CMA CGM Com-Watch Africa - Issue 58 - March 2016

COM-WATCH

AFRICA

ISSUE 58 | MARCH 2016

CMA CGM YOUR EXPERT IN THE TRANSPORTATION OF EXOTIC FRUITS Full Story On Page 3

CMA CGM ATTENDS FRUIT LOGISTICA 2016 Full Story On Page 5

Uganda: National Coffee Strategy A Boost To Industry

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Global: EU Sugar Exports To Miss Quota

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Threatened Rosewood Species Gets CITES Protection

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COM-WATCH

AFRICA

ISSUE 58 | MARCH 2016

Contents 03 | Corporate

CMA CGM Your Expert In The Transportation Of Exotic Fruits / CMA CGM Attends Fruit Logistica 2016 / CMA CGM Cote d’Ivoire Holds Customer Seminar On Reefers

09 | General

China Makes US$43 Billion Bid For Syngenta / OCP Group To Be World’s Largest Producer Of Fertilizer By 2017

10 | Cashew, Groundnut & Shea

Cote d’Ivoire: Cashew Output Hits Record In 2015 Up 24% Ghana: Decouple Shea From COCOBOD / Ghana Launches Groundnut Project To Boost Production Mozambique: Mozambique To Set Cashew Benchmark Price Senegal: ITFC supports Groundnut Sector With US$75 Million Agreement Tanzania: Cashew Processing Factories To Start Next Fiscal Year

12 | Cassava

Nigeria: Delta Produces 2.2 Million MT Annually

13 | Cocoa

West Africa: Crops Hit By Severest Saharan Winds In A Generation Cameroon: Decline In Farmgate Prices / Exports Down In January On Weak Prices / AOC Trade Organisation Support Programme Cote d’Ivoire: Worst Harmattan In Decades Slash Mid-Crop / Arrivals At 1,104,000 Tonnes / Strong Ivorian Arrivals To Drop / Amtrada Sells Off Cipexi To Swiss Company / Choco-Ivoire To Double Cocoa Grinding Capacity / Cote d’Ivoire To Issue Professional Licences For Producers Ghana: Taskforce Launched To Assist Distribution Of Inputs / Touton A Lifeline For Cocoa Industry / CPC Shuts Down Two Plants / Ghana To Raise Area Under Production / Cocoa Output Could Fall 25% / 60-Million Free Cocoa Seedlings Nigeria: Cross River State To Boost Output

19 | Coffee

Regional: African Producers See Low Prices On High Brazilian Output EAC: Stakeholders Seek To Revamp Output Cameroon: IRAD & Italy Collaborate On Coffee Research Ethiopia: Ethiopia To Host World Coffee Conference For The First Time Kenya: Farmers Reject Uhuru Directive Uganda: National Coffee Strategy A Boost To Industry

22 | Cotton

Cote d’Ivoire: Ginners To Deliver Seeds To Olheol & COTRAF Ethiopia: Ethiopoa Fails To Meet Textile Export Targets Mali: 2016-17 Cotton Production At 750,000-800,000 Tonnes

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THE AFRICAN COMMODITY REPORT

Brought to you by CMA CGM Africa Marketing

Website: www.cma-cgm.com Email: lhv.marketing@cma-cgm.com Tweet: @CMA_CGM_Group

Rachel Bennett

Dominic Rawle

CMA CGM Marseille Head Office

4, Quai d’Arenc 13235 Marseille cedex 02 France Tel : +33 (0)4 88 91 90 00 www.cmacgm.com

Disclaimer of Liability

The CMA CGM Group make every effort to provide and maintain usable, and timely information in this report. No responsibility is accepted for the accuracy, completeness, or relevance to the user’s purpose, of the information. Accordingly the CMA CGM Group denies any liability for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any published information. Conclusions drawn from, or actions undertaken on the basis of, such data and information are the sole responsibility of the reader.

23 | Foodstuffs & Beverages

Angola: Angola Bans Re-Export Of Imported Food Products Cameroon: Germany To Boost Poultry Farming Nigeria: GSK Nigeria In-Talks With Suntory To Sell Beverage Business / Coca-Cola Takes Stake In Nigerian Juice Maker Chi Senegal: Senegal Produced 30 Million Chickens South Africa: Johannesburg Stock Exchange Launches Beef Futures / South Africa Considering EU Poultry-Import Safeguard Measures / South Africa Ready For 60,000 Tonnes Of US Poultry Tanzania: Tata To Increase Exports Of Pulses Zambia: Goldenlay Agri Limited To Build Poultry Processing Unit Zimbabwe: Zim to Tax Imported Food Commodities

27 | Fruit & Vegetables

Regional: WAO Becomes First Global Entity For Avocados Kenya: EU Funds Banana Processing Plant / Lab Re-Accreditation Boost For Horticultural Exports Morocco: Hard Times For Tomato And Citrus Production / Idyl Melon Harvest Begins / Fruit & Vegetable Exports To Reach 1.6 Million Tons South Africa: Positive European Apple Market / Grapefruit Volumes Halved Sudan: Banana Industry To Get Export Packing Centre Zimbabwe: Government To Introduce Vegetable Tax

30 | Palm Oil

Regional: French Government Propose Palm Oil Tax

31 | Sugar

Global: EU Sugar Exports To Miss Quota / Dubai Sugar Conference Regional: Sub-Saharan Africa To Shift Sugar Sales As EU Quotas End 2017 South Africa: Associated British Foods Offers To Buy South Africa’s Illovo Sugar / Illovo Sees Dip In Sugar Output Uganda: Sugar Deal Flops On Shortfall

34 | Tea

East Africa: Tea Sales Increase To Post-Sanctions Iran Burundi: Annual Tea Revenue Jumps By 52% Kenya: Earned Sh125b From Tea In 0215 / Tea Auction Sees Volumes Increase

36 | Timber

Central/West Africa: Threatened Rosewood Species Gets CITES Protection / EU Imports Of Tropical Veneers Rise In 2015 / Slow Rise In EU Demand Anticipated / Producers See Growth Potential In Mid-East Markets / Falling Timber Exports Affecting Government Revenues / No Interest In Small Diameter Okoume Logs Ghana: First FSC teak from Ghana / Finnish Delegation Discusses Investments

39 | Tobacco

Zimbabwe: TIMB Engages Indian Firm To Automate Auction

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COMMODITY NEWS

CORPORATE CMA CGM Your Expert In The Transportation Of Exotic Fruits Avoiding Costly Airfreight Ivorian Mango Campaign Starts April For a 4-6 week period in April and May, Cote d’Ivoire is flooded with mangos from across the region and from Burkina and Mali.

Mangos are extremely valuable and sensitive commodities. To reduce the risk of turning during transport, mangos can potentially be shipped using controlled atmosphere [CA] technologies to help maintain fruit quality during transit.

A partnership with Bollore was set up 10 years ago and offers an integrated solution for optimal terms of transport. As such CMA CGM can provide the following logistic services: LOGISTIC SERVICES -- Availability of a large buffer stock of equipment located in the north of Côte d’Ivoire at Ferkessédougou. Ferké, its shortened name, is ideally located at the intersection of the north-south A3 road and A12 east-west road close to the main border posts for Burkina Faso and Mali.

-- Modern equipment with the positioning of containers less than 5 years old.

-- We can offer rail transport as the best secured option.

-- Follow up and monitoring by technical teams during all processes and transit.

-- CMA CGM adapts its service during mango season in order to offer a shorter transit time to North Europe.

-- Fast transit times offered eg only 15 days to Dunkerque, France.

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Ferkessédougou

Abidjan

We interview Fathia El Amrani, Commercial Manager of Reefers for Africa and Pierre Hery, General Manager, CMA CGM Cote d’Ivoire about such methods.

What specialist methods does CMA CGM use in shipping mangoes?

There are many different varieties of mango, each varying greatly in shape, colour, size and weight. Given its delicate properties controlled atmosphere transport is used to extend transport and storage. We use specialist reefer containers to move such sensitive cargoes.

Reefers are used to carry all kinds of cargo requiring temperature control, such as chilled or fresh produce primarily fruits, vegetables and dairy products. Your perishable goods deserve the best possible controlled environment during transport to maintain their quality to their final destination. To ensure this, CMA CGM uses such technologies adapted to each of your products.

What additional care does CMA CGM place on such sensitive fruits?

Mangoes are highly pressure- and impact-sensitive and appropriate care must therefore be taken during cargo handling by our expert reefer teams. Mangoes can be suitable for transportation in controlled atmosphere but we mainly ship it in controlled temperature – optimally loaded in reefer containers with a temperature of 12.2 - 13.3°C and a relative humidity of 85 – 90%. Mangoes are also usually packaged in a single layer in fruit crates and cartons. Due to their great sensitivity to pressure, the fruit are sometimes wrapped in paper or padded with wood wool, straw or hay.

What types of reefer are available?

CMA CGM owns one of the largest and youngest fleets of Reefer containers designed for the transport of perishable goods in a temperature-controlled environment. The CMA CGM Reefer fleet consists of 20’, 40’High Cube and 45’PalletWide [32/33] containers equipped with the latest remote control system enabling a permanent monitoring of all units on board.

All our Ivorian reefer containers are less than 5-years old.

Can you tell us more about the cold chain?

The cold chain must at all costs be maintained, since the cargo will otherwise spoil rapidly.

A written cooling order must be obtained from the consignor at booking stage. This order must always be complied with during the entire transport chain. Care of the cargo during the voyage must be aimed at controlling respiration processes [release of CO2, water vapour, ethylene and heat] in such a way that the cargo is at the desired stage of ripeness on reaching its destination. Inadequate ventilation may result in fermentation and rotting of the cargo as a result of increased CO2 levels and inadequate supply of atmospheric oxygen.

