ANALYSING BRAZIL’S NEW

ORANGE JUICE AGENDA

World Juice II - Madrid October 5th, 2011

Christian Lohbauer | Executive President

Marcos Fava Neves | Professor University of São Paulo

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Topics

About CitrusBR

• CitrusBR was founded in June 2009 by the biggest Brazilian producers and exporters of citrus juices and derivatives:

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CitrusBR Current Agenda

• Transparency and Information – Commitment towards increased transparency with all stakeholders – Disclosure of information about production costs, statistics, market in general

• Sustainability

– Joint efforts regarding carbon footprint inventories and other subjects

• Marketing

– Project with Apex and “I feel orange”

• Other Issues affecting our sector

– Tax credits – Currency appreciation – Institutional agenda - with government, other entities and sectors with common

interests (i.e: forest code revision) – Increasing production costs in Brazil

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CitrusBR Agenda • Transparency and Information

Most complete study about the Brazilian Citriculture published on October, 2010 during an event in São Paulo organized by

the economy newspaper “Valor Econômico” (now translated into English and distributed during the World Juice)

Series of events in the main cities of the citrus belt to discuss the study and the Consecitrus with growers

First crop forecast announced on May 2011 with inventory levels

Updated inventory levels announced on July 2011

New statistics on orange juice and other beverages consumption at CitrusBR’s website, containing comprehensive information

for the 40 main markets

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CitrusBR Current Agenda

• Transparency and Information – Crop Forecast

– The crop forecast in Brazil is usually announced by the National Company of Food Supply (CONAB) and the Institute of Agricultural Economics (IEA). This year, CitrusBR has also announced its forecast:

– The numbers differ due to

• Slightly different methodologies (were discussed prior to announcement)

• Geographical reach (CitrusBR includes part of the Minas Gerais state)

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CitrusBR: 387 million boxes (40,8 kgs)

IEA/Conab: 377 million boxes*

*estimative on Sep 2011, the first estimative was of 354.9 MM

CitrusBR Agenda

• Consecitrus – Pricing model to be established after negotiations with representatives from the

industry and from growers associations (currently Associtrus, Federation of Agriculture of São Paulo and Brazilian Rural Society)

– To be used as reference for price formation, following the model successfully adopted by the Brazilian sugarcane and ethanol sector called “Consecana”, where they consider the total recoverable sugar (similar to soluble solids in the oranges) and have created a single institution to represent all growers associations

– Voluntary entry

– The idea is to clarify how prices are formed in order to avoid huge fluctuations in prices and losses for growers (especially those who prefer to negotiate their production upon delivery without fixed prices)

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CitrusBR Agenda

• History – Consecitrus – Formal negotiations started in the beginning of 2010 and included:

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Before implementation, it must be evaluated and authorized by Brazilian competition regulation agencies

Several meetings with representatives from industry and growers

MOU signed on October 25, 2010 by all representatives in order to reaffirm their commitment to implement the Consecitrus

Since May, 2011 both sides have been working on detailing production costs with the help of specialized advising companies

CitrusBR Agenda - Marketing

• Project with Apex (Brazilian Trade and Investment Promotion Agency) started on 2010, includes: – Institutional Actions – sustainability studies, institutional material about the whole

Brazilian citrus chain targeting increased transparency

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CitrusBR Agenda - Marketing

• Actions targeting the consumption decline in the main markets – development of a communication platform called “I feel orange”, integrated with

social networks to update the image of the orange juice, making it attractive for new generations and associating it with creativity, inspiration and health.

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Conclusions and Perspectives

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• Consecitrus – 2012

• Sustainability – Update carbon footprint data, start other studies and joint actions

• Marketing – Continue Project with Apex ,“I feel orange”, improve CitrusBR website

• Others

Brazilian Association of Citrus Exporters

www.citrusbr.com/en | citrusbr@citrusbr.com