COM-WATCH
AFRICA
ISSUE 60 | MAY 2016
A NEW GENERATION OF CONTAINERS DEDICATED TO LIVE SEAFOOD Full Story On Page 3
African Governments Urged To Invest In Cashew Industry
07
Sugar Growers Unprepared For EU Import Quota End
30
Zimbabwe: Tobacco Farmers Earn US$3.6 Million
38
COM-WATCH
AFRICA
ISSUE 60 | MAY 2016
Contents 03 | Corporate
CMA CGM Offers New Option In Perishables Sector, Launches New ‘AQUAVIVA’ Container Dedicated To Live Seafood / CMA CGM Industry Reference In Reefer Transport / CMA CGM Launches AQUAVIVA At ‘Seafood Brussels 2016’
07 | Cashew, Groundnut & Shea
Regional: African Governments Urged To Invest In Cashew Industry / USAID West Africa, GSA To Partner With Private Sector Burkina Faso: Olvea Boosts Shea Butter Output Ghana: Cashew Export Ban Lifted / Largest Cashew Processor In Brong-Ahafo Shut Down / Government To Outline Measures To Improve Cashew Production Guinea Bissau: Cashew Farmgate Price At US$0.61/Kg Nigeria: Cashew Group To Build International Brand For Products
11 | Cassava
Cameroon: Second Processing Plant For Ngoulémakong / Agro Resources To Invest FCFA 26 Billion In Processing Tanzania: Cassava To Boost Export Earnings
12 | Cocoa
Regional: Ivorian Stock Exchange MELX Sets Sights On Cameroon Cocoa, Coffee / Olam Sees El Nino-Hit Cocoa In Biggest Deficit In 30 Years Cameroon: Cargill Aims For 30,000 Tonnes Of Certified Cocoa In 2015-2016 / IFC Invests Funds In Cocoa Economy / Arysta Lifescience Cameroun Offers 200,000 Seedlings To CICC Program / April Prices Remain Steady Cote d’Ivoire: Mid-Crop Cocoa Harvest Hit By Poor Weather / Production Set To Decline In 2016 / Farmers Hit By Price Dispute & Poor Bean Size Ghana: Touton Cocoa Company To Increase Production / 60 Million Seedlings To Be Distributed
17 | Coffee
Kenya: Uhuru Waives Coffee Licensing Fees / Price Declines By 19% At Mombasa Auction / H1 Earnings Fall 9% On Lower Volumes South Africa: Nestlé South Africa Invests R1.2bn In KZN Coffee Plant Uganda: Uganda Will Not Tax Imported Coffee / URA To Electronically Track Coffee / Exports Fall 6.4% In February 2016
19 | Cotton & Textiles
Regional: Brazil Assesses Progresses Of Cotton-4 Plus Togo Project / Chinese Cotton Sends Prices Tumbling Burkina Faso: 2015-16 Output Down 18% / GM Cotton Banned Cote d’Ivoire: Cotton Output Falls 31% Mali: Increased Prices, Subsidies To Aid 2016-17 Crop / BOAD Gives US$54.8 Million To Textile Company / 2015-16 Cotton Output Falls Due To Late Rains Mozambique: Cotton Prices Set For 2015-16 Senegal: February Cotton Output Drops By 4.2%
22 | Fish
Gambia: FAO Formulate 5-Year Fisheries Plan Mauritania: Fishing Plans Stifled By Poor Infrastructure
1
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.cma-cgm.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
Regional: Soybean Value Chain Launched / Africa Injects US$15 Billion In Wheat Imports Each Year Morocco: Dari Couspate Invests €4.5 Million In Salé Plant / Ramadan Sees Pulse Imports Up Nigeria: Olam To Invest US$150 Million In Poultry Sector / Intensifies Dairy Talks With Denmark’s Arla Foods / Nestle’s US$28 Million Abaji Water Factory Inaugurated South Africa: AB InBev Strikes Deal Easing Way For Tie-Up / Bidvest’s Food Africa Unit To List Separately On JSE / Danish Expertise To Boost Agricultural Sector / Indonesia Grants ‘Country Of Recognition’ Status For Horticultural Products / Increases Wheat Import Duty By 34% Zimbabwe: Horticultural Imports To EU
27 | Fruit & Vegetables
Morocco: Onions Imported To Combat High Prices Senegal: Creating A Brand For Mangos South Africa: R120m Programme To Support Emerging Fruit Farmers / Shipping Of Organic Lemons To Europe Suspended / Sharon Fruit Season Off To Promising Start
29 | Palm Oil
Ghana: Palm Oil Export Plunges
30 | Sugar
Regional: Africa Sugar Growers Unprepared For EU Import Quota End / 6th African Sugar Conference Seeks New Alternatives To Export Sugar Mozambique: Drought Affects Sugar Production South Africa: Illovo Sugar Says AB Foods To Buy Remaining Stake
32 | Tea
Kenya: Kenya Reviews Tea Tax / EATTA Focused On Mombasa Auction Automation / IFC To Improve Yields With US$4.2 Million
33 | Timber
Central/West Africa: Sawn Bubinga Stocks May Be Licensed For Export / Plywood Buyers Seeking High Quality Panels / Demand In China And EU Moves Ahead / Slight Up-Tick In Interest From Buyers For The Chinese Market Angola: Wood Production Reaches 125,000 Cu.M In 2015 Cameroon: Considering Total Log Export Ban / Main Tropical Producer Countries Extend Their Market Dominance Congo: Production Remains Modest Gabon: Gabon Introduces Restrictions On Air Dry Sawnwood Exports Ghana: Sawnwood Dominated 2015 Export Performance / Joint Team Review Ghana Timber Trade Agreement / UNIDO Training For Timber And Furniture Lab Kenya: Kenya To Plant 20 Million Trees To Reverse Deforestation South Africa: Competition Between African And SE Asian Timber Heats Up
38 | Tobacco
Malawi: Prices Hit US$1.84KG / Price Disagreements Cause Tobacco Market Closure Zimbabwe: Tobacco Farmers Earn US$3.6 Million
2
COMMODITY NEWS
CORPORATE
CMA CGM Offers New Option In Perishables Sector Launches New ‘AQUAVIVA’ Container Dedicated To Live Seafood CMA CGM has launched AQUAVIVA, a new generation of container which allows for the safe carriage of live lobsters. The development of this global innovation is the result of 4-years research between CMA CGM’s Reefer experts and EMYG Environnement & Aquaculture. EMYG is an engineering specialist in water purification and filtration. This collaboration resulted in the development of the INNOPURE®, a unique technology which preserves the water’s oxygen level and quality, providing a natural filtration system. This partnership will continue to allow for the maritime transportation of other live seafood. Previously lobsters were carried either frozen by sea or alive and on ice by costly airfreight. With the launch of the new AQUAVIVA container, they can now travel by sea in optimal conditions maintaining their natural habitat. Lobsters are carried in optimal conditions during the whole transport process within their natural water, from the area of fishing to arrival at the wholesaler/ restaurant. This advanced system guarantees first-day freshness and quality even over long term conservation/transport. The new container serves as an aquarium recreating the natural habitat of species such as lobsters. A 40’ container can hold up to 9,000 live lobsters with mortality rates close to zero compared to 18% for this type of product when it is shipped by air. This mode of transport relies on 3-major characteristics that: -- Replicates lobsters’ natural living conditions. -- Guarantees the water’s optimum temperature during transportation thanks to CMA CGM’s Reefer expertise. -- Preserves the water’s oxygen level and quality due to INNOPURE® and its natural filtration system.
“
Filled with sea water maintained at the right temperature using CMA CGM’s reefer technologies, these new containers recreate the lobsters’ living conditions and natural habitat. Each animal has its own space, just like they would while resting under a rock on the ocean floor.
”
Alexis Michel, Senior Vice President, Group Procurement, Containers Logistics, Intermodal & Reefer
3
Live Lobsters Supply Chain With AQUAVIVA
AQUAVIVA Advantages Door-to-door service
New alternative to both freezing and costly airfreight
Respectful to the environment
Guarantees first-day freshness and quality even over a long term conservation
Maintains natural lobster habitat
AQUAVIVA Resources Download our dedicated AQUAVIVA brochure at:
http://www.cma-cgm.com/static/ Communication/Attachments/ CMACGM_Aquaviva_Brochure.pdf
For detailed information on AQUAVIVA view our video:
View CMA CGM’s environmental policy at:
http://www.cma-cgm.com/productsservices/aquaviva-live-seafood
http://www.cma-cgm.com/thegroup/corporate-social-responsibility/ environment
4
COMMODITY NEWS
CORPORATE
CMA CGM Launches AQUAVIVA At ‘Seafood Brussels 2016’ Held annually at the Brussels Expo, Seafood Expo Global is the world’s largest gathering of business stakeholders involved in seafood processing and trade. Held over 3-days, 26-28th April, a total of 1,664 exhibiting companies from 80 countries, including 73 national and regional pavilions exhibited. National pavilions representing Africa included Mauritania, Morocco, and Senegal and Tanzania and Uganda attended for the first time. CMA CGM participated in the show by hosting a stand and used this platform to promote its advanced reefer services and launch its new AQUAVIVA system. As well as reinforcing its visibility as a trusted global transporter and promoter of environmentally friendly technologies. For further information visit the expo’s website at www.seafoodexpo.com
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CMA CGM Industry Reference In Reefer Transport -- CMA CGM is the reference for transporting refrigerated goods by containers thanks to its unique know-how -- 213,000 strong Reefer container fleet of latest generation units: high performance, environmentally-friendly and adapted to maritime and intermodal transportation. -- Advanced container technologies: guarantees optimized temperatures, controlled atmospheres, and regulation of humidity levels. -- Network of Reefer experts in 85 countries. -- CMA CGM offers customized transport solutions with competitive transit times. -- Targeting all kind of goods: citrus fruits, seafood and temperature sensitive products. For more information on our reefer service please visit: http://www.cma-cgm.com/products-services/reefer
6
COMMODITY NEWS
CASHEW, GROUNDNUT & SHEA Regional
African Governments Urged To Invest In Cashew Industry The African Cashew Initiative [ACI] has called on African governments to invest in the production and policy development of the cashew sector, to increase economic value and enhance private investment. The ACI noted it was imperative for Africa to put in place a consistent and coherent strategy in the value chain by investing in research for the growth of the sector. A stakeholder workshop, held in April, on the theme: “Opportunities of the African cashew sector” brought together public officials from the ministries related to the cashew sector and the African Union Commission and Regional Economic Communities. Other technical partners included the African Development Bank [AfDB], Food and Agriculture Organisation [FAO], United Nations Industrial Development Organisation [UNIDO], United Nation Development Programme [UNDP], Federal Ministry for Economic Cooperation and Development [BMZ] and International Trade Centre [ITC]. In the past 10 years cashew consumption in India has doubled while Europe has grown by 30%. Africa accounts for 38% of global cashew production, but only 5% of global processing. It will be through local processing that the potential of value addition could reach US$2.8b p.a. The ACI envisages the tripling of processing volumes by 2020 working with and supporting commercial investment and private capital. To this end the ACI has introduced a Cashew Matching Fund, an effective instrument for private ownership that offers an opportunity for structured investment in the sector scaling up on activities such as farmer linkages and market information systems. To meet the demand for cashew, African production needs to grow on an average by 8-15% p.a. from now to 2018 and beyond.
[Ghanaweb 18/04/16]
USAID West Africa, GSA To Partner With Private Sector USAID West Africa’s Mission and the Global Shea Alliance [GSA] will sign a new 5-year agreement with 25 private sector shea organizations to build 250 warehouses throughout West Africa. They will also build the capacity of more than 130,000 women shea collectors and organize cooperatives that will use these warehouses to conserve and sell the nuts at higher prices directly to exporters. This model is expected to lead to the annual export of 440,000 tons of shea valued at US$132m, resulting in more than US$3.5m in increased income. With finalization in April, the agreement will scale up the GSA sustainability program by utilizing US$5.6 million in US Government contributions to leverage US$14.5m in private sector cash and in-kind contributions.
[WA Trade Hub 21/03/16]
7
Burkina Faso
Olvea Boosts Shea Butter Output France-based Group Olvea, through its subsidiary Olvea Burkina is to invest CFA 2 billion in a new shea butter production plant in Burkina Faso’s commercial capital BoboDioulasso. The new plant will have a processing capacity of 12,000 tons of shea nuts per year, with a production capacity of 7000 tons of organic butter. In addition, it will produce bio sesame oil and transform beeswax.
[APA 22/04/16]
Ghana Cashew Export Ban Lifted The ban on the exportation of cashew on March 14, 2016, on what officials said was an attempt to protect the local processing sector, was lifted after producers and Members of Parliament [MPs] opposed the move. President Mahama announced the outright withdrawal of the policy and outlined other measures to boost the emerging industry. The withdrawal is to be followed by consultations with industry stakeholders on how to move the local processing of the nuts forward.
[Graphic 22/04/16]
Largest Cashew Processor In Brong-Ahafo Shut Down The largest cashew processor in the Brong-Ahafo Region, KONA Agro Processing Limited, has been forced to shut down operations due to financial difficulties. The company, which had processed 1,500 MT of raw cashew annually for export, needs US$1.5m to get back into business. Reportedly several attempts to access credit from the Export Development and Agricultural Investment Fund [EDAIF] - to provide it with financial lifeline, had been unsuccessful.
[GNA 17/04/16]
8
COMMODITY NEWS
CASHEW, GROUNDNUT & SHEA Ghana
Government To Outline Measures To Improve Cashew Production The government is to introduce a Memorandum of Understanding [MoU] within 60 days outlining measures to promote the production, sale and processing of cashew nuts. The document will indicate the government’s commitment towards extending financial, material and technical support. Plans are also underway to rope in the Ghana Export and Import [Exim] Bank which would be established within the year to assist the farmers to harness their potentials in the commodity. Meanwhile the Ministry of Trade and Industry is working to address liquidity challenges facing local cashew processing companies to ensure prompt payment to cashew farmers. This may include the possible establishment of a Cashew Development Board, to serve as a regulatory agency for cashew production and export in the country. Current national annual production stands at 70,000 MT. A US$35 million processing plant owned by a Brazilian USIBRAS started operations November 2015. It has a capacity to process 35,000 MT/yr which is exported to the mother company in the United States. An importation ban of nuts from Côte d’Ivoire has made it more difficult for local processing plants highlighting the need for investment in production to supply to the local processing plants. USIBRAS is importing nuts from Burkina Faso but still has a huge deficit with production down 20%.
[Graphic 10/04/16]
Guinea Bissau
Cashew Farmgate Price At US$0.61/Kg Guinea Bissau has set the cashew farmgate price to 350 CFAF/kg [$0.6067] for the April-to-September commercial campaign, a 40% increase over the price last season. Cashew is the main export crop for Guinea Bissau and aims to export at least 200,000 tonnes this season, up about 11% from 2015. Guinea-Bissau’s main trading partner for its crop is India and will enter the markets of China and Vietnam this season.
[Yahoo 20/04/16]
9
Nigeria Cashew Group To Build International Brand For Products The National Cashew Association of Nigeria [NCAN] plans to build international brands for cashew products. Under a new ‘Road Map for Cashew Industry Development in Nigeria’ the Minister of Agriculture, Chief Audu Ogbeh noted the country had to build reliable brands for processing mills, producers and exporters that follow international standards and comply with food hygiene regulations. Cashew generated US$253 million last year from a production of 160,000MT annually. This year NCAN is expecting 175,000 MT. The road map focuses on increasing production to 500,000 MT and processing 70% of total production within 4-years, from 2016-2020. By 2024, the target is to achieve an annual production of 840,000 MT. Efforts would be made to increase training in harvesting and proper post-harvest handling practices preventing losses and wastages. Challenges included encroachment of foreigners at farm gate leading to a distortion in the value chain, non-implementation of the Export Expansion Grant [EEG], double taxation through Nigeria Export Levy [NXP] and Nigeria Export Supervision Scheme [NESS], border smuggling leading to understated production figures, unfavorable foreign exchange policies, scarcity of Jute bags for packaging the product and the inability of exporters to have unfettered access to export proceeds. NCAN intends to import 1.5 million jute bags required for this year’s season. NCAN has also called for government support to enable it to set up a N20 billion cashew research fund to promote continuous product development, production of hybrid seedlings and better agronomical practice. It is also setting up a N50 billion Cashew Processing Fund to enable it establish 200 new cashew processing factories.
[Nation 01/04/16]
10
COMMODITY NEWS
CASSAVA Cameroon
Second Processing Plant For Ngoulémakong Seydou Bouba, Deputy Administrator of the World Bank, visited Ngoulémakong, in southern Cameroon, a main production area of cassava. The area is to host a FCFA 441.4 million processing unit to turn cassava into starch and others derivatives. The unit is financed by the Investment and Development Project for Agricultural Markets [PIDMA - Projet d’investissement et de développement des marchés agricoles], led by the Ministry of Agriculture and the World Bank. The processing capacity of this unit has not been specified.
[Business in Cameroon 10/04/16]
Agro Resources To Invest FCFA 26 Billion In Processing Agro Resources Cameroon is to invest FCFA 26 billion to build a cassava and maize processing plant in Batouri, in East Cameroon. The project should start within 2-months for construction works of the processing unit to be completed by the end of 2016.
[Cameroon Web 13/04/16]
Tanzania
Cassava To Boost Export Earnings Tanzania, the 5th biggest producer of cassava in Africa, is set to export 2 million tonnes annually to China, raking in US$300 million a year. The deal will change Africa’s current status where despite being a major producer the region has an insignificant share in the international market. In 2015, in a bid to find cassava buyer, Tanzania dispatched experts to Beijing to ascertain if standards of locally produced cassava meet those required by China. Meanwhile China under its Development Plan for Renewable Energy aims to maximise on the use of ethanol fuel. Cassava chips have gradually become a major source for ethanol production. In China the largest cassava ethanol fuel production facility is located in Beihai in the Guangxi region on China’s southwest coast. The facility has an annual output of 200,000T from an average of 1.5 million tons of cassava. Also China’s Hainan Yedao Group has invested US$51.5 million in a new bio fuel facility that is expected to produce 120,000 m3 a year of bio ethanol from cassava plants. Analysts note with a current production of 5.5 million tonnes annually and possibilities to boost production, Tanzania has the potential of making own bio fuel industry.
[Daily News 26/04/16]
11
COMMODITY NEWS
COCOA Regional
Ivorian Stock Exchange MELX Sets Sights On Cameroon Cocoa, Coffee The management of the Ivorian raw materials stock exchange Mel Commodities Exchange [MELX] met with local operators in Cameroon on 15th April to raise interest in its exchange. MELX has decided to list all the exported raw materials, particularly cocoa and coffee on its exchange. MELX will hold a similar promotion in Côte d’Ivoire and Ghana. The stock exchange will remain in Abidjan where all the transactions will be centralised. But, MELX is opening the facility to Cameroonian companies who would want to list their raw materials and reduce the number of middlemen. It has an office in Douala which will work as a clearing house for products to be transacted in Cameroon. Launched in 2014 in Côte d’Ivoire, MELX’s first contracts were exclusively in the palm oil sector. MELX’s main competitor is the Cameroon Commodities Exchange [CCX], the national raw materials stock exchange.
[Business in Cameroon 20/04/16]
Olam Sees El Nino-Hit Cocoa In Biggest Deficit In 30 Years According to Olam International Ltd dry weather damaging crops from Ivory Coast to Indonesia will widen the global cocoa shortage to the highest in than 3-decades. World production will fall short of consumption by 308,000 MT in the 2015-16 season ending in September. That would be the most since the 1980s and up from 122,000 MT forecast in January. Dryness has since curbed the outlook for the smaller of 2-annual crops in top growers Ivory Coast and Ghana. Cocoa futures in London jumped 19% in the past year as an El Nino weather pattern hurt crops from Ecuador to Indonesia. Ivory Coast farmers will harvest a crop 14% smaller than a year earlier, while output in Ghana will be unchanged. There’s a risk that harvests could be smaller than Olam’s outlook, which is based on tree crops instead of estimates of beans arriving at ports. The main harvest in Ivory Coast, which takes place from October to March, will be 35,000 MT less than predicted in January, while the estimate for the smaller mid-crop of April to September was cut by 75,000 MT. Ghana’s mid-crop will be 30% smaller. Brazil’s output has fallen to 160,000 MT, some 60,000 MT less than previously thought. Crop forecasts for Indonesia and Ecuador have also been cut while raising them for Nigeria and Cameroon. The total production estimate was cut by 230,000 MT. Bean quality is also deteriorating which will exacerbate shortages as processors find it hard to grind due to a lack of higher quality cocoa to blend them with. The low-quality beans being harvested this season will need to be carried into next year, when better supplies will become available. Pod yields for the mid-crop are about a 25% smaller than at the same time last year. Pods are coming out smaller and maturing earlier because of the dry, hot weather, while beans coming out of them are very small with high waste levels. Global cocoa processing will expand 1% this season, less than the 2% previously expected, partly because of limited supplies in producing countries. There is a risk that grindings will remain unchanged, which would still lead to a deficit of 265,000 MT.
[The Business Times 22/04/16]
12
COMMODITY NEWS
COCOA Cameroon
Cargill Aims For 30,000 Tonnes Of Certified Cocoa In 2015-2016 Certified production in Cameroon during the 2015-2016 cocoa season could reach 30,000 MT - three times more than the 10,000 MT produced during last season. Cargill Africa through its local trader Telcar Cocoa is to give producers of certified cocoa a FCFA 1 billion bonus for the current season. Up from the FCFA 400 million in 20142015 and FCFA 104 million in 2013-2014. Thanks to the “Cargill Cocoa Promise” initiative, Telcar Cocoa is the main sponsor of cocoa certification in Cameroon with over 8,000 producers certified between 2011-15. Telcar also plans to enroll 10,000 producers in the certification process during 2016. Certified cocoa has risen from 5,446 MT in 2013-2014 to 10,000 MT last season up 90%.
[Business in Cameroon 01/04/16]
IFC Invests Funds In Cocoa Economy American firm Cargill through its local trader Telcar Cocoa and the International Finance Corporation [IFC] a subsidiary of the World Bank will invest US$1.5 million [FCFA 825 million] over 3 years in the cocoa producer cooperative Academy in Cameroon. The goal is to turn the co-op into a viable, sustainable and profitable enterprise. This is the first intervention of IFC in the development of the cocoa sector in Cameroon. A similar exercise was established in Côte d’Ivoire where a producer cooperative Academy was launched in 2013 which enabled the training of 400 delegates from 70 cooperatives. Producers there have already secured FCFA 2 billion worth of loans from local banks.
[Business in Cameroon 01/04/16]
Arysta Lifescience Cameroun Offers 200,000 Seedlings To CICC Program Arysta Lifescience Cameroun which specialises in the supply of inputs, phytosanitary products and agriculture equipment has just donated 200,000 seedlings to the New Generation program. The program was set up by the Conseil Interprofessionnel du Cacao et du Café [CICC - Cocoa and Coffee Board] to rejuvenate farms and lower the average age of cocoa and coffee producers. In all 1-million seedlings are promised to encourage youth production.
[Business in Cameroon 07/04/16]
April Prices Remain Steady Cocoa prices in Cameroon remained largely steady in April, ranging from 1300 CFA francs [US$2.23] in the South-West region to 1600 CFA francs in the Centre. The Cameroon agro-business cooperative [Camagrob] said the crop has not been good so far, partly because farmers have used non-approved pesticides. Also buyers are purchasing beans illegally before the crop has been dried or harvested, depressing the price for producers.
[Business Recorder 26/04/16]
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Cote d’Ivoire Mid-Crop Cocoa Harvest Hit By Poor Weather Purchases of cocoa in Cote d’Ivoire’s mid-crop season that starts in April have ground to a halt because of a lack of rain and harsh winds that have also hit quality. Forecasts for the April-October mid-crop say it could drop to between 380,000 and 390,000MT, a 24% fall from 502,000 MT in the same harvest last year. With output of around 1.8 million MT/yr the mid-crop represents about 30%. Dry weather has already reduced forecasts for the 2015-2016 season to around 1.6 million. Many exporters have reduced or stopped buying altogether as a lack of rain has made beans smaller and twice as acidic as usual. Only seven of more than 100 accredited operators have bought beans and opened their factories so far. About 80% of exporting companies have stopped buying. As a result, grinders have largely foregone purchases so far this mid-crop season, opting to wait for any improvements in the crop that may appear toward the end of the harvest.
[Reuters 06/04/16]
Production Set To Decline In 2016 Cocoa production is expected to decline this year as poor weather takes its toll on the crop. Data from the Agriculture ministry shows a projected deficit of 200,000 MT in the current period - a decrease of 12%. Agricultural specialists have placed the blame in production on the persistence of the El Nino weather phenomenon that has brought in the most severe Harmattan winds in three decades. The grinders who buy the bulk of the mid-crop’s smaller beans are also worried of the quality in production declining and which will make the cocoa that is harvested not even be suitable for processing. Exporters said they were seeing a decrease in the size of beans and an increase in the levels of free fatty acids [FFA], which erode the quality of cocoa butter, the ingredient that gives chocolate its melt-in-the-mouth texture. Ivory Coast currently processes around a third of its cocoa production locally, most of it into semi-finished products such as cocoa butter and powder. The nation’s 12 grinding facilities processed nearly 570,000 MT in 2014, up more than 20% from 2015.
[Africa News 11/04/16]
14
COMMODITY NEWS
COCOA
Cote d’Ivoire
Farmers Hit By Price Dispute & Poor Bean Size Cocoa exporters and grinders are withholding financing from suppliers amid a dispute over the pricing of mid-crop beans threatening farmers’ incomes and deliveries to ports. Farmers and trading houses predict a 24% fall in the harvest this year because of a lack of rain and harsh winds that have diminished the size and quality of beans. Already this season, arrivals at ports have been hit by the poor crop quality. Now, exporters say they will not finance merchants to buy more beans because the cost has not fallen with the drop in quality. The Coffee and Cocoa Council [CCC] has kept the minimum price it sets for farmers unchanged at CFAF1,000/kg [$1.71] for the mid-crop harvest, which opened on April 1, a sum buyers say is too high due to the size of the beans. They noted they would not finance middlemen to buy beyond 120 beans/100g. The CCC does not allow cocoa with a bean count over 120 to be exported in bean form, so local processors typically buy the bulk of the smaller mid-crop beans, which are more acidic and yield less butter. Bean counts currently range from 130-140, forcing processors to purchase larger volumes for the same result. With no discount on mid-crop beans, they say they have seen their margins slashed.
15
According to exporters, the number of beans reaching ports could be halved from April to June versus last season, when 300,000 MT arrived.
[Africa News 16/04/16]
Ghana Touton Cocoa Company To Increase Production Tema-based Touton Cocoa Processing Company is to increase its production from 2400 to 6000 tons of beans in the next 5-years. With the increased capacity the French company’s investment would reach US$50 million and turnover would rise to US$200 million. President Mahama paid a working visit toTouton at the Tema enclave with the Ethiopian Prime Minister who was in the country.
[Star FM Online 11/04/16]
60 Million Seedlings To Be Distributed The Ghana Cocobod with Government support will distribute 60 million seedlings to farmers during the 2015/2016 cocoa growing season. Government aims to streamline Cocobod with the formation of a task force made up of the security agencies and cocoa officers to stem the diversion of fertilizers and chemicals.
[GNA 08/04/16]
Daily Spot Price [ICCO] These are the average of the quotations of the nearest three active futures trading months on NYSE Liffe Futures and Options and ICE Futures US at the time of London close. Date
ICCO daily price (SDRs/tonne)
ICCO daily price (US$/tonne)
London futures (ÂŁ sterling/tonne)
New York futures (US$/tonne)
1 Apr 16
2100.70
2960.16
2127.00
2897.00
4 Apr 16
2088.89
2939.05
2110.00
2863.33
5 Apr 16
2098.63
2954.54
2132.67
2886.67
6 Apr 16
2115.02
2973.60
2148.67
2905.00
7 Apr 16
2077.31
2926.97
2125.00
2858.33
8 Apr 16
2092.90
2947.52
2136.33
2878.00
11 Apr 16
2119.10
2991.48
2146.33
2924.00
12 Apr 16
2132.47
3013.78
2165.33
2940.67
13 Apr 16
2137.75
3007.89
2164.67
2936.33
14 Apr 16
2166.65
3042.02
2196.67
2974.00
15 Apr 16
2150.35
3022.51
2166.00
2963.67
18 Apr 16
2186.27
3077.06
2194.00
3019.67
19 Apr 16
2214.13
3121.04
2205.00
3064.67
20 Apr 16
2216.69
3128.26
2216.33
3068.00
21 Apr 16
2229.08
3139.25
2232.33
3075.00
22 Apr 16
2273.81
3196.14
2259.00
3140.67
25 Apr 16
2285.42
3212.07
2254.33
3154.33
26 Apr 16
2311.52
3254.83
2267.67
3194.67
27 Apr 16
2295.99
3235.72
2261.67
3178.33
28 Apr 16
2280.49
3223.38
2249.00
3164.00
29 Apr 16
2315.01
3281.13
2285.33
3217.33
16
COMMODITY NEWS
COFFEE Kenya
Uhuru Waives Coffee Licensing Fees President Kenyatta has waived, with immediate effect, coffee licensing fees and levies in an effort to improve the livelihoods of farmers boosting earnings by 4%. The President also directed the Ministry of Agriculture to undertake a review of tea and sugar levies. In March the President constituted a taskforce to identify the factors ailing Kenya’s previously flourishing coffee sector; a mainstay of Kenya’s economy in terms of exports. Professor Joseph Kieyah was appointed to chair the taskforce with the assistance of Agriculture Principal Secretary Richard Lesiyampe. Kenyatta gave the taskforce until March 24 to compile its report.
[Capital FM 31/03/16]
Price Declines By 19% At Mombasa Auction Coffee prices declined by 19% in the last 3-auctions as the volume of quality beans on sale dwindled. The price had been going up since January because of good beans from central Kenya. Farmers from the region have been harvesting their main crop since November last year but the main season is expected to come to an end in the coming 2-months. Quality should improve from July when the crop from eastern Kenya will be ready for harvesting. In the 2013/14 crop season, a total of 671,438 bags were traded at the NCE, realising US$174.1 million in revenues compared to 625,170 bags sold in the 2012/13 season valued at US$127.1 million.
[New Times 07/04/16]
H1 Earnings Fall 9% On Lower Volumes The value of coffee sold through Kenya’s auction fell 9% to US$85 million in H1 to March due to lower volumes and prices. Kenya sold coffee worth US$93.2 million in H1 of the 2014/15 crop season that runs from October to September. Officials said 324,585 bags of 60-kg each were sold in the 6-months to March compared with 328,401 the previous year. The average price dipped to US$214.51 per 50-kg bag from $232.4 in the previous year.
[Reuters 11/04/16]
South Africa
Nestlé South Africa Invests R1.2bn In KZN Coffee Plant Nestlé South Africa has inaugurated its instant coffee manufacturing plant in Estcourt, in KwaZulu-Natal, after a R1.2-billion investment into the expansion of the factory. The investment forms part of Nestlé’s R2.9-billion foreign direct investment in the last 5-years. The expansion included construction of a wastewater treatment plant, a state-of-the-art coffee drying plant, new coffee processing plant and upgrading existing coffee processing.
[Engineering News 19/04/16]
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Uganda Uganda Will Not Tax Imported Coffee According to the Uganda Revenue Authority [URA] Uganda will not charge any import tax on raw coffee from the region. Ugandan imports raw coffee from countries such as Tanzania and Rwanda, which they clean and re-export to the global market. Most of the coffee imports have been informal and it is not clear how much comes into the country. Uganda is currently the top exporter of coffee from the continent, beating Ethiopia, according to figures from the International Coffee Organisation [ICO]. Between October and February 2014/15, Uganda exported 1.2m bags of coffee [60kgs] while Ethiopia exported 787,000 bags. This financial year, between October 2015 and February 2016, Uganda exported 1.4 million bags of coffee while Ethiopia exported 1-million. However, Ethiopia produces far more coffee than Uganda, but consumes a substantial amount of its coffee domestically. The Uganda government has been distributing coffee seedlings to farmers to boost production. In the last 2-years more than 1.5 million seedlings have been distributed.
[Observer 15/04/16]
URA To Electronically Track Coffee The Uganda Revenue Authority [URA] will add coffee on the list of the goods it tracks electronically to help exporters guard against robbers. The tax body already tracks such goods as fuel and sugar and others going through Uganda to South Sudan or DRC to avoid dumping. The Ankole Coffee Producers Association wanted the tax body to stop arresting them for using foreign-registered trucks. URA said this was an issue they had to resolve with Kenya because Ugandan-registered trucks are not allowed in Kenya unless they are carrying coffee from Uganda. The URA also had to negotiate with Kenya to stop imposing a bond on coffee crossing its territory. Every container going through Kenya is charged between 0.5-3% of its value as security. It is refunded when they are sure it has crossed the border.
[Observer 15/04/16]
Exports Fall 6.4% In February 2016 Coffee exports in February 2016 amounted to 271,941 60-kg bags, down from 290,475 in the same month last year, reported the Uganda Coffee Development Authority [UCDA]. This brought total exports in the first 5-months of 2015/16 [Oct/Sep] to 1.421 million bags.
[Agra Net 05/04/16]
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COMMODITY NEWS
COTTON & TEXTILES Regional Brazil Assesses Progresses Of Cotton-4 Plus Togo Project The first meeting of the administrative commission of the Cotton-4 plus Togo project was held in Brasilia this month. The meeting opened with a panel discussion on South-South Cooperation, in which parties examined results achieved so far by the program and the challenges of measuring its effects, as well as the construction of indicators. The Cotton-4 project was started in 2009 by the Brazilian Cooperation Agency and the Agricultural Research Corporation, with the aim of improving the cultivation of cotton in Benin, Burkina Faso, Chad and Mali. Togo has recently joined the initiative. Through this program the countries involved share technology and the application of techniques related to genetics, cultivation of soil and pest control. As a result, the countries involved quadrupled production in fields where the experimental program had been implemented.
[Prensa Latina 25/04/16]
Chinese Cotton Sends Prices Tumbling China is to open the floodgates on its huge supplies of cotton, sparking a rout in prices. China plans to auction about 2 million MT from May through August. That’s almost equal to total shipments expected this season from American growers, the world’s top exporters. The auction sales would represent about 14% of the 13.9-million tons that the U.S Department of Agriculture estimates that China has in its stockpiles. Prices slid more than 7% in the past year in part due to large Chinese inventories curbing overseas purchases from the Asian nation, the biggest consumer of the fiber.
[Bloomberg 15/04/16]
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Burkina Faso 2015-16 Output Down 18% Burkina Faso produced 581,000 MT of raw cotton in the recently ended 2015/16 season, down 18% from the previous harvest and well short of its aim of a record crop of 800,000 MT. The Inter-professional Cotton Association of Burkina [AICB], which groups together the country’s 3-cotton companies and the national cotton farmers union [UNPCB], said the drop in output was due to poor weather conditions. Seasonal rains arrived late. There were long dry spells at critical times but also flooding during other periods when the rains were too abundant. The AICB announced on 22nd April a farmer price of 235 CFAF/kg [$0.4059] for the 2016/17 season. Meanwhile the government and cotton companies will offer subsidies worth 13.5 billion CFA francs to help pay for fertiliser and pesticides at a time when Burkina is weaning itself off of genetically modified cotton.
[Reuters 23/04/16]
GM Cotton Banned Burkina Faso is phasing out the production of genetically modified [GM] cotton introduced by Monsanto Co., the world’s largest seed company, because growers are unhappy with the short length of its fiber. Africa’s biggest cotton grower is reducing the acreage for genetically modified cotton this season until it’s completely phased out in 2018 and replaced by conventional cotton. According to a Government statement the results of a pilot project with Monsanto that began in 2003 aren’t favorable as the length of the fiber after ginning has degraded and no longer responds to the needs of the market. The nation’s three cotton companies and the national cotton farmers’ union will seek 48 billion CFA francs [US$82 million] in compensation for lost harvests from Monsanto.
[Bloomberg 14/04/16]
Cote d’Ivoire Cotton Output Falls 31% Cote d’Ivoire’s cotton harvest fell 31% in the season that ended in April as disappointing rainfall curbed output across West Africa. Intercoton noted growers harvested 310,000 MT in the 2015-16 season, less than the 450,000 MT collected a year earlier. Rain came later than normal during planting and there was too much moisture during development phase. As much as 400,000-ha are expected to be sown for the next season, for a production estimate of about 450,000 MT if weather conditions are favorable. The cotton season runs from May to April, with harvesting typically peaking in November. Cotton production in West Africa, including Burkina Faso, Mali, Ivory Coast, Senegal and Chad, is expected to fall 9% in the 2015-16 season to 1.71 million MT from 1.88 million MT in the 2014-15 season because of similar weather issues.
[Bloomberg 21/04/16]
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COMMODITY NEWS
COTTON & TEXTILES Mali Increased Prices, Subsidies To Aid 2016-17 Crop According to the Malian Company for the Development of Textiles [CMDT] higher prices and government fertilizer subsidies could help Mali meet ambitious cotton production targets next season after it missed output goals this year. Mali aims to increase cotton output to 750,000-800,000 MT this season after it dropped last season to 513,553 MT because late rain damaged the crop. The price paid to producers has increased to 250 CFAF/kg [43 cents] for the best quality cotton that accounts for most of the harvest, up from 237.5 CFAF. Mali’s cotton season starts in April with a production phase that begins in May/June and a commercialisation phase that starts in October/November.
[Reuters 13/04/16]
BOAD Gives US$54.8 Million To Textile Company The Malian Company for Textile Development [CMDT] has received 2-loans totaling US$54.8 million from the West African Development Bank [BOAD]. A first agreement of 15 billion CFA Francs will be used for partial funding of a project to extend and modernize CMDT. And a second loan of 17,920 billion CFA Francs will be used for funding cotton farming during the 20152016 and 2016-2017 seasons. CMDT will be able to invest in new equipment and to comfortably fund the farming season, from acquisition of farm inputs and fertilizers, to purchase and transport of the cotton as well as sale of the cotton fiber and other byproducts.
