“OPEC countries are still producing over 30m bbl/d. The US has recently increased interest rates, resulting in the USD strengthening. The Chinese economic slowdown continues. There were mixed market movements across EU fruit and vegetables, with prices in the UK mostly trending downwards.

Mintec Market Report December 2015

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Mintec Market Report – December 2015

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UP

DOWN

Basmati Rice (IN) Tomato (EU) Apples (PL) Sugar ICE (US) Rapeseed Oil (CA) Palm Oil (ID)

+30% +18% +17% +14% +7% +2%

Cucumber (UK) Raspberry (EU) Iron Ore (CN) Pear (UK) Tea (IN) Almond (US)

-28% -21% -18% -12% -6% -3%

All percentage changes in this report refer to month-on-month price changes.

Softs ................................................................................................................................................................................ Arabica coffee prices rose on ICE US (+3%), but Robusta coffee prices on LIFFE London fell (-1%). Sugar prices rose on ICE US (+14%) and LIFFE London (+3%), due to lower production in Brazil during the second half of November. Production was down 7% y-o-y at 704,100 tonnes, as mills continued to process more ethanol than sugar from sugarcane. Tea prices fell in India (-6%), as the season ends and the quality falls. Tea prices in both Sri Lanka (-3%) and Kenya (-2%) also fell. Cocoa bean prices fell on LIFFE London (-1%) and ICE US (-1%), following upward revisions to the global supply and demand estimates for 2014/15. Despite this, prices remained at a four year high due to concerns about the effect of dry weather conditions to the new 2015/16 crop. Expectations that production in Ivory Coast will fall this season also added upward pressure to prices. Cocoa butter prices in the UK fell (-3%), but cocoa powder prices rose (+1%). EU molasses prices remained stable (0%).

Oils and fats ................................................................................................................................................................................ Soyabean oil prices fell in Rotterdam (-2%) and remained stable in Argentina (0%), but rose on CBOT US (+9%) due to increasing demand and the smaller than expected selloff of soyabeans from Argentinian farmers. Palm oil prices rose in Rotterdam (+8%), Malaysia (+5%) and Indonesia (+2%), due to the slowdown in production. Palm kernel oil prices rose in Indonesia (+11%), Rotterdam (+11%) and Malaysia (+5%), due to the slowdown in production and concerns over coconut oil supplies. Coconut oil prices rose in Rotterdam (+8%) and the Philippines (+6%), supported by damage caused by the latest typhoons, raising supply concerns. Rapeseed oil prices rose in Canada (+7%) and Rotterdam (+3%), due to declining global production in 2015/16. Sunflower oil prices rose in Russia (+8%) and Ukraine (+1%), but remained stable in Northwest Europe (0%) and Argentina (0%). Extra virgin olive oil prices fell in Spain (-15%), as the on-going harvest increased supply in the market. However, prices rose in Italy (+1%). Lampante olive oil prices fell in Spain (-9%). Linseed oil prices remained stable in Argentina (0%).

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Grains ................................................................................................................................................................. Maize price rose in Brazil (+6%) due to El Niño related weather concerns. However, maize prices were stable on CBOT US (0%) and in Germany (0%), but fell on Liffe Paris (-4%) and in Argentina (-3%). Milling wheat prices rose in Canada (+1%) and the UK (+1%), were stable on CBOT US (0%) but fell on Liffe Paris (-5%) and ASX Sydney (-1%). Durum wheat prices fell in France (-8%), on ICE Canada (-3%) and in Italy (-1%). Feed wheat prices fell in Rotterdam (-4%) and on Liffe London (-2%). Basmati rice prices rose in India (+30%) and Pakistan (+13%) due to the resumption of exports to Iran. White fragrant rice prices fell in Thailand (-12%) and Vietnam (6%). Feed barley prices fell in France (-5%), on ICE Canada (-3%) and in Germany (-2%). Malt barley prices fell in both UK (-4%) and France (-2%). Oats prices rose in the US (+4%), Finland (+2%) and UK (+2%). Sorghum prices rose in Australia (+2%). Rye prices rose in Germany (+1%), but fell in Finland (-1%).

Ingredients ................................................................................................................................................................. Hazelnut prices declined (-13%), influenced by expectations of a large crop of over 700,000 tonnes in Turkey, the main producing country. Almond prices fell in Spain (-4%) and also in the US (-3%). Peanut prices were down in Argentina (-1%), but rose in the US (+3%) and Brazil (+1%). Pine nut prices were slightly up (+1%) in China. For dried fruit; raisin prices fell in Turkey (5%) and in the US (-4%). Turkish sultanas were also down (-3%). Despite the monthly decrease in dried grape prices in Turkey, prices are still significantly up y-o-y following lower production in the current season. Prices for dried apricots from Turkey declined slightly (-1%). Desiccated coconut was up in the Philippines (+2%), however, prices have fallen almost 50% since the beginning of the year. For spices, black pepper prices remained steady in Malaysia and Indonesia (0%), but declined in Vietnam (-2%). White pepper prices fell on average across South East Asia (3%). On India’s NCDEX, price declines were seen for both coriander (-16%) and turmeric (-3%). Prices for Czech (-3%) and Turkish (-7%) poppy seed both declined in Germany, with sesame seed prices also falling (-13%). Tapioca starch was down (-5%) in Thailand.