What other impacts are there?

The cargo is sensitive to dirt, fats and oils. The holds or containers must be clean and in a thoroughly hygienic condition before loading. The cargo is also highly odour-sensitive and must therefore not be stored together with odour-emitting products.

How do local phytosanitary regulations impact shipments?

The quarantine regulations of the country of destination must be complied with and a phytosanitary certificate may have to be enclosed with the shipping documents. Information may be obtained from the phytosanitary authorities of the countries concerned.

For rates and bookings of mango and other exotic fruits contact your nearest local CMA CGM agent or for enquiries in Cote d’Ivoire please contact Julie Lhoest on Tel: +225 21 23 94 71 or e-mail abd.jlhoest@ cma-cgm.com

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COMMODITY NEWS

CORPORATE CMA CGM Attends Fruit Logistica 2016 The World’s Largest Reefer Transport Fair Again this year, the CMA CGM Group was present at the largest trade fair dedicated to reefer transport, the Fruit Logistica trade show, in Berlin from February 3-5th. With more than 2,891 exhibitors from 130 countries and more than 70,000 visitors, the show was the event for fresh fruits and vegetables global trade actors: producers, importers and exporters, wholesalers and retailers, carriers and freight forwarders.

Fruit Logistica covers every sector of the fresh produce market and is an ideal platform for familiarising with latest innovations and trends in technology, products and services at every link in the international supply chain. It also offers an excellent networking opportunity to key decision-makers in the fresh produce industry During the fair, Mauricio Bonilla, Edouard Monnoyeur, and Juan Vicuna representatives from CMA CGM Reefer Department at our Head Office in Marseilles, along with the CMA CGM Germany team and subsidiaries OPDR and MacAndrews hosted a booth.

They presented their expertise in the field of refrigerated transport, CMA CGM’s global network, and the wide range of services and solutions for reefer transport, in order to achieve new commercial partnerships.

FRUIT LOGISTICA IN FIGURES -- 2,891 exhibiting companies and organisations over 116,000m2 -- 84 countries present -- More than 70,000 visitors -- 8% from Africa -- Website: www.fruitlogistica.de

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Growth Of African Reefer Commodities The demand for tropical products, exotics and ethnic products is growing. With increasing professionalism, food safety certification and being relatively close to Europe there are growing opportunities for exporters from Africa.

Africa Pavilion This year, Germany’s Import Promotion Desk [IPD] worked with the Dutch Centre for the Promotion of Imports from Developing Countries [CBI - https://www.cbi.eu/] to host an Africa Pavilion for companies from Ethiopia, Mali, Burkina Faso and Benin that want to export to the EU and European Free Trade Association [EFTA] markets. Ghana, Morocco, Senegal and South Africa had their own pavilion: Ghana Ghana expanded its presence at Fruit Logistica this year with the support of the CBI. The European Union continues to be the major market for fresh pineapples, notably Switzerland, Italy, France, Germany, Belgium and the UK, among others. The next most important market is the Middle East, and lately also Turkey.

Anthony Sikpa, President of the Federation of Associations of Ghanaian Exporters [FAGE] noted that in addition to pineapple, the mango is becoming increasingly important as an agricultural export. It is also trying to place yam as an alternative to potato in the European market. Fruit Logistica was the ideal showcase to demonstrate the quality of Ghanaian agricultural products in the world and an essential place to network and to initiate valuable business contacts.

“

Fruit Logistica is the showcase for our agricultural products.

So far, our main markets are in Europe and the Middle East and this year we encounter increased interest from Russia.

”

Anthony Sikpa, President, Federation of Associations of Ghanaian Exporters [FAGE] Morocco The 1,200m2 Moroccan pavilion showcased the country’s range of exportable fruit and vegetables, including citrus fruits, berries, rosaceae, avocados, mangoes, and pomegranates. A large delegation, comprising over 40-producers, exporters and professional associations took part to promote the Green Morocco Plan strategy, organised by the country’s Autonomous Establishment of Export Control and Coordination [EACCE], under its Ministry of Agriculture and Fisheries.

The event was an opportunity for Moroccan producers to meet with traditional partners, while also developing new partnerships and attaining new markets, highlighting the potential achievements and planned developments for this sector within the Green Morocco Plan.

Senegal For the first time Senegal exhibited at Fruit Logistica. The Agence Sénégalaise de Promotion des Exportations [ASEPEX] hosted a national pavilion of 120m2 headed by the Minister for Trade, Alioune Sarr, and accompanied by 28 companies. Beyond the usual European marketing it looked to promote its fruits and vegetables to international markets.

South Africa South African fruit exporters attended for the 13th time since the country first introduced its pavilion at Fruit Logistica in 2002. Motivated by strong exports in 2015, they sought to build relationships with their international partners to increase business even further this year.

At the top of the agenda was the search for new export opportunities, not only in Europe but also around the world, in order to sustain organic growth in production back home. The apple and pear sector is concluding an excellent season, with volumes back to what they were 2-years ago, whilst the table grape sector is busy harvesting one of its highest-quality crops ever.

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COMMODITY NEWS

CORPORATE

CMA CGM Cote d’Ivoire Holds Customer Seminar On Reefers This month CMA CGM Cote d’Ivoire’s General Manager, Pierre Hery, hosted a customer training seminar on reefers.

Covering both technical and commercial elements the event was held at the Pacoci storage facility.

A practical demonstration using a reefer container highlighted processes such as stuffing, the bulk loading of tuna and preparation of the mango campaign due to start in April. [See article on exotic fruit transportation]. Pierre was supported by Sylvain Ono Dit Biot, Manager Equipment & Logistics Reefer, and Fathia El Amrani, Commercial Manager Reefer Africa from our Head Office in Marseilles.

Among the guests were major actors of the Ivorian reefer market: Canavese, Wanita, Plantation Eglin, CMNP, CMB, Sodipex, Translog, Nococi, Scodi, Dispal, Sipaci etc. Our reefer agents from Benin, Burkina Faso, Ghana, Mali and Nigeria and Charlotte Govin our new Regional Reefer Manager for West Africa in Abidjan also joined the training in order to strengthen the regional reefer market across West Africa.

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COMMODITY NEWS

GENERAL Global

China Makes US$43 Billion Bid For Syngenta The China National Chemical Corp. agreed to acquire Switzerland’s Syngenta, a global supplier of pesticides and seeds, for US$43 billion in the largest foreign acquisition ever by a Chinese company. Syngenta’s portfolio of toptier chemicals and patent-protected seeds will represent a major upgrade of China’s potential output. Syngenta shares have risen almost 40% in the past 12 months following a US$46 billion takeover bid from US giant Monsanto which was rebuffed last year.

This deal needs to be reviewed by the Committee on Foreign Investments in the United States as Syngenta does billions of dollars’ worth of business in the US. Once approved, a 10-member board of directors will include four current members of the Syngenta board and chaired by Ren Jianxin, ChemChina chairman. The company would remain based in Switzerland.

The deal follows on the heels of another massive chemical company takeover last month, when Dow Chemical and DuPont reached a US$130 billion agreement.

[Bloomberg/Reuters/Merco 04/02/16]

Morocco OCP Group To Be World’s Largest Producer Of Fertilizer By 2017 The OCP Group is aiming to be the world’s largest producer of fertilizers by 2017. The announcement follows King Mohammed VI’s inauguration of a new complex for the production of fertilizers in Jorf Lasfar. The unit is one of four that will produce 12 million tons of fertilizers annually by 2017, positioning OCP Group as the largest producer in the world. The new 5.3 billion dirhams complex will export its products entirely to the African market. Morocco sits on the world’s largest reserves of phosphates, accounting for nearly 75% of the world’s reserves.

[MWN 01/02/16]

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COMMODITY NEWS

CASHEW, GROUNDNUT & SHEA Cote d’Ivoire Cashew Output Hits Record In 2015 Up 24% Ivorian cashew nut crop rose 24% to a record 702,000T in 2015. Marketing of the crop will begin on 15th February.

The government has set a minimum farmgate price of 350 CFA francs/kg [$0.5988], compared with 275 CFA francs the previous year. Farmers have received a total 119 billion CFA francs in 2015. The increase in cashew output has been boosted by government reform and investment. A decade ago, Ivory Coast produced around 80,000 tonnes of raw nuts per year.

With output growing by over 10% annually amid strong demand from Asia, the cashew sector has attracted the attention of a government keen to kickstart the economy.

[Reuters 11/02/16]

Ghana Decouple Shea From COCOBOD The Shea Network Ghana [SNG], a civil society organisation, has called on government to decouple the shea sector and its entire value chain from the Ghana Cocoa Board [COCOBOD] in order to give it the attention it deserves and needs for growth.

[Ghanaweb 07/02/16]

Ghana Launches Groundnut Project To Boost Production The Savanna Agricultural Research Institute [SARI] has launched a project to boost groundnut production in Ghana. With support from the Bill and Melinda Gates Foundation, the “Tropical Legume III” project is targeted at groundnut farmers in the Northern, Upper East and Upper West regions to help them increase their yields. It is being implemented by the SARI in collaboration with the International Crop Research Institute for the Semi-Arid Tropics [ICRISAT] and the International Centre for Tropical Agriculture [CIAT] as part of measures to improve the livelihoods of farmers in Northern Ghana.