[Xinhua 22/04/16]
2015-16 Cotton Output Falls Due To Late Rains According to the Malian Company for the Development of Textiles [CMDT] Mali’s cotton production fell last season and missed government targets as heavy rains damaged crops. Raw cotton production for the season ending March 31 fell to 513,552T from 548,000T in the previous season, while cotton fibre production fell to 215,450 MT from 229,479 MT from last time. Late rains drenched crops disrupting ginning in most regions in January and denting output. Mali aims to increase cotton output to 750,000-800,000T next season.
[Reuters 05/04/16]
Mozambique Cotton Prices Set For 2015-16 The National Forum of Cotton Producers [FONPA] of Mozambique and the Cotton Association of Mozambique [AAM] agreed to present cotton prices to the government for the current year, in which the harvest is expected to reach 70,000 MT. Prices will be MZN14.50/kg of top quality seed cotton and MZN10.50 for second grade seed cotton. In 2014/2015 first grade seed cotton was traded at a price of MZN11.75 and second grade at a similar price to the one proposed for this year. The Mozambican Cotton Institute forecasts that cotton production will reach 200,000 tons in 2020.
[Macauhub/MZ 22/04/16]
Senegal February Cotton Output Drops By 4.2% Cotton output in Senegal dropped by 4.2% in February 16 compared with the previous month. Data received from the Society for the Development of Textile Fibres [SODEFITEX] showed output amounted to 17,730T against 18,295T in February 15, a decrease of 765T.
[APA 21/04/16]
21
COMMODITY NEWS
FISH Gambia
FAO Formulate 5-Year Fisheries Plan With support from the Food and Agriculture Organisation [FAO], the Ministry of Fisheries and industry stakeholders have endorsed an action plan for the sectors development up to 2020. Fisheries currently contributes 12% of the country’s GDP. The vision for both the fisheries and aquaculture industry will review the social, institutional, physical and technical constraints that are impeding the sustainable, growth and management of the sector. The FAO is supporting this initiative through the Technical Cooperation Programme facility [TCPf].
[APA 08/04/16]
Mauritania Fishing Plans Stifled By Poor Infrastructure The Free Zone Authority has noted only 5% of the 1.2m tonnes of fish caught annually in Mauritanian waters is processed locally due mainly to the lack of infrastructural investment. Meanwhile along the country’s 720km coastline there is only one port for disembarking fish, at Nouadhibou in the far north. Mauritania exported US$552 million of fish and crustaceans in 2014, more than 25% of the country’s total exports. Last year Mauritania agreed a 4-year deal with the European Union to allow EU fleets to catch just over 280,000 tonnes of fish a year. And in 2015, the government adopted a 5-year strategy for fishing and passed a new fisheries code. The aim is eventually to process all of Mauritania’s catch locally – that is potentially 1.8 million tonnes. A new legal framework and incentives are building a system to encourage private investment. The government plans to spend between US$800m and US$1billion on the effort, with most of that funding going to build 3-ports and improve electricity supplies. One reason fishing and logistics companies are not lining up to launch processing operations in the free zone is the unreliable power supply. On the positive the port extension in Nouadhibou, which was finished in 2014, is a start. And a transparency initiative launched by Mauritania in February aims to end secretive fishing contracts and improve co-ordination with governments in the region to reduce overfishing.
[FT.com 15/04/16]
22
COMMODITY NEWS
FOODSTUFFS & BEVERAGES Regional Soybean Value Chain Launched Foodtrade East & Southern Africa has launched a Soybean Challenge Fund that is open to applicants in Tanzania, Zambia, Kenya, Uganda, Rwanda, Burundi, Zimbabwe, Malawi and Mozambique. The fund seeks to stimulate innovative business models in private sector companies and private sector led consortiums that will unlock barriers in the regional soybean value chains. FoodTrade ESA will provide up to 49% of the total budget proposed with successful applicants entitled to grants ranging between ÂŁ250,000-800,000 per proposal. Partnerships will address market failures in storage, inputs, service markets, as well as coordination mechanisms and policy regulation.
[Daily News 19/04/16]
Africa Injects US$15 Billion In Wheat Imports Each Year Africa spends US$15 billion every year to import wheat as its countries cannot produce enough to meet domestic requirements. Experts attending a 4-day Support to Agricultural Research for Development of Strategic Crops [SARD-CS] wheat annual review and planning meeting noted Africa should prioritise wheat as a strategic crop and reduce the import bill. The meeting was attended by Sub-Saharan Africa agronomists, wheat breeders, researchers, agriculture economists and wheat farmers from Zimbabwe, Ethiopia, Zambia, Tunisia, Lesotho, Kenya, Zambia and Nigeria.
[Herald 20/04/16]
23
Morocco Dari Couspate Invests €4.5 Million In Salé Plant Dari Couspate announced its intention to inject 50 million dirhams [€4.5 million] in the extension of its couscous plant in Salé. The group posted a turnover of 525 million dirhams [up 18.9%] for a net profit of 38 million dirhams [up 52.7%]. Construction works will be launched in H1.
[Ecofin 18/04/16]
Ramadan Sees Pulse Imports Up The government has plans to begin importing lentils and garbanzo beans in order to meet demand as it increases before and during the Ramadan season [June-July 2016].
[Morocco World News 14/04/16]
Nigeria Olam To Invest US$150 Million In Poultry Sector Olam International is to invest US$150 million in animal feed mills, poultry breeding farms and a hatchery in the Nigerian states of Kaduna and Kwara. The project will create more than 100,000 MT of in-house storage. Domestically produced meat is being hampered by a lack of good quality feed, support for farmers and availability of young stock, but consumption is set to increase. By investing in poultry and fish feed, Olam can utilise the wheat bran from our wheat milling operations, as well as maximise our sourcing networks to buy corn