Absa Business Bank Agri- outlook 4 September 2012

1. Absa Business BankAgri- outlook 4 September 2012 Presented by : Ernst Janovsky • Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no responsibility for actions or losses that might occur due to the usage of this information.

2. Global population growth • Africa is poised to deliver the highest population growth globally over the next 90 years, more than tripling from 1 billion in 2011 to 3.6 billion in 2100. In less than 35 years (by 2044) Africa will add another billion people. • At the same time Asia’s population, which is currently 4.2 billion, is expected to reach a peak of 5.2 billion around the middle of the 21st century. By the turn of the century Africa and Asia will make up 81% of the global population of 10.1 billion. World Population Prospects: 1950 – 2100 Source: UN Dept of Economic & Social Affairs, Population Division, 2011 update 1

3. Future food demand • Assumes growth trends in per capita food consumption for Developing countries to grow to that of Developed countries and dietary needs • Assumes that diversion of food products (or production resources) to biofuelsgrows from current levels to 15 per cent by 2050 • Assumes no food wastage prior to 1920 ramping up to current estimates of food wastage of 30 per cent and these are not reduced going forward • Source: FAO, UN Population Division (BA Keating, unpublished) 2

4. Resource availability The continued industrialisation of Asia is reducing its available arable land. In China total cropland is expected to decline from 135 million hectares today, to 129 million ha in 2020 (120 million ha is considered the “red line” for Chinese food security). The UNFAO estimates that more than 80 percent of the projected expansion in arable area is expected to take place in sub-Saharan Africa and Latin America. In Africa this will take place in the large swathe of land below the equator and between Angola in the south-west and Mozambique in the south-east. In other words, on South Africa’s doorstep. Cropland in use and total suitable land (million ha) Latin America and Caribbean Sub-Saharan Africa Transition countries South Asia North Africa Industrial countries East Asia 3

5. Agricultural commodities end decades of underperforming

6. Scramble for hetaerae a function of gross revenue

8. International maize trends

9. World maize trends

10. South African maize trends

11. Domestic maize price trends

12. World soya trends

13. Domestic soya trends

14. Monthly soya price trends

15. Wheat supply to high to support price increases

16. South African Wheat production and price trends

17. Global wine Supply

18. Global wine price trends

19. South Africa - Price of wine sold in Bulk (c / litre)Ave Bulk wine price up 27% since 2007 Sources : VinPro

20. TOTAL AREA PLANTED UNDER WINE GRAPE VINEYARDS (excluding Sultana) % of total Total Sources : VinPro

21. TOTAL PLANTINGS AND UPROOTINGS Hectare

22. AGE COMPOSITION - 2011

23. Local grape harvest 8% 26% 24% 25% 23% 4% 9% 6% 17% 8% Sources : VinPro

24. Local Harvest, Sales & Stock Levels Sources : VinPro

25. Producer Profitability – (R / ha)NFI down 56% since 2004 - ⅔ from Sustainable Target ROC 0,95% ROC 7.39% ROC 8,36% Sources : VinPro

26. Poultry Price trends

28. SA Beef prices

31. Domestic mutton price trends

35. Thank you for the opportunity to share some ideas Contact details E Janovsky Tel (011) 350 6102 Emailernst.janovsky@absa.co.za