[Graphic Online 10/02/16]

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COMMODITY NEWS

CASHEW, GROUNDNUT & SHEA Mozambique Mozambique To Set Cashew Benchmark Price The government of Mozambique is likely to set benchmark prices to control the sale of cashew nuts and according to the Cashew Promotion Institute [Incaju] a proposal has already been submitted to the Cabinet. The move seeks to return some stability to the cashew sales process, providing benefits to both producers and the industry. In recent years various parties involved in the buying process, especially foreigners who export of raw nuts, have set high purchase values, preventing the acquisition of raw material by the Mozambican industry. The measure was approved in a Cabinet Meeting and will be applied in the next campaign, which begins in September. The farm gate price reached MZN50.00/kg [US$1.04] in the second half of January. The price has been buoyed by the presence of buyers from Bangladesh and Pakistan on the ground, who were drawn to the region by the excellent quality of cashew nuts.

[Macauhub/MZ 04/02/16]

Senegal ITFC supports Groundnut Sector With US$75 Million Agreement The International Islamic Trade Finance Corporation [ITFC], a member of the Islamic Development Bank [IDB] Group, signed a US$75 million Syndicated Murabaha Financing agreement on February 21st with the Government of Senegal, with Suneor [the major player in the Senegalese groundnut sector] as Executing Agency. The agreement aims at financing a significant part of the 2015-2016 groundnut campaign. ITFC previously provided US$30 million facility to finance the 2013/2014 groundnut season.

The US$75 million will allow Suneor to purchase and process more than 150,000 tons of groundnuts into groundnut oil and cake [animal feed] to be exported to international markets. Following a good rainy season, the total output for the country for the 20152016 season is expected to be exceptional and reach 1,000,000 tons.

[ZAWYA 21/02/16]

Tanzania Cashew Processing Factories To Start Next Fiscal Year According to the Cashew Board of Tanzania [CBT] the Cashewnut Industry Development Trust Fund [CIDTF] are to finance factories to be constructed in Tunduru, Mtwara Rural and Mkuranga districts. The factories will have a total processing capacity of 30,000T p.a and will be operated under a Public Private Partnership [PPP] arrangement. The aim is to increase the domestic capacity of cashew processing to at least 30%. Currently less than 10% of produce is processed domestically. Tanzania produces between 150,000 and 200,000T of cashew, most of which is exported in raw form. Farmers under the warehouse receipt system have received good prices this season ranging between 2,400/- and 2,900/- /kg, as compared those outside the system who have sold their produce at 2,000/-.

[Daily News 02/02/16]

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COMMODITY NEWS

CASSAVA

Nigeria Delta Produces 2.2 Million MT Annually The Commissioner for Agriculture and Natural Resources in Delta state noted the region produces an average of 2.2 million MT of cassava annually. It cultivates 140,000 ha recording an average yield of 15.7 MT/ha. The total registered number of cassava farmers in the state is 57,514. There had been steady increase in cultivation since 2012 due to the state government’s intervention in the sector including improved cassava multiplication sites at Abraka and Uwheru, in Ethiope East Local Government Area [LGA] and Ughelli in the North LGA. To add value to cassava products, 3-processing mills, each with a capacity to produce 2-tonnes per day, are under construction at Ubulu-Okiti, Aniocha North LGA; Oghara, Ethiope West LGA and Ogbe-Ijoh, Warri South-West LGA.

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COMMODITY NEWS

COCOA West Africa

Crops Hit By Severest Saharan Winds In A Generation The cost of securing cocoa in Europe surged 50% in the past month after the severest Saharan winds in a generation damaged West African crops. Traders in the physical market are now paying as much as US$72/MT more for Ivorian beans than the price on the ICE Futures Europe exchange. The dry weather that’s already hurt bean quality in top producer Cote d’Ivoire may also reduce the upcoming mid-crop, the smaller of 2-harvests.

Cote d’Ivoire got 65% less rain than normal in the past 60 days and areas away from the coast received almost nothing. Dry weather is forecast to persist, hurting the mid-crop. Production for that harvest starting in April could fall by 12%. However deliveries to Ivorian ports exceeded expectations. Arrivals totalled 1.096 million tons from the Oct. 1 start of the season through Feb. 7 - just 1.9% lower than a year earlier. Rabobank forecasts production in the 2015-16 season at 30,000 MT less than previously forecast because of the Harmattan’s impact on the mid-crop.

FACTBOX Harmattan -- A dry dust storm which blows from the Sahara Desert over the West African subcontinent into the Gulf of Guinea -- Runs for 3-months from the end of November to the middle of March -- Brings desert-like weather conditions: lowers humidity, dissipates cloud cover, prevents rainfall formation -- 2016 is the strongest since the 1980s.

El Nino / El Nina -- El Nino has seen sea surface temperatures in the Pacific breaking records in December 2015 by reaching an average of 2.38°C ‘above the norm’ -- Dramatic impacts included a drought in Ethiopia and lower crop forecasts in South Africa, Lesotho and Swaziland -- This anomaly happens at irregular intervals of 2-7 years, and lasts 9-months to 2-years -- A gradual decline is now anticipated returning the ocean to normality, or possibly even a cooling La Niña state, by the middle of 2016.

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Cameroon Decline In Farmgate Prices Farmgate prices have fallen according to the Système d’Information des Filières [SIF] which provides daily and real-time changes in the price of cocoa.

The price now stands 1250-1300 CFA francs per kilogram down from 1600 CFA francs. A consequence of a slowdown on international markets.

[Ecofin 04/02/16]

Exports Down In January On Weak Prices Cameroon’s cocoa exports nearly halved in January as farmers hoarded crops, waiting for prices to rise. Exports dropped to 21,564 MT in January, down from 38,748 MT in December and 34,731 MT in November, according to the National Cocoa and Coffee Board [NCCB]. Some organisations have preferred to keep a portion of their harvest to sell when the price rises. Telcar Cocoa Ltd was the top exporter with 5,517 MT, followed by Olam with 4,740 MT and Ndongo Essomba Settlements 3,009 MT.

[Africa News 18/02/16]

AOC Trade Organisation Support Programme The Programme d’Appui à l’Organisation de la Commercialisation [AOC – Trade Organisation Support Programme] set up by the Conseil Interprofessionnel du Cacao et du Café [CICC – Inter-professional Cocoa and Coffee Council] was created to group producers into larger and more efficient entities.

Under the move Socoprocanyk [Cooperative Society of Cocoa Producers of Nyong and Kellé] was born in the Central region, gathering 1,800 coca producers under one entity. Socoprocanyk has raised FCfa 143 million this season to purchase agricultural inputs from Syngenta and Arysta with the aim to improve both cocoa quality and quantity.

[Business In Cameroon 16/02/16]

Cote d’Ivoire Worst Harmattan In Decades Slash Mid-Crop Extreme temperatures and dry, dusty conditions in Ivory Coast, the result of the most severe and lengthy Harmattan winds in 3-decades, will lead to a sharp drop in cocoa output from the upcoming mid-crop. Cocoa arrivals at the ports were trailing last year’s record crop by just 30,000T by the end of January. But exporters and analysts said the April-to-September harvest could be reduced by 125,000 to 200,000T from the more than a half million tonnes produced last season. A situation not seen for 25-30 years. A large portion of flowers and cherelles [small pods] that appeared on trees in November and December have not survived into late January.

[Reuters 02/02/16]

Arrivals At 1,104,000 Tonnes Arrivals reached around 1,104,000T by Feb. 7 from the start of the season on Oct. 1, from 1,141,000T during the same period of the previous season. Exporters estimated around 41,000T of beans were delivered to Abidjan and San Pedro ports from Feb. 1-7th down from 48,000T during the same period in 2015.

[Reuters 08/02/16]

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COMMODITY NEWS

COCOA

Strong Ivorian Arrivals To Drop Cote d’Ivoire has seen stronger-than-expected port arrivals but the flow of beans will now taper off as supplies on plantations are exhausted. After a strong start to the 2015/16 season, cumulative arrivals at the ports of Abidjan and San Pedro were running behind last year’s record harvest at the end of last week, but delivery levels were still surprising many exporters. Most farmers have already finished harvesting their main crop cocoa so what we are seeing the last big volumes of the [October-to-March] main crop.

Merchants responsible for purchasing beans on plantations and delivering them to exporters at the ports said that while beans were still available, collecting them required driving deeper into the bush, increasing transportation costs. Also a recent reduction in prefinancing from exporters would therefore also contribute to the drop in arrivals.

[Reuters 29/01/16]

Amtrada Sells Off Cipexi To Swiss Company Dutch commodity firm Amtrada has sold Ivorian cocoa exporter Cipexi, which it fully owned, to Swiss trading house Origins for US$8.9 million. The move, which puts an end to Amtrada’s operations in the country marks an expansion for Origins, giving it a foothold in physical markets. Origins is the only stockholder in Cipexi inheriting 2-factories and 600 employees. It hopes to export 50,000 MT of beans in the 2016/17 season and to reach 100,000 MT in 3-years.

[Reuters 16/02/16]

Choco-Ivoire To Double Cocoa Grinding Capacity Choco-Ivoire, a unit of SAF Cacao, will invest US$16.24 million to double its annual grinding capacity to 64,000T by 2018.

Choco-Ivoire produces mainly cocoa liquor, as well as cocoa butter and cake. SAF Cacao is the largest exporter of beans from Ivory Coast’s second port of San Pedro. From average annual purchases of 120,000T over the past 3-years, it will buy 180,000T in 2015/16 and is targeting 200,000T next season. To accommodate its increasing purchases, it is also investing heavily in expanding warehousing space and has started construction of 50,000 m2 of extra warehouses at a cost of US$11.56 million providing a total warehousing space of 90,000 m2.

The Ivorian government, in an effort to add value to its cocoa exports, is aiming to process half of its bean output locally. Of last season’s record harvest of around 1.8 million tonnes, 560,000T were processed locally.

Leading grinders with operations include Swiss firm Barry Callebaut with grinding capacity of 200,000T, Cargill at 120,000T and Singapore’s Olam with 86,000T.

[Reuters 29/01/16]

Cote d’Ivoire To Issue Professional Licences For Producers The Ivorian government has initiated a program to register and provide a professional licence to all producers of cocoa. A 3-day meeting took place in Abidjan 1-3 February bringing together stakeholders to discuss a document to validate the operation.

Registration will enable the Conseil du Cafe-Cacao authorities to target producers, improve traceability and secure the plantations.

[News Ghana 03/02/16]

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Ghana Taskforce Launched To Assist Distribution Of Inputs A new task force, headed by Nana Kofi Ampem, to assist in the distribution of cocoa inputs under the Cocoa Disease and Pest Control [CODAPEC] Unit within the Ghana COCOBOD has been launched. The CODAPEC task force will assist in the distribution of chemicals to ensure that the disease and pest control programme in the growing communities in the Western Region was achievable. Farmers now receive fertilisers and cocoa chemicals directly from the source instead of the mass spraying exercise that was undertaken in the past.

[Ghanaweb 17/02/16]

Touton A Lifeline For Cocoa Industry The government is working with Touton S.A, a French company, to implement a programme to improve dwindling cocoa yields and reduce emissions from deforestation and degradation [REDD+].

The French company is a major international trading group in commodities including cocoa, coffee, and assorted ingredients for the food and beverage industry. The initiative is also being supported by the Forest Carbon Partnership Facility [FCPF], which a partnership of stakeholders that assist developing countries. Known as Climate Smart Cocoa, the objective is to enable Ghana to maximise its cocoa production potential and increase the economic opportunities. Currently, Ghana’s yield per acre is very low, one of the lowest in the world. Ghana’s yield is about 400kg/ha while that of la Cote d’Ivoire is about 1,000kg/ha.

Ghana’s partnership with Touton and FCPF is also aimed at developing an emissions reduction programme focused on reducing carbon emissions from unsustainable cocoa farming practices. Ghana intends to reduce deforestation in the high forest zone [HFZ] by 45% and foster strategic Public-Private Partnership [PPP] to safeguard forest cover and boost yields of cocoa production systems.

[Ghanaweb 17/02/16]

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COMMODITY NEWS

COCOA

CPC Shuts Down Two Plants The Cocoa Processing Company [CPC] Limited has temporarily shut down its 2-cocoa processing plants because of what it describes as operational challenges. Established in 1965, the CPC has 3-plants, comprising 2-cocoa processing factories and a confectionery factory. The cocoa processing factories have an annual throughput of 64,500 MT which are processed into cocoa liquor, cocoa butter, cocoa cake and cocoa powder.

[Graphic 26/01/16]

Ghana To Raise Area Under Production Ghana will aim to raise the area under cocoa production by 750,000 ha over the next decade according to Cocobod, from about 1 million ha now. Ghana is targeting production of 850,000-900,000 MT for the 2015-16 season that began last October up from production in the previous season of about 740,000 MT. Cocobod is distributing 60 million free seedlings to farmers this year, up from 50 million last year.

[AG Week 04/02/16]

Cocoa Output Could Fall 25% Ghana could lose as much as 25% of its projected cocoa output this season as harsh winds and a lack of rain confound efforts to boost yields according to a government source. The Harmattan wind, which blows off the Sahara, sapping soil moisture and spoiling seeds, came early this season and has intensified in recent weeks, stunting pod growth more than usual and stifling government plans for expansion. Ghana had hoped to produce 850,000-900,000 MT of cocoa in the 2015/16 crop year, up from the previous season’s 740,000 MT. However full-year production might not exceed 750,000 MT, and could fall as much as 25% short of initial estimates. Regulator Cocobod, which had provided free early-maturing hybrid seedlings and fertilisers to boost the crop, said it was too early to know the effect of the weather on its output target and declined to give an estimate.

[Reuters 09/02/16]

60-Million Free Cocoa Seedlings COCOBOD is to disperse 60-million free cocoa seedlings to cover over 50,000-ha. This was announced at the inauguration of a 10-member taskforce formed to monitor cocoa disease and pest control chemicals for the Kejebril District in the Ahanta West District of the Western Region.

[GNA 22/02/16]

17

Nigeria Cross River State To Boost Output Nigeria’s southeastern Cross River state plans to expand land under cocoa cultivation by a third in the current season and revamp old farms in a bid to double output. It aims to add 4,000 ha the most modern cocoa hybrids capable of yields of 2 MT/ha.

Farmers will receive 5 million cocoa seedlings to cultivate new farms and revamp old ones at the start of the planting season in March. River accounts for about 30% of the country’s cocoa, with the southwestern region producing about 60%.

Nigeria, the world’s #4 cocoa producer after Ivory Coast, Ghana and Indonesia, estimated its 2013-14 season output to be 350,000 MT.

[Bloomberg 15/02/16]

Daily Spot Price [ICCO] These are the average of the quotations of the nearest three active futures trading months on NYSE Liffe Futures and Options and ICE Futures US at the time of London close.

Date

ICCO daily price (SDRs/tonne)

ICCO daily price (US$/tonne)

London futures (£ sterling/tonne)

New York futures (US$/tonne)

1 Feb 16

2122.54

2924.48

2074.33

2868.67

2 Feb 16

2042.29

2823.02

1998.33

2766.33

3 Feb 16

2091.36

2894.94

2024.00

2840.00

4 Feb 16

2024.99

2829.70

1978.33

2774.00

5 Feb 16

2034.92

2845.59

2001.67

2793.67

8 Feb 16

2096.03

2922.43

2069.00

2860.33

9 Feb 16

2080.66

2912.16

2050.33

2847.33

10 Feb 16

2071.18

2905.25

2056.00

2833.00

11 Feb 16

2029.76

2858.67

2021.67

2793.00

12 Feb 16

2076.52

2919.21

2068.00

2846.33

15 Feb 16

2063.89

2901.45

2049.67

2839.50

16 Feb 16

2068.64

2892.16

2063.67

2832.67

17 Feb 16

2099.12

2931.11

2087.00

2871.33

18 Feb 16

2127.67

2968.57

2114.33

2904.33

19 Feb 16

2083.94

2908.08

2071.67

2840.00

22 Feb 16

2112.84

2937.36

2116.33

2877.67

23 Feb 16

2117.65

2942.62

2132.33

2889.00

24 Feb 16

2151.84

2982.30

2181.33

2920.00

25 Feb 16

2158.34

2998.47

2192.33

2936.67

26 Feb 16

2117.38

2939.99

2162.33

2878.33 18

COMMODITY NEWS

COFFEE Regional

African Producers See Low Prices On High Brazilian Output African coffee producers expect low prices on the world market in 2016 as high output from Brazil could hurt the prospects for any increase according to the Africa Fine Coffees Association. Brazil, the world’s biggest coffee producer and exporter, could grow as much as 52 million 60-kg bags this year, from 43.2 million bags in 2015, according to the nation’s supply agency CONAB. The crop is currently in a higher-yielding half of a 2-year cycle.

However the El Nino weather phenomenon has had a negative impact on production affecting some growing countries for example Columbia, where farmers have reported losses of approximately 90% of the crop.

Average prices on the New York market have dropped 40% since early last year to 120 U.S. cents per pound.

Africa accounts for only a 10th of the total global output. While African producers want to increase production to significant levels, they are focusing on growing specialty beans to hedge against price volatility and regain their market share.

[Bloomberg 05/02/16]

19

EAC Stakeholders Seek To Revamp Output East Africa coffee stakeholders have embraced a renovation and rehabilitation [R&R] initiative as the most effective strategy to address dwindling coffee production and quality in the region. The decline has been blamed on the slow uptake of agricultural practices, low use of inputs, aging trees and high prevalence of diseases. This month the Inter-Africa Coffee Organisation [IACO] held a R&R workshop in Dar-es-Salaam, Tanzania, to consider efforts to revamp the crop.

A group of development partners: Sustainable Trade Initiative [IDH], International Coffee Organisation [ICO], 4CAssociation [4CA], African Fine Coffees Association [AFCA] and Deutsche Investitions-und Entwicklungsgesellschaft mbH [DEG], are already promoting R&R for improved productivity. Renovation entails the use of new seedlings through replanting or infill planting to increase productivity of the farm while rehabilitation improves productivity of the existing trees through grafting and pruning.

[Daily News 04/02/16]

Cameroon IRAD & Italy Collaborate On Coffee Research L’institut de recherche agricole pour le développement [IRAD], the leading organization dedicated to agricultural research in Cameroon is to partner the University of Udine in Italy, with the aim of setting up mechanisms for collaboration in coffee research.

[Ecofiin 30/01/16]

Ethiopia Ethiopia To Host World Coffee Conference For The First Time Ethiopia is to host the International Coffee Organization’s [ICO] 4th World Coffee Conference on March 6-8, 2016 and 116th International Coffee Council meeting on March 9-11, 2016 in Addis Ababa. This conference is the first of its kind in the African continent and Ethiopia is the first African nation to host this main event under the theme ‘Nurturing Coffee Culture and Diversity’.

More than 1,000 participants including Heads of State, high level delegates and academia from 77 ICO member countries and others across the globe would be attending. High-level speakers, topical discussions, and an exhibition of products and services are included in the program.

[Fana Broadcasting Corporate 13/02/16]

Kenya Farmers Reject Uhuru Directive Farmers have rejected a directive by President Kenyatta to form a task force to review the ongoing crisis in the coffee sector. Farmer representatives argued that a task force would not solve their problems as this was not the first time such a move was made.

Such task forces usually end up being part of the cartels of middlemen who rob farmers of their returns. Farmers opposed the move noting the president should have issued a directive to have coffee sold by the national government under one pool.

In their list of demands, farmers want crop prices raised to minimum of Sh200/kg of cherry coffee delivered. Current prices average between Sh30-80. According to the farmers, they only get 1% of returns on coffee sale whereas neighbouring Uganda gets up to 80% on the sale of the crop. Framers also want the procedure for the sale of the crop revised so that the number of middlemen is reduced. As of now coffee goes from the farmer, to the factory, then the miller, through to the marketer before reaching the buyer.

[Daily Nation 15/02/16]

20

COMMODITY NEWS

COFFEE

Uganda National Coffee Strategy A Boost To Industry The institution of a new National Coffee Strategy is being touted as a key move to support the expansion of the country’s coffee exports. The strategy, part of the Uganda National Coffee Strategy 2040, is among others expected to address farmer challenges and improve the crop’s performance both on a national and international level.

The plan is to increase the amount of coffee production to 5.8 million bags from the current 3.8 million [60kg] bags produced in the crop year 2012/13. The strategy’s goals include: to transform farmers from subsistence to commercial; change coffee from a commodity to a sustainable livelihood; make coffee institutions efficient, effective, and accountable; and transform the coffee subsector into a vehicle for national development through integrated industries. Through these different approaches, such as mobilising farmers into groups or improving access to land, credit and markets, UCDA estimates Uganda’s coffee exports earnings could hit US$2.5 billion by 2040 from the current US$410 million Coffee remains the most important agricultural commodity and the major foreign exchange earner contributing an annual average of 20% of Uganda’s total export revenue for the last 10 years.

21

UGANDA COFFEE DEVELOPMENT AUTHORITY [UCDA] FACTBOX -- Public Authority established in 1991 -- Mandate to promote and oversee the coffee industry -- Supports research, promoting production, controlling the quality and improving the marketing of coffee -- Optimizes foreign exchange earnings and payments to the farmers.

-- Issues certificates in respect of grade and quantity & certifies all coffee exports -- Registers organizations and bodies applying to market coffee -- Collects, maintains and disseminates statistics about the industry -- Monitors world market price changes and adjust the minimum price on a day-to-day basis -- For more information view http://ugandacoffee.go.ug/

COMMODITY NEWS

COTTON Cote d’Ivoire

Ginners To Deliver Seeds To Olheol & COTRAF Ivorian cotton ginners are committed to deliver 120,000T of seeds for crushing companies Olheol [70,000T] and COTRAF [50,000T] during the 2015/2016 campaign. The agreement will see increase cotton production and is part of a sector stimulus policy through 100% local processing of textiles and cashew.

[Ecofin 26/01/16]

Ethiopia Ethiopoa Fails To Meet Textile Export Targets Ethiopia has failed to meet export targets for textile exports according to the Ethiopian Textile Industry Development Institute [EDITI. The target was to reach US$60.07 million from textile exports, while only US$41.1 million was achieved, meeting only 70% of the plan. Mid 2015 the government revealed ambitious plans to stimulate the sector by offering attractive incentives to investors which included duty free import of spare parts for the first 5-years of operation. The government also offers reconciliation of VAT for materials purchased locally during the project period if declared within 6-months. The country is also building at least 10-industrial zones - all of which are to be set up by the government. The sector has the advantage of high quality cotton that is grown in the country, as well as duty free access to US through the African Growth and Opportunity Act [AGOA] and the EU market.

[EA Business Week 07/02/16]

Mali 2016/17 Cotton Production At 750,000-800,000 Tonnes Mali forecasts cotton production for the upcoming 2016/17 season at 750,000-800,000 tonnes, up from 550,370 tonnes in the season ending in March. The Malian Company for the Development of Textiles [CMDT] noted achieving the target will depend on good rainfall and the timely arrival of fertilisers and pesticides. Authorities are also taking steps to improve soil quality by distributing lime to farmers to reduce soil acidity. Mali is West Africa’s biggest cotton producer and its season runs from April to March in 2-phases, production between May/June and September/October, with commercialisation from October/November to March 31.

[Reuters 15/02/16]

22

COMMODITY NEWS

FOODSTUFFS & BEVERAGES Angola Angola Bans Re-Export Of Imported Food Products Re-export of food products that Angola imports for domestic consumption will be banned under a joint decree of the Ministries of Trade and Finance currently being drafted, the Angolan Minister of Trade announced. The move is in reaction to the massive re-export of the basic basket of products, which has been recorded in recent months, mainly to neighbouring countries such as rice, sugar, beans, corn flour, soap and cooking oil. Licensing for export of foodstuffs of national origin must be endorsed by the ministerial department that oversees the product to be exported.

[Macauhub/AO 19/02/16]

Cameroon Germany To Boost Poultry Farming The German Government has granted Cameroon FCFA 3.3 billion on 15th February. Funds will set up green innovation centres to improve poultry, cocoa and potato production aiming to increase small producers’ income.

[Business in Cameroon 17/02/16]

23

Nigeria GSK Nigeria In-Talks With Suntory To Sell Beverage Business GSK Consumer Nigeria Plc, maker of Ribena and Lucozade brands confirmed it received a non-binding offer from Japanese group Suntory Beverage & Food Limited [SBF] for their beverage business consisting of the bottling and distribution of Ribena, Lucozade and part of their Agbara manufacturing plant. The Board is considering the offer and expects to make a decision after the appointment of professional advisers and negotiation with SBF. Any potential sale would be subject to shareholder and regulatory approvals and until it completes, the drinks business would belong to GSK Nigeria and business as usual would be maintained. If the transaction is agreed and shareholders and regulators were to approve the sale, the retained GSK Consumer Healthcare Nigeria business would comprise of Oral healthcare, Nutrition and Pharmaceutical/Vaccines businesses, and would remain listed on the Nigerian Stock Exchange [NSE].

[Naija 247 28/01/16]

Coca-Cola Takes Stake In Nigerian Juice Maker Chi Coca-Cola bought a 40% stake in Nigerian juice and snack producer Chi Ltd from unlisted TGI Group. Coca-Cola intends to increase ownership within 3-years, subject to regulatory approvals. It already has a significant presence in Nigeria selling its fizzy drinks. The price was undisclosed but last year Chi was valued at as much as US$1 billion. Lagos-based Chi Ltd produces mostly fruit drinks, iced teas, snacks and dairy products. TGI is owned by a European family. In August 2014, Coca-Cola said it would invest US$5 billion with African bottling partners in new manufacturing lines and equipment, as well as safe water access programmes, over 6-years.

[Reuters 30/01/16]

Senegal Senegal Produced 30 Million Chickens The poultry sector in Senegal is on an upward trajectory after more than 30 million chickens and 600 million eggs were produced through the course of 2014 according to the Minister of Livestock and Animal Production. This performance came as a direct result of a ban on the importation of poultry products which has been in force in Senegal since 2012.

[APA 14/02/16]

24

COMMODITY NEWS

FOODSTUFFS & BEVERAGES South Africa Johannesburg Stock Exchange Launches Beef Futures With a national count of 13 million cattle and some 2.2 million butchered annually the Johannesburg Stock Exchange [JSE] launched the Beef Futures as a commodity for chilled beef carcasses. Industry players like Meatco, a major buyer of livestock and processor of beef, can use the beef carcass contract listed on the JSE for price risk management purposes. The beef instruments being proposed are derivative instruments given by the listing on the JSE. The launch of the Johannesburg Beef Futures contract could help reduce risk for the Namibian beef industry as the Namibian Stock Exchange [NSX] does not have a derivatives market, only an equities market.

[Namibian Economist 29/01/16]

BEEF FUTURES -- To consist of 2-sides per carcass, graded as A2/A3 and having conformation of 2, 3, 4 or 5, a damage class of not more than 1 on either the buttock, loin or fore-quarter, and no measles, in terms of the national beef grading guidelines.

-- Carcasses to comply with minimum dressing standards -- Must be fit for human consumption. De-boned carcasses shall be considered only in instances where it is possible to work back the original carcass price.

-- One contract will equal a contract size of 1000 kg.

-- Expiry dates and time will be the second Wednesday of the expiry month at 12h00.

-- 4-main hedging months to serve as contract months: March, June, September and December.

South Africa Considering EU Poultry-Import Safeguard Measures South Africa is considering safeguard measures on imports of frozen bone-in portions of chicken from European Union [EU] member states. Economic Development Minister Ebrahim Patel has instructed the nation’s International Trade Administration Commission [ITAC] to investigate an application by the South African Poultry Association [SAPA] to impose measures in terms of article 16 of an agreement on trade, development and cooperation with the EU. The section states that if imports of products cause or threaten to cause disturbance in the markets of the other party, the Cooperation Council, which oversees the implementation of the trade deal, will consider the matter to find a solution.

According to SAPA imports of bone-in chicken portions from the EU are threatening to cause a serious disturbance in the South African market. South Africa imposed anti-dumping duties of 3.9% to 73% on imports of frozen bone-in chicken from some companies in Germany, the Netherlands and the U.K. last year. In December, the government published regulations allowing for an annual quota of 65,000 MT of bone-in poultry portions not subjected to anti-dumping duties from the U.S. as part of an agreement to ensure the nation maintains preferential access for its farm goods to the world’s largest economy.

[Bloomberg 19/02/16]

South Africa Ready For 60,000 Tonnes Of US Poultry The Association of Meat Importers and Exporters of South Africa says that it is ready to handle 60,000 tonnes of poultry currently on its way to South Africa from the United States. The poultry is being brought to South Africa as part of the African Growth and Opportunity Act [AGOA], which gives the US access to South African markets and allows South Africa duty-free access to certain US markets.

South Africa, though, has until March 15 to allow the US poultry products into the country or face losing its AGOA benefits. South Africa last year raised concerns over health issues with regards to US meat and poultry products being brought in and refused to allow the products in until the health issues were resolved. The US, though, threatened to suspend South Africa’s AGOA membership if the country did not speed up the meat and poultry imports. The health issues were later resolved and South Africa has been given until March 15 to allow the poultry products into the country. Shipments are expect to arrive early March meeting the deadline.

[iafrica17/02/16]

25

Tanzania Tata To Increase Exports Of Pulses Tata Africa Holdings [Tanzania] Ltd, a subsidiary of Tata International, has plans to increase exports of pulses to India. So far, the company has achieved an export volume of 5,000T of pulses and now plans to scale up the business. Tata will invest in procurement centres, processing plants, cleaning plants and even pre-packaging facilities.

Aside from pulses, the company is also exporting cashew, sesame and coffee from Uganda. The company’s goal is to focus on 4-key commodities initially, before moving on to other products like cocoa and rice. Specifically, India and China are good markets for African food commodities. Eventually, more countries will be part of the export plan as the company now operates in 12 African countries. The company’s African business constitutes about 25% of Tata International’s total turnover, with agri commodities expected to bolster growth in the coming years.

[African Farming 04/01/16]

Zambia Goldenlay Agri Limited To Build Poultry Processing Unit Zambian Goldenlay Agri Limited is planning to build a poultry processing plant in Luanshya for US$560,000. The facility will rear spent hens. The company has plans to increase the capacity of poultry production to one million birds, for the production of eggs at Kafubu and Baluba farms. The project is expected to span 20 years, to include construction of the facility as well as a chicken processing plant shed, installation of a 750kV transformer, effluent management, waste disposal and cold storage infrastructure.

[African Farming 06/01/16]

Zimbabwe Zim to Tax Imported Food Commodities The Zimbabwean government has widened its tax bracket to include Value Added Tax [VAT] on nearly 40 imported basic food commodities as the country’s revenue performance continues to disappoint. In a recent Government Gazette of January 22, Finance Minister Patrick Chinamasa, amended Section 78 of the VAT Act by repealing clauses that until now allowed the imported food commodities to be taxed at zero rate. The tax is effective from February 1st.

[News 24 04/02/16]

26

COMMODITY NEWS

FRUIT & VEGETABLES Regional WAO Becomes First Global Entity For Avocados Some of the world’s leading avocado producing nations have formed the first global entity for the offering, known as the World Avocado Organisation [WAO]. The new body will promote the consumption of avocados across Europe, Asia and other parts of the world through collectively self-funded marketing programmes. WAO will be headquartered in the US, with Brazil, Mexico, Peru and South Africa joining as founding members.

[Fruitnet 08/02/16]

Kenya EU Funds Banana Processing Plant The European Union [EU] has given the Taita Taveta government a Sh100 million grant to set up a banana processing plant.

According to the Department of Agriculture County, the plant will achieve a turnover of 1-billion shillings annually when it reaches full capacity.

[Ecofin 22/02/16]

Lab Re-Accreditation Boost For Horticultural Exports Kenya’s State laboratory has been given permission to test for chemical pesticide residues, which could mean a major boost for Kenyan horticultural exports. The Kenya Plant Health Inspectorate Service said its Analytical Chemistry Laboratory was given a clean bill of health to test produce destined for major markets such as the European Union [EU], where Kenya exports most of its fruits and vegetables. The lab was re-accredited by the South African National Accreditation Service [SANAS]. This will help Kenya’s exports such as beans and peas which are exported with pods, to pass the increased scrutiny on pesticides in the EU market. Several Kenyan horticultural products which have been under increased scrutiny recently for their high level of pesticides will now get quality assurance before export.

[RW Freight 03/02/16]

27

Morocco Hard Times For Tomato And Citrus Production Morocco’s 2-main agricultural export products, tomatoes and citrus fruit, are losing ground. Citrus fruit has seen its export share compared to volume produced fall to 25% from 40% 5 years ago. Moroccan citrus has been banned from entering the USA by health authorities. Officially, the ban is due to health reasons [a cargo of clementines containing larvae from Mediterranean fruit fly] but some believe it to be a protective measure for Californian oranges and clementines. Meanwhile, it will be harder to stock European shelves with Moroccan citrus fruit as the warm temperatures in Europe have led to a higher European production.

Buying power in some European countries has decreased and the price of tomatoes at export is now between €0.35-0.45/kilo, but to be profitable they need to reach €0.60/kilo.

[Fruit Plaza 26/01/16]

Idyl Melon Harvest Begins The melon season has started for Idyl melons grown in Morocco. Their first Cantaloupe crop is now being harvested. The Idyl melon is recognisable by its sticker that carries the brand logo.

[Fresh Plaza 17/02/16]

Fruit & Vegetable Exports To Reach 1.6 Million Tons Morocco expects its citrus exports to rise from 1.3 million tonnes to 1.6 million tonnes at the end of the current campaign as a result of increased demand of Moroccan fruit and vegetables in both Russian and Canadian markets.

The l’Établissement Autonome de Contrôle et de Coordination des Exportations [EACCE] explained the rise following the success of a diversification policy extending export destinations.

Citrus sales stood at 350,000T by January 2016 an increase of 27% compared to the same period last year. By the end of the current export season in May total export volumes are expected to be 550-600,000T compared to 480,000T last year. Exports represent about 25% of the production, which according to the Ministry of Agriculture and Fisheries is expected to reach 2.2 million tonnes this year.

The main reason for the increase in citrus exports has been the larger volume of shipments to Russia, which purchased 155,000T or 44% of total exports.

Moroccan citrus regained attractiveness in the European market, where 108,000T have been shipped by the mid-season, compared to the 80,000T last year. Meanwhile citrus exports to Canada increased 24% and doubled to Gulf States hitting 100,000T. Exports to the U.S. dropped by 20%.

[Ecofin 04/02/15 & Fresh Plaza 12/02/16]

28

COMMODITY NEWS

FRUIT & VEGETABLES South Africa Positive European Apple Market Despite challenging growing conditions in some of the major production areas, the estimate of topfruit exports from South Africa is expected to increase slightly by 3% for both apples and pears. The main driver are new plantings coming into commercial volumes and the Langkloof production area yielding a normal harvest for the first time in more than 3 seasons. The European market is looking positive this year as the sizing of apples and pears are small liked by the market. Traditionally the UK has been the top export market for South African apples but in recent years Africa has caught up, it even over took in terms of volumes a couple of years ago.

[Fresh Plaza 17/02/16]

Grapefruit Volumes Halved Hoedspruit and Letsitele, where about 60% of South Africa’s grapefruit is grown, is in a serious drought situation, to add to the woes of the growers the area was also hit by hail last November which has made predictions for the coming season even lower.

Some growers will see losses averaging around a 30-50% drop in volumes with some seeing a total loss.

[Fruit Plaza 18/02/16]

Sudan Banana Industry To Get Export Packing Centre Sennar State in Sudan provides most of the country’s bananas, yielding 15,000T in 2014 and exporting 20,000T bringing in US$6 million. Banana production is now expected to increase further in Sabonaby Village, as the Sudanese Center for Exports Sterilization has revealed plans for a banana packing centre for export, to be opened next March with a daily capacity of 100T.

Zimbabwe Government To Introduce Vegetable Tax According to the just released Statutory Instrument 9 of 2016 [Section 78 of the Valued Added Tax Chapter 23:12], the Zimbabwean government plans to impose tax on vegetables, mineral water and fruits, among other produce, starting February 1, 2016. Financially hardpressed, President Mugabe’s government, has introduced the Value Added Tax [Vat] on imported vegetables. Some of the vegetables now liable for taxation include cucumbers, carrots, mushrooms, garlic, lettuce, cabbages, cauliflower, rape, kali, pumpkins and squash.

[radiovop.com 01/02/16]

29

COMMODITY NEWS

PALM OIL

Regional French Government Propose Palm Oil Tax The French Senate on 21st January adopted Amendment No. 36 to a proposed law on biodiversity, which will impose progressive taxes on palm oil, palm kernel and food containing such oils. It is proposed that taxes be applied on these products, beginning at US$335/ton in 2017 and gradually increasing to a rate of US$1000/T in 2020 and further increased annually, while leaving taxes on other vegetable oils such as olive, corn and peanut oil practically untouched.

To give some perspective, the selling price of palm oil is only US$610/T. The proposed tax will be imposed on producers in France, on importers and persons selling those products in France from either other EU members or outside the EU. Since palm oil in the EU is entirely imported, it is not difficult to appreciate that the proposed tax has caused great concern among palm oil-exporting countries.

[Jakarta Post 10/02/16]

30

COMMODITY NEWS

SUGAR

Global EU Sugar Exports To Miss Quota The European Union [EU] is likely to miss its sugar export quotas this season as a reduced harvest limits overseas sales, according to commodities trader Group Sopex. The region will probably ship less than 1 million MT in the season that started in October less than the 1.35 million MT quota established by the EU under World Trade Organization [WTO] rules. Licenses have been issued to export 650,000 MT so far.

Sugar production in the EU will fall 23% in 2015-16 to 14.9 million MT, the European Commission, the bloc’s regulatory arm, estimated in December. Dry weather in parts of Europe and smaller areas planted with beet mean some countries will produce less than they are allowed under EU rules. The drop in EU production is the main driver of a 7 million MT shortage forecast for the global market this season. Estimates for the first deficit in 5-years boosted raw sugar futures, which gained 5% last year after four annual losses. The commodity was the third-best performer in the Standard & Poor’s GSCI gauge of 24 raw materials last year after cocoa and cotton.

The EU, once a net sugar exporter, has spent years cutting output after the WTO ruled it was dumping subsidized sugar on world markets. That left part of the bloc’s demand to be met by imports brought in under trade agreements either free of duty or at a reduced levy.

A drought that’s cutting production in southern Africa and northeast Brazil may mean EU sugar imports from nations that benefit from preferential agreements will be lower than the commission expects. A smaller crop in Mauritius and a slow start to the harvest in Jamaica may also mean fewer duty-free imports. The quota for Brazilian sugar at a reduced duty probably won’t be completely filled.

31

The EU will probably need to take exceptional measures to bring in more imports at zero duty and allow local producers to sell more of their output in the domestic market. This will need to be done to avoid the bloc ending the season with “too low” stockpiles, he said.

[Bloomberg 31/01/16]

Dubai Sugar Conference The 2016 Dubai Sugar Conference was held 30th January to 2nd February bringing together some 400-key industry players from more than 40 countries. During the opening session it was noted that the global sugar market is set to face its first shortage in 5-years, making sugar one of the most lucrative agricultural commodities.

Production will trail consumption by about 2.5 million tonnes in the season that started in October, reversing surpluses from the previous 4-years. Meanwhile futures traded in New York have fallen 14% this year partly as investors pulled out of commodities.

Sugar was one of the few commodities that rose last year after a surplus of everything from grains to metals to oil sent prices falling the most since 2008. Prices increased 5% in 2015, the 3rd-best performance in the Standard & Poor’s GSCI index of 24 raw materials after cocoa and cotton. Tightness in sugar supplies is already being felt in the market for refined sugar, where its premium over raw sugar rose to a 5-month high.

The so-called white premium is widening on stronger Chinese demand and El-Niùo-induced delays to crops in Central America, and is also increasing profits for refiners. China brought in a record 4.8 million tonnes of sugar last year and imports in 2016 could remain big as long as it’s profitable for refiners.

For further information please view www.dubaisugarconference.com

Regional Sub-Saharan Africa To Shift Sugar Sales As EU Quotas End 2017 Sub-Saharan African sugar producers are to shift sales to growing regional and domestic markets when exports to the European Union become less attractive after production quotas are dismantled in 2017, industry sources and analysts said. EU sugar production is forecast to expand when quotas are lifted after September 30th 2017, diminishing import needs.

To counterbalance there are expectations of rising regional consumption in Africa. Particularly access to the high-value preferential markets in the East African region on preferential terms established through various regional free trade arrangements.

Rabobank estimates sugar production in sub-Saharan Africa in 2014 at 7.5 million tonnes with an average of 18% of output had been exported to the EU in recent years. The key exporters to the EU include Swaziland, Mozambique, Zimbabwe, Zambia and Mauritius. But with a growing population and continuing urbanisation, Sub-Saharan Africa is set to see a significant rise in sugar consumption in the coming years. Any decline in future import demand from the EU may not, therefore, necessarily be bad news, although the preferential access terms and generally higher prices in the EU market have made it an attractive destination for sales.

[Reuters 06/02/16]

32

COMMODITY NEWS

SUGAR South Africa

Associated British Foods Offers To Buy South Africa’s Illovo Sugar South Africa’s Illovo Sugar has received a non-binding expression of interest from its largest shareholder Associated British Foods in buying remaining shares. AB Foods, which holds a 51.35% stake in Illovo, intends to make an offer of 20 rand [£0.8593] per share for the stake it does not yet hold, in a deal worth around 4.1 billion rand [£176.16 million pounds]. Illovo, which has been cutting costs to survive low sugar prices, said ABF plans to make a cash offer to all other shareholders but there was no certainty of a deal.

[Reuters 08/02/16]

Illovo Sees Dip In Sugar Output Africa’s largest sugar producer, Illovo Sugar, is expecting sugar production to drop for the 2015/16 season due to drought together with a significant drop in cane yield. Production will fall by more than 20% compared with the 586,000T produced last year to 468,800T this season down 117,200T. During the last season Illovo reduced its cane production from 2.344 million tons to 2.013 million tons. Despite the drought it has enough stock in reserve to keep supplying the market with sugar. The South African Sugar Association [SASA] sees 2015/16 sugarcane output down at 14,861,390T and sugar output of only 1,634,446T according to its December estimate.

[IOL 05/02/16]

Uganda Sugar Deal Flops On Shortfall The sale of Ugandan sugar in Kenya has flopped due to lack of sugar surpluses in the neighbouring state forcing Kenyan authorities to withdraw import licences. Ugandan sugar millers have been hit by a shortage that has seen leading factory Kakira Sugar Works produce less than 100,000 MT out of the projected 180,000MT. Kenya’s Sugar Directorate said it has cancelled a number of permits issued to some traders after they failed to secure sugar from Uganda within the stipulated time. The permit normally allows traders to import sugar within 45 days, failure to which it is revoked. However, a trader can seek a few days extension if they provide valid reasons. Kenya has not received any Ugandan stocks in the past 2-months for the permits issued in November.

President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni struck a deal in August last year under which surplus Ugandan sugar would be exported to Kenya to help bridge the annual shortage. The agreement triggered a storm with Members of Parliament saying such imports could depress local producer prices making it impossible to revive struggling millers such as Mumias Sugar Company.

Uganda had been locked in a trade dispute with Kenya since 2011 when claims emerged that traders from the landlocked State were simply re-packaging cheap sugar from the regional trading bloc, Common Market for Eastern and Southern Africa [COMESA] for resale in other East African markets. The feud saw Kenya slap a ban on Uganda sugar imports in October 2012, later replaced by stringent vetting of consignments that took up to three months before shipment permits were issued. The two states reviewed the processes and procedures of issuing licences for Uganda sugar imports to a maximum 14 days 2-years ago.

Uganda has been selling sugar to Kenya under the COMESA and the East African Community [EAC] Customs Union rules. Kenya depends on regional states to bridge the shortage by allowing importation of 200,000 MT to meet the difference. Kenya produces about 600,000 MT annually against a requirement of 800,000 MT. COMESA has handed Kenya a 1-year extension of a restriction on regional duty-free sugar imports, which limit the entry of sugar into the country to 300,000 MT. The safeguard was first put in place 2000 and expires in March next year.

Conditions for the Comesa safeguards include privatising State-owned mills, researching on new early-maturing and high sucrose content sugarcane varieties and adopting them, and paying farmers on the basis of sucrose content instead of weight. Other Comesa member states outside the East Africa Community where Kenya acquires sugar are Egypt, Zimbabwe and Swaziland.

[East African 08/02/16]

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COMMODITY NEWS

TEA

East Africa Tea Sales Increase To Post-Sanctions Iran East African tea exports to Iran are expected to jump more than six fold by 2019 as trade ties normalize after western sanctions were lifted. The East African Trade Association [EATTA] noted shipments are likely to climb to 20,000 MT within the next 4-years from a record low of 3,200 MT last year. Iran seeks good quality tea and is among the world’s 10 biggest tea-consuming nations estimated at 83,400 MT in 2013.

Most of the tea produced in East Africa is sold at the Mombasa auction, the world’s largest market for the leaves. The weekly sale handled 358.6 million kg in 2015, compared with 390.2 million kg in 2014. It competes with the Colombo auction, which traded 315.5 million kg last year, compared with 333.5 million kg in 2014. The average auction price of tea sold in Mombasa rose 34% to US$2.73/kg last year. But with increased exports to Iran that should translate to a corresponding increase in tea prices.

The EATTA exported 40,000 MT to markets including Pakistan, Egypt and the U.K.. Iran has the potential to be among the top 5-key export markets.

[Bloomberg 12/02/16]

Burundi Annual Tea Revenue Jumps By 52% According to the Burundi Tea Board [OTB] tea export revenues jumped 52% in 2015 from a year earlier, thanks to a fall in output of regional rival Kenya. Tea output in Kenya, the world’s leading exporter of black tea, fell by 10% last year, mainly because of dry weather conditions. The average export price per kilogram climbed to US$3.09, against US$2.17 in 2014. OTB, which exports 80% of its tea through a regional weekly auction held in Mombasa, said tea export revenue totalled US$32.4 million last year, up from US$21.3 million in 2014, with export volumes rising by 6.6% to 10,495T.

[Reuters 17/02/16]

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COMMODITY NEWS

TEA Kenya

Earned Sh125b From Tea In 0215 Kenya earned US$1.2 billion [Sh125.5 billion] from tea exports, a 23% increase from the Sh101 billion raked in from the sector in 2014. Data from the Tea Directorate attributes this to a 10% drop in tea production during the year to 399 million kilos from 445 million kilos in 2014. The lower production was due to dry weather in tea producing areas in the first 5-months of 2015. Earnings were also boosted by a weak shilling, with a kilo of tea retailing at an average of US$2.98 at the Mombasa tea auction. In 2014, tea averaged US$2.16/kg at the auction. Favourable prices saw smallholder tea farmers earn Sh43.3 billion from tea, up from Sh35.6 billion in 2014.

According to the Tea Directorate, tea was primarily exported to 68 markets. Pakistan was the biggest importer of Kenyan tea accounting for 26.2 percent followed by Egypt [17.4%], the United Kingdom [10.1%], Afghanistan [9.3%] and the United Arab Emirates [8.5%]. The directorate is working on efforts to grow exports to emerging markets such as Poland, Somalia and Nigeria that have shown great interest in Kenyan grown tea.

Looking ahead, the Tea Directorate plans to introduce a US$4.4 million [Sh450 million] cash subsidy to be used by the Kenya Tea Development Agency [KTDA] to assist farmers. The directorate also plans to introduce an electronic auction system to promote transparency and accountability at the tea auction.

