Cashew Round Table

The Panel

• Amit Khirbat President & Global Head, Cashew Business, Olam International Ltd(Moderator)

• Hari Nair President, Western India Cashew Company

• Harry Sinclair Vice President of Procurement, Treehouse Foods

• Thai Son CEO, Long Son Joint Stock Company

• Wim Schipper Director of Tree Nuts and Ingredients, Intersnack Procurement B.V

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Presentation Agenda

1. INC Official Statistics Table – Cashews2. Kernel Demand / Consumption

• USA• Europe

3. Price trend - last 10 years4. Trends, Challenges & Opportunities5. Panel Discussion6. Q&A

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Antitrust Statement: The fundamental purpose ofthis session is for the participants to discussdifferent aspects of the nut and dried fruit industry. Itis the policy and practice of the INC Foundation toconduct all its meetings and activities in strictcompliance with antitrust and competition laws.There shall be no discussions of competitivelysensitive information, including but not limited toprices, rates, coverage, market practices, claimssettlement practices, customers or any othercompetitive aspect of an individual company’soperation. INC participants to this meeting commitnot to enter into any agreements betweenundertakings, decisions by associations orundertakings and concerted practices which mayaffect trade and which have as their object or effectthe prevention, restriction or distortion of competitionwithin the internal market. Each participant isobligated to prevent any discussion from fallingoutside these bounds.

Copyright Notice: All images used in this presentation are for educational purposes only. They are either in the public domain and notsubject to copyright, or have been purchased. All images used in this presentation are the property of their respective copyright owners.

INC Official Statistics Table - Cashews

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ESTIMATED WORLD CASHEW PRODUCTION - Raw Cashew Nut (RCN) · Metric Tons

COUNTRY BEG.STOCK CROP TOTAL

SUPPLYENDINGSTOCK

BEG.STOCK CROP TOTAL

SUPPLYENDINGSTOCK

Cote d'Ivoire n/a 673,236 673,236 20,000 20000 725,000 745,000Guinea-Bissau n/a 225,000 225,000 250,000 250,000Nigeria n/a 180,000 180,000 200,000 200,000Benin n/a 110,000 110,000 110,000 110,000Burkina Faso n/a 80,000 80,000 85,000 85,000Ghana n/a 75,000 75,000 80,000 80,000Senegal n/a 55,000 55,000 60,000 60,000Gambia n/a 15,000 15,000 15,000 15,000Subtotal Western Africa n/a 1,413,236 1,413,236 20,000 20,000 1,525,000 1,545,000India n/a 817,045 817,045 800,000 800,000Vietnam n/a 300,105 300,105 40,000 40000 300,000 340,000Cambodia n/a 90,034 90,034 120,000 120,000SUBTOTAL N. HEMISPHERE n/a 2,620,420 2,620,420 60,000 60,000 2,745,000 2,805,000

Tanzania n/a 300,000 300,000 30,000 30,000 320,000 350,000Mozambique n/a 92,000 92,000 10,000 10,000 100,000 110,000Kenya n/a 10,000 10,000 10,000 10,000Subtotal Eastern Africa n/a 402,000 402,000 40,000 40,000 430,000 470,000Brazil n/a 100,000 100,000 100,000 100,000Indonesia n/a 80,000 80,000 85,000 85,000SUBTOTAL S. HEMISPHERE n/a 582,000 582,000 40,000 40,000 615,000 655,000Others n/a 123,000 123,000 125,000 125,000WORLD TOTAL n/a 3,325,420 3,325,420 100,000 100,000 3,485,000 3,585,000

2017/2018* 2018/2019

NORTHERN HEMISPHEREWestern Africa

SOUTHERN HEMISPHEREEastern Africa

INC Official Statistics Table - Cashews

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ESTIMATED WORLD CASHEW AVAILABILITYMetric Tons

Growing Area/CountryBeg. Stock(Shelled)

Domestic crop(RCN to be shelled)

Imported Crop(RCN to be shelled)

Ending Stock(Shelled)

Seasonal Avg.Kernel/RCN ratio

Estimated Kernelavailability

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Cote d'Ivoire 40,000 0.24 9520Guinea-Bissau 0.24 0Nigeria 18,000 0.24 4284Benin 12,000 0.24 2856Burkina Faso 5,000 0.24 1190Ghana 5,000 0.24 1190Senegal 0.24 0Gambia 0.24 0Subtotal Western Africa 80,000 0.24 19040India 817,045 649,050 0.24 348,931Vietnam 300,105 1,312,425 0.22 361,207Cambodia 10,000 0.22 2,200SUBTOTAL N. HEMISPHERE 1,207,150 1,961,475 0.23 731,377

Tanzania 5,000 0.24 1190Mozambique 35,000 0.24 8330Kenya 5,000 0.24 1190Subtotal Eastern Africa 45,000 0.24 10710Brazil 100,000 21,000 0.21 25,894Indonesia 20,000 10,000 0.24 7,140SUBTOTAL S. HEMISPHERE 165,000 31,000 0.23 43,744Others 0WORLD TOTAL 1,372,150 1,992,475 0.23 775,121

2017/2018*

Western Africa

Eastern Africa

US Cashew Volume (%) and Price Change(%) versus Year Ago (YA)

Source: IRI, Total Multi Outlet (MULO)

• Total value EUR 600m, Value growth 4,6%, Top-5 countries: 4 out of 5 markets show volume reduction; total reduction 1,8%

• 2015->2017, retail selling prices increased by 6,5%

Cashew Europe – market and developments

10 year Price trend for major Cashew grades

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Consumptiondriven run

GlobalFinancialCrisis

IVC politicalcrisis

Continuous high pricesled to demanddestruction, combinedwith good crops

Market drop led to pileup of lower gradesthat were diced topieces, mech also ledto higher piecesgeneration

Oversold pieces position +efficiency improvement inmech processing lead to tightpieces supply

Supply & demand timingmismatch. 2017 shortVietnamese crop

Good cropexpectation &lack of buyingsupport.

Price Movement – the spikes

2007 2011 2016- 2017

Nature Consumption drivenincrease

Supply (shortage) drivenincrease

Supply timing mismatchamplified by consumption

Period May 07 – Jul 08 Feb 10 – Aug 11 Mar 16 to date

W320 – FoB $/lb 2.13 - 3.46 2.77 - 4.72 3.68 - 4.90 & 4.50 today

Absolute increase $1.33 $1.95 $1.22 - $0.82

% increase 62% 70% 33% - 22%

Farmer price in IVC Less than 200 CFA Less than 275 CFA About 700 CFA – 550 today

Trends, Challenges and Opportunities

• Trends:• Food safety & Traceability• Growth of Vietnam as the largest processing hub.• Mechanization• Sustainability

• Challenges:• Need for growth in supply & demand - lack of coordinated promotion efforts like in almonds• Increasing yield in Africa• How to reduce price volatility• Lack of homogenization of grades across origins.

• Opportunities / Threats:• The growth in cashew pieces as ingredient grades has just started and is doing well• Impact of current high prices on demand• Will Digitalization disrupt our Industry (Amazon Go, VR grocery shopping etc). Can it help to

improve productivity & dis-intermediate players from the supply chain to make it more agile, 10

LET’S START THE PANEL DISCUSSION

AND

DISCUSS THIS IN MORE DETAIL

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Thank you

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