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© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Global Cocoa pricesKakao Konek – 6 Dec 2017

Simon BakkerKennemer Foods

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Key Determinants of Global Prices

Annual production

Weather and climate

New hectarage

Geopolitical issues

Supply Demand

Consumption in US / Europe

Emerging markets

Rise in per capita income

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Developments over last year

• Prices decreased last year

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Developments over last year

• Prices decreased last year• Current prices still depressed

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Developments over last year

• Prices decreased last year• Current prices still depressed• Main causes:– Unexpected big harvest in Ivory Coast – Weaker demand in emerging markets Russia and

Brazil

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Developments over last year

• Prices decreased last year• Current prices still depressed• Main causes:– Unexpected big harvest in Ivory Coast – Weaker demand in emerging markets Russia and

Brazil• Where do we go from here?

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Developments over last year

• Prices decreased last year• Current prices still depressed• Main causes:– Unexpected big harvest in Ivory Coast – Weaker demand in emerging markets Russia and

Brazil• Where do we go from here?

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

INDUSTRY Outlook – DEMAND SIDE

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Trends: Demand Outlook

• Demand resurgence in traditional markets

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Resurgence in Traditional Markets

Source: CCS Cocoa, 2017

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Trends: Demand Outlook

• Demand resurgence in traditional markets• Consumption picking up significantly in

emerging markets – Russia– Turkey– Brazil– China and India

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Significant pick up in Emerging Markets

Source: CCS Cocoa, 2017

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Chocolate Sales Outlook (Growth 2014-2022)

Source: Euromonitor, 2017

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Trends: Demand Outlook

• Demand resurgence in traditional markets• Consumption picking up significantly in

emerging markets – Russia– Turkey– Brazil– China and India

• Overall positive outlook

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

INDUSTRY outlook – SUPPLY SIDE

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Trends: Supply Outlook

• Ivory Coast – expected revert to “normal” production

• Ghana – production steady

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Trends: Supply Outlook

• Ivory Coast – expected revert to “normal” production

• Ghana – production steady• Indonesia– continuous dramatic decline

© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Indonesia in dramatic decline

Indonesia Main Crop Trend

Source: CCS Cocoa, 2017

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Trends: Supply Outlook

• Ivory Coast – expected revert to “normal” production

• Ghana – production steady• Indonesia– continuous dramatic decline• Minor Origins– Ecuador: bright spot– Not replicated in other minor origins

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Minor Origins

Source: CCS Cocoa, 2017

Ecuador Cocoa Production Brazil Cocoa Production

Nigeria Cocoa Production Cameroon Cocoa Production

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Trends: Supply Outlook

• Ivory Coast – expected revert to “normal” production

• Ghana – production steady• Indonesia– continuous dramatic decline• Minor Origins– Ecuador: bright spot– Not replicated in other minor origins

• Lower prices reducing new planting

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Conclusion

• Much brighter prospects in medium to long term

• Philippines– Building cacao industry resilience– Short term volatility– Increasing yield is key– Raising Philippine brand as high quality origin

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Our cacao farmers…..

15,000 and counting…..

©2017 Kennemer Foods International Inc. All rights reserved.

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