapa

46.4% of the Amazon Biome are State Preservation Areas (Indian Reserves, State

Parks or National Parks)

In our FARMS, riparian Vegetation MUST be preserved PLUS 20-80% of each farm,

depending on where it is located.

Brazilian Environmental Legislation

• Brazil has the largest area

for soybean expansion in

the world – approximately

22 million hectares

• Argentina is the country

with second highest

potential for expansion

• In total, there are seven

South American countries

among the top 20

countries with highest

potential for expansion,

totaling more than 48 MM

hectares of potential

SOYBEAN YIELD Potential Area for Soybean Expansion (MM hectares)

Potential Area for Soybean Expansion

Source: World Bank, Agroconsult

Key Messages

1- South America competitive and with potential

2- Brazil is the major grower with major potential

3- Brazilian logistics needs to be improved

4- High prices and/or better logistics needed to give incentives to farmers to expand

5- The Potential growth is great opportunity for both current and future players

Marcelo Duarte Monteiro CEO

marcelo@aprosoja.com.br