[Citizen 17/02/16]

Tea Auction Sees Volumes Increase Tea from Kenya and Rwanda fetched the highest prices at the latest Mombasa tea auction, which recorded an increase in volumes. Kenya trailed Rwanda in average auction price where Rwanda’s tea posted the highest average price of |US$2.66 [Sh270.84] across 9-grades, beating 7-other countries who offered their tea for sale. Kenyan tea was second with an average price of US$2.51 [Sh255.57] followed by Burundian tea which sealed the top three slot in terms of prices with US$2.48 [Sh252.51].

BP1 / kg

PF1 / kg

PDust / kg

Dust 1 / kg

Rwanda

$2.94 [Sh299.35]

$2.75[Sh280]

$2.64 [Sh268.81]

$ 2.81 [Sh286.12]

Kenya

$2.81 [Sh286.12]

$2.59 [Sh263.71]

$2.48 [Sh252.51]

$2.69 [Sh273.90]

The overall auction average price remained at US$2.39 [Sh243.35] for the second consecutive week after dropping from US$2.42 [Sh246.41]/kg. It however remains above the US$2.29 [Sh233.17] recorded in a similar sale last year. The East Africa Tea Trade Association [EATA] attributed Rwanda’s favourable prices to its low quantities. Total volume of tea traded increased to 8.05 million kilos from 7.2 million kilos. Yemen, other Middle Eastern countries, Afghanistan, Sudan, Kazakhstan and other CIS states [Commonwealth of Independent States] showed strong support with more interest from Russia, Bazaar and Iran.

[Star 20/02/16]

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COMMODITY NEWS

TIMBER

Central/West Africa Threatened Rosewood Species Gets CITES Protection Over the past few years, West Africa has become one of the largest tropical log exporting regions feeding the growing demand for luxury furniture in Southeast Asia. Demand is booming in China and, to a lesser extent, Vietnam for furniture and other goods made from hongmu, or rosewood, a term used to refer to a wide range of richly hued tropical hardwoods from Africa, Asia and Latin America that belong to the genera Dalbergiaand Pterocarpus.

This month the Secretariat of the Convention on Trade in Endangered Species [CITES] officially announced the listing of the West African rosewood species Pterocarpus erinaceus on Appendix III of the Convention, meaning that all international trade in the species will be subject to international regulation. The listing will take effect on May 9 and will require all international shipments of kosso to be accompanied by CITES documentation. Most crucially, the listing means China and other hongmu consumer countries will now be able help stem the flow of illegal kosso by demanding evidence of legal origin. Chinese officials have pledged to step up efforts to enforce CITES legislation.

Most West African countries have already banned the cutting and export of these trees, but the destination country for the majority of the illicit trade — China, which saw its rosewood imports increase some 1,250% since 2000 — is completely unprepared to play its part by curbing illegal hongmu imports. In the absence of effective timber trade controls and regulations in China,” the EIA reported, “domestic legislation and enforcement actions in Hongmu source countries have completely failed to control this illegal trade.” The EIA found that imports of kosso logs into China increased about 500-fold by value and volume over the past six years. In the third quarter of 2015, approximately 42 percent of the value and 65 percent of the volume of China’s hongmu log imports came from West Africa.

[Eco Business 18/02/16]

SENEGAL The CITES Appendix III listing for kosso was proposed by Senegal. Senegal adopted a complete ban on export of kosso logs in 1998, and the Senegalese government has attempted to combat the illegal trade. But with the active involvement of rebel forces from the Casamance region kosso continues to be smuggled out, usually to neighboring countries like Gambia before being shipped to China.

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COMMODITY NEWS

TIMBER

EU Imports Of Tropical Veneers Rise In 2015 EU imports of tropical veneers increased by 7% to 257,700m3 in the first 11 months of 2015, with growth driven primarily by rising trade between Gabon and France.

Growth in volume was matched by a 6% increase in value to €162 million. EU imports from Gabon increased 13% to 126,300m3 during the first 11 months of 2015.

Since Okoumé log exports were banned by Gabon in 2010, the southern European Okoumé plywood sector – now much diminished – relies more heavily on imports of veneer.

Demand for Okoumé plywood has picked up in Europe in 2015 due primarily to recovery in the Netherlands building industry and slow improvement in the French market. The French company Rougier which produces Okoumé veneers and plywood in France and Gabon, booked an 11.8% increase in revenues in its European business during the first 9-months of 2015 and reports an improved economic climate in Europe.

In addition to Gabon, EU imports of tropical veneer also increased during the first 11 months of 2015 from Cameroon [+16% to 27,100 m3], Congo [+2% to 14,500 cu.m], and Ghana [+22% to 8,600 cu.m]. However imports from Ivory Coast declined 3% to 60,800 cu.m. Imports into France and Italy, now the largest EU markets for tropical veneer, both registered double-digit increases between January and November 2015, rising 14% to 104,791cu.m and 16% to 60,737m3, respectively. There were also significant increases in imports by Greece [+25% to 14,467 cu.m] and Romania [+43% to 14,034 cu.m]. Of the five largest EU markets for tropical veneer, Spain [-16% to 32,411 cu.m] was the only to report declining imports in the first 11 months of 2015. However imports also declined into Germany [-17% to 12893 cu.m] and Belgium [-47% to 6343 cu.m] during the period. The German veneer association IFN concluded during its annual meeting in June 2015 that veneers were increasingly becoming a niche product in the German market – a startling conclusion in a country which little more than a decade ago was at the very centre of the global veneer industry.

[ITTO 01-15/02/16]

Slow Rise In EU Demand Anticipated For the first time this year minor sawnwood price movements have been reported, otherwise most markets are quiet and prices remain unchanged. Business in Europe continues at levels normal for this time of year when the construction/building sectors are affected by winter weather. West and Central African producers anticipate a slow but upward trend in sales to markets in Europe throughout this year.

[ITTO 01-15/02/16]

Producers See Growth Potential In Mid-East Markets Purchases by buyers for the Middle East markets are of only moderate volumes as is usually the case. The sentiment amongst producers in Central and West Africa is that demand in the Middle East will remain stable with potential for growth as the year progresses, though prices in this market will be always under competitive pressure.

[ITTO 01-15/02/16]

37

Falling Timber Exports Affecting Government Revenues Heavy seasonal rains are affecting production in the region especially in Gabon and Congo Brazzaville. Anecdotal evidence suggests both Gabon and Congo Brazzaville are feeling the effects on their economies of the lower level of timber exports which, in the past, generated substantial revenues from taxes and export levies. Analysts point to a slowing in large infrastructure developments such as new roads and buildings as evidence of declining government revenues.

[ITTO 01-15/02/16]

No Interest In Small Diameter Okoume Logs Buyers for the Chinese market are on the sidelines due to the holiday period but there have been reports of small purchases of selected species but no-one is interested in large volumes of okoume. Sales of okoume logs are limited to high quality and larger diameter logs at low price. There is absolutely no interest on the part of buyers in small and lower quality okoume logs. It is not clear when or even if there will be revival in China’s imports beyond the small volumes traded at present.

There have been suggestions that the species mix for the Chinese market may be changing towards a different range of lower cost timbers. Business in Middle East markets has, so far, not been affected by the declines in oil export prices which must be denting the reserves of oil exporters.

[ITTO 01-15/02/16]

Ghana First FSC teak from Ghana This year Form Ghana reached a milestone in plantation forestry with the first harvest of 3,000 m3 of teak from FSC certified plantations near Akumadan, the capital of Offinso North. The teak plantations are managed by Form Ghana and have been certified since 2010. The plantations have been established and are managed with the help of Form International in the Netherlands. The vision of Form Ghana is that reforestation of degraded forest land should be conducted to the highest standards for sustainable forest management, serving the needs of the local communities and restoring vital environmental services within an economically viable business model. The company says it plans to reforest around at least 20,000 ha of degraded forest reserve in Ghana, so far 7,000 ha has been planted.

[ITTO 01-15/02/16]

Finnish Delegation Discusses Investments Ghana’s forest resource may soon receive a boost following a meeting between the Minister for Lands and Natural Resources and a business delegation from Finland. Minister Nii Osa Mills emphasised the country’s forest potential with the visiting delegation. The Minister said, though the country has lost much of its forest cover due to illegal mining activities, slash-and-burn agriculture and over-cutting for fuelwood efforts are being made on reforestation. Ghana had over 8.2 million ha of forest cover, but this is currently estimated to be only 4.6 million ha.

[ITTO 01-15/02/16]

38

COMMODITY NEWS

TOBACCO

Zimbabwe TIMB Engages Indian Firm To Automate Auction The Tobacco Industry and Marketing Board [TIMB] has engaged an Indian firm to automate the auction system as it moves towards reducing side marketing and illegal sales. Electronic auctioning is only done in India and Malawi while the rest of tobacco farming countries use the contract system. In Zimbabwe, 70% of tobacco is sold through auction. Indian technicians are in Zimbabwe accessing requirements for the marketing system to be rolled out.

Zimbabwe, one of the major producers of tobacco in Africa has 3-main auction floors. Electronically tagging individual farmers’ details on their bales will go far in reducing side-marketing, illegal sales and theft. Electronic auctioning of tobacco will reduce the processing time for grower payments and eliminates illicit floor activities, for example ticket tampering. The e-marketing system will also ensure that the buying process is transparent and will provide buyers with real-time data to tally bales when they reach the dispatch section of the sales floor.

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There has been positive responses from stakeholders in the industry. TIMB and Agritex are currently ascertaining the crop size for this year which could be in the region of 170-180 million kg. In 2015 Zimbabwe produced about 200 million kg, down from 216 million kg a year earlier.

[Herald 04/02/16]

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