Fruit ................................................................................................................................................................. Apple prices in the EU remained down (-2%), with declines seen in Germany (-6%) and the UK (-1%), whilst industrial apples rose in Poland (+17%). A global increase in apple production is expected this season, up 1%, and this is depressing global prices. Apple processing in the EU is estimated to fall to 3.7m tonnes, down 12% y-o-y, due to lower domestic volumes. EU pear prices have also remained low overall (-3%), however, some price declines were seen in the UK (-12%), whilst prices rose in Spain (+12%) and France (+7%) but remained stable in Poland (0%). Global pear production for 2015/16 is forecast up 4% y-o-y, at 25.3m tonnes, following higher output from China. Orange prices declined in Spain (-8%) and the UK (-6%). Banana prices fell in the EU (12%) on average, with declines seen in Germany (-29%), the UK (-7%) and Spain (-4%), but remained stable in Poland (0%). Prices for raspberry in the EU fell (-21%) on average due to slow trade and low quality produce. Apple juice concentrate in China was up slightly (+1%). Frozen concentrated orange juice prices on ICE declined in the US (-2%) due to the reduced demand.

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Vegetables ................................................................................................................................................................. EU potato prices rose (+2%) on average but were increases seen in France (+18%), Poland (+5%) and the UK (+1%), whilst prices declined in Spain (-7%) and remained stable in Germany (0%). Processing potatoes remained stable in the Netherlands (0%). Despite slight concerns in the major EU growing regions, with regards to stored produce, the majority of stocks are in good condition despite the mild weather seen this winter. Carrot prices continued to decline in Spain (-6%) and the UK (-11%), but increased in Poland (+2%) and Germany (+2%). Spanish onions increased (+18%) in Germany. Tomato prices across Europe increased (+18%) as domestic demand has increased. In the UK, prices fell for cucumber (-28%) as supplies increased. Iceberg lettuce also fell (-10%) as the season drew to a close, coupled with reduced demand. Cauliflower prices fell in Spain (-12%), Germany (-8%), and France (-6%) due to increased supplies, whilst prices rose in the UK (+2%). Leek prices remained low in the Netherlands (-29%), France (-16%), the UK (-8%) and Germany (-4%) as volumes increase due to favourable rains during the winter season, coupled with lack of demand.

Meat and poultry ................................................................................................................................................................. Average EU deadweight beef prices were down (-2%) in December, driven by higher production. Prices fell in the UK (-2%), whilst prices were stable (0%) in Germany and Ireland. EU lamb deadweight prices increased seasonally (+5%). Prices were up in the UK (+6%), due to lower lamb production in the winter months. EU deadweight pork prices declined (-4%), caused by low domestic demand for pig meat and higher production. The largest falls were seen in France (-9%), the Netherlands (-6 %), and Belgium (-6%). EU deadweight chicken prices fell (-2%), due to lower exports to Hong Kong and Russia. Deadweight chicken prices mainly fell in Poland (-9%) and the Netherlands (-2%). EU plaice prices increased (+5%) as catches fall seasonally, lowering production.

Milk and dairy ................................................................................................................................................................. Average UK farm gate milk prices stabilised (0%) in December. Butter prices declined in the EU (-2%), as falling stock levels in the Private Storage Aid (PSA) has led to an increase in availability. High domestic demand has caused butter prices to increase in New Zealand (+8%) and the US (+3%). UK cheddar prices remain stable (0%), whilst US cheddar prices have fallen (7%), driven by higher volume of milk used in cheese production. EU SMP prices were down (-4%), due to higher production levels. SMP prices decreased in the US (-6%) and fell in New Zealand (6%). WMP prices fell in both New Zealand (-8%) and the EU (-5%), whilst international demand remains low. EU shell egg prices were down (-1%), with the largest decreases seen in Belgium (3%) and Spain (-6%). EU liquid egg prices also declined (-5%) and egg powders prices fell (-6%).

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Mintec Market Report – December 2015

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Chemicals and plastics ................................................................................................................................................................. North West Europe olefins and aromatics had mixed price movements, with propylene (+11%), ethylene (+5%) increasing due to factory outages, which decreased supply in the market, while styrene (+1%) and toluene (+1%) increased due to feedstock costs increasing and strong market fundamentals. Butadiene (-6%), benzene (-4%) and orthoxylene (-2%) decreased due to lower demand levels. Prices for most EU plastics increased due to stronger demand and an increase in feedstock costs, with PS (+4%), PP (+4%), HDPE (+3%), LDPE (+3%), LLDPE (+3%) all increasing in price, whilst PVC (0%) remained stable, but PET (-1%) decreased due to lower demand. Feedstock ethylene (+4%) prices increased in Asia due to production outages for a number of major producers, while butadiene (-5%) decreased due to lower demand. Most Chinese plastics declined in value, with only PVC (0%) remaining stable, while PET (-2%), LLDPE (2%), LDPE (-2%), HDPE (-2%) all decreased due to lower demand. Phosphoric acid (0%) remained stable in the US, but DAP (-7%) and Urea (-3%) decreased. Sulphuric acid (0%) for North West Europe remained stable.

Pulp and paper ................................................................................................................................................................. Global pulp inventories stood at 35 days of supply in November, down by 1 day m-o-m from October but increased 2 days y-o-y. Total shipments in November were 3.87m tonnes, an increase of 4% m-o-m and 3% y-o-y. Demand for NBSK decreased in the EU in November and inventories fell by 2% from 229,609 tonnes to 224,477 tonnes. In the EU, both NBSK (-3%) and BHK (-3%) prices decreased by the same amount due to demand decreasing. Prices for kraftliner (0%) remained stable, while testliner (-1%) and fluting both decreased (-1%). Newsprint (0%) and coated paper (0%) remained stable in the EU. In the US, NBSK (-1%) and BHK (-1%) pulp deceased in price due to increased supply, since the USD appreciated against the EUR and, as a result, is more expensive for foreign buyers to import from the US. Krafliner, testliner and fluting all decreased (-1%). Prices for newsprint (-1%) and coated paper (-1%) decreased in the US. Pulp prices in China remained stable due to lower imports from the US and increasing demand from corrugated box manufacturers during the end of the year.

Energy ................................................................................................................................................................. Brent crude oil prices on ICE London (-16%) and light sweet crude oil on NYMEX US (13%) fell to the lowest level since June 2004, as OPEC continued to produce above 30m bbl/d. The US Federal Reserve increased its interest rate by 0.25%, strengthening the USD, putting prices under further pressure. US petrol prices (+1%) rose while EU petrol (-11%), EU diesel (22%) and US diesel (-16%) all fell as stock levels remain high. Gas oil prices on ICE fell (-19%). Prices for natural gas on NYMEX US (-22%), ICE London (-10%) and Bacton terminal NBP (-6%) fell due to ample supply and mild weather conditions reducing demand. Coal prices fell in the EU (8%) as unseasonal mild weather reduced demand, while prices were further pushed down by low crude oil and natural gas prices. US coal prices (+1%) increased slightly.

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Mintec Market Report – December 2015

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Metals ................................................................................................................................................................. Lead prices rose on LME (+6%), but nickel (-3%), zinc (-2%) and copper (-2%) all fell. Aluminium prices rose in China (+5%), but remained stable on LME (0%). Hot rolled (HR) and cold rolled (CR) steel prices fell in US (-5%), Black Sea region (-3%) and China (-3%). Stainless steel prices fell in the EU (-2%) and China (-1%). Iron ore prices fell in China (-18%). Aluminium and steel scrap prices both fell in the EU (-9%). Palladium prices rose in the US (+8%) and UK (+5%). Platinum prices rose in the US (+4%) and UK (+4%). Silver prices fell in London (-3%) but rose in the US (+1%). Gold prices fell in London (-1%) but rose in the US (+1%) as a result of the US Federal Reserve decision to raise interest rates.

Others ................................................................................................................................................................. Sulphur IN (+12%), Lumber US (9%), Wool UK (+5%), Rubber TH (-6%), ABS SG (-7%), Acrylic Fibre CN (-18%).

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Company profile ....................................................

Mintec Limited Mintec has a long and successful history of working in partnership with sales, purchasing and supply chain professionals, primarily in the retail, manufacturing and food service sectors. We deliver unique understanding and valuable insight into a vast range of worldwide commodity and raw material markets. Using innovative technology and a highly experienced and knowledgeable team of specialists, we have the proven ability to provide independent insight and trusted, authoritative data, and to translate this into expert analysis. This expertise helps the world’s most prestigious brands to make the intelligent, informed decisions needed to reduce costs, manage risks and realise commercial opportunities in order to reach their business objectives.

Mintec Ltd 9 The Courtyard, Glory Park Wooburn Green High Wycombe Bucks HP10 0DG United Kingdom

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Mintec Ltd asserts its copyright over this report. Opinions expressed in the report are those of their authors and not necessarily the company. Mintec accepts no responsibility for losses incurred by using this information - use it at your own risk.