Guides for gutter Text colours R 27 G 66 B 152 R 0 G 0 B 0 R 127 G 127 B 127 Background shading R 242 G 242 B 242 R 225 G 235 B 244 R 227 G 244 B Colour order (left to right, top to bottom) R 59 G 110 B 143 R 251 G 193 B 119 R 115 G 198 B 161 R 103 G 153 B 200 R 186 G 163 B 171 R 191 G 191 B 191 R 127 G 127 B 127 R 201 G 48 B 146 R 27 G 66 B 152 R 84 G 7 B 91 R 248 G 152 B 29 R 241 G 237 B 238 R 254 G 234 B 210 R 211 G 227 B 237 NZ Economic Update Rabobank Food & Agribusiness Research NZ Cold Storage Assoc. Conference 18 th August 2014

2 NZ Cold Storage Assoc. Conference August 2014 Quiz question One more to start the day... Who was the ancient Greek God / Goddess of agriculture?

3 NZ Cold Storage Assoc. Conference August 2014 Status of the Global Economic Recovery Source: IMF & Rabobank, 2014 Growth in global importsGlobal GDP growth by country/region Source: WTO & Rabobank 2014

4 NZ Cold Storage Assoc. Conference August 2014 Lingering doubts... The Income vs. Wealth effects Source: U.S. Federal Reserve & Rabobank, 2014 U.S. Federal Reserve Quantitative easing... is easing!

5 NZ Cold Storage Assoc. Conference August 2014 Steady recovery in NZ Economic Activity Source: Statistics NZ & Rabobank, 2014 Private vs. Public Sector Contributions, Q1GDP growth Source: Statistics NZ & Rabobank, 2014

6 NZ Cold Storage Assoc. Conference August 2014 But the government has played a critical role... Source: Roy Morgan & Rabobank, 2014 NZ Government Confidence Rating

7 NZ Cold Storage Assoc. Conference August 2014 Kiwis are migrating home, plus a bunch of others! Source: Statistics NZ & Rabobank, 2014 Net permanent migration to NZ

8 NZ Cold Storage Assoc. Conference August 2014 Industry contributions to the recovery Source: Statistics NZ & Rabobank, 2014 Bank lending to select sectorsIndustry breakdown of GDP by select sector Source: RBNZ & Rabobank, 2014

9 NZ Cold Storage Assoc. Conference August 2014 Robust recovery in the jobs market Source: Statistics NZ & Rabobank, 2014 Employment growth by typeNZ unemployment & labour force participation Source: Statistics NZ & Rabobank, 2014

10 NZ Cold Storage Assoc. Conference August 2014 So what’s got the RBNZ going?... Wages & Inflation Source: Statistics NZ & Rabobank, 2014 ‘Tradeables’ vs. ‘Non-tradeables’ CPIWage & Consumer price growth Source: Statistics NZ & Rabobank, 2014

11 NZ Cold Storage Assoc. Conference August 2014 Household are feeling good... but are still a bit careful Source: Statistics NZ & Rabobank, 2014 NZ & AUS Consumer SentimentNZ Retail Trade Source: Westpac, & Rabobank, 2014

12 NZ Cold Storage Assoc. Conference August 2014 Foreign trade Source: ANZ & Rabobank, 2014 Commodity pricesNZ Commodity Price Index Source: Statistics NZ & Rabobank, 2014

13 NZ Cold Storage Assoc. Conference August 2014 Geopolitics... A fly in the ointment or... opportunity knocking? Source: UN Comtrade & Rabobank, 2014 NZ Exports to Russia, 2013Russia – Top 20 imported products by value, 2013 Source: Statistics NZ & Rabobank 2014

14 NZ Cold Storage Assoc. Conference August 2014 An apple a day keeps Putin away Source: UN Comtrade & Rabobank, 2014 Not good news if you’re a doctor in Poland!Russia apple imports by country by value, 2013 Source: Deutsche Welle

15 NZ Cold Storage Assoc. Conference August 2014 Can Kiwis fly? We sure hope not! Source: RBA, RBNZ & Rabobank, Financial Markets Research 2014 NZD & AUD historical currency movements – Last 12 months 31-Jul m+6m+12m NZD/USD AUD/USD EUR/USD GBP/USD Rabobank currency forecasts

16 NZ Cold Storage Assoc. Conference August 2014 In Summary! Key takeaways The NZ economy has affected a robust, private sector led recovery. Responsible political leadership has created the necessary conditions for this to happen. Population growth provides added momentum, with more & more people finding a reason to move to (and back to!) NZ. Risks to the global recovery remain, including near-term geopolitical disruptions to F&A trade. Interest rates are set to stabilise for the time being as the RBNZ assesses recent hikes and observes global markets.

17 NZ Cold Storage Assoc. Conference August 2014 Quiz Who was the ancient Greek god / goddess of agriculture Demeter

18 NZ Cold Storage Assoc. Conference August 2014 Food & Agribusiness Research and Advisory (FAR) Marc Soccio Senior Analyst Melbourne, Australia +61 (3) Meet the FAR Oceania research team… Luke Chandler, General Manager Hayley Moynihan, Senior Analyst (Dairy) Michael Harvey, Senior Analyst (Dairy) Georgia Twomey, Commodities Analyst Graydon Chong, Senior Analyst (Grains & Oilseeds) Angus Gidley-Baird, Senior Analyst (Animal Proteins) Matt Costello, Analyst (Animal Proteins) A global team of 80 analysts dedicated to delivering insights into the world’s major F&A regions

19 NZ Cold Storage Assoc. Conference August 2014 About the Rabobank Group This document is issued by Rabobank Australia Limited incorporated in Australia (“Rabobank”). The information and opinions contained in this document have been compiled or arrived at from sources believed to be reliable, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. This document is for information purposes only and is not, and should not be construed as, an offer or a commitment by Rabobank or any of its affiliates to enter into a transaction. This information is not professional advice and has not been prepared to be used as the basis for, and should not be used as the basis for, any financial or strategic decisions. This information is general in nature only and does not take into account an individual’s personal circumstances. All opinions expressed in this document are subject to change without notice. Neither Rabobank, nor other legal entities in the group to which it belongs, accept any liability whatsoever for any direct, indirect, consequential or other loss or damage howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. This document may not be reproduced, distributed or published, in whole or in part, for any purpose, except with the prior written consent of Rabobank. All copyrights, including those within the meaning of the Copyright Act 1968 (Cth), are reserved. Australian law shall apply. By accepting this document you agree to be bound by the foregoing restrictions. © Rabobank Australia Limited, Level 16 Darling Park Tower 3, 201 Sussex Street Sydney Australia, With over 110 years of banking experience, Rabobank is the world’s leading specialist in food and agribusiness banking. Founded in the Netherlands in 1898, by farmers for farmers, Rabobank retains its cooperative structure and founding principles while operating in 47 countries around the world. Rabobank is among the 30 largest financial institutions in the world, based on Tier 1 Capital with a continuing and growing presence in Australia and New Zealand. Rabobank Australia and Rabobank New Zealand are part of the international Rabobank Group. Rabobank Australia Limited is a leading rural lender in Australia and takes pride reinvesting back into the local agricultural community. Rabobank understands the cyclical nature of agribusiness and takes a long-term view of the industry, using its established network of 61 strategically located branches across the nation to service rural clients. As well as global knowledge and local market expertise, Rabobank rural managers have a genuine understanding of their clients’ businesses. This unique approach provides a real value-adding resource to help clients achieve their short and long- term business goals. For more information on Rabobank products and services click on the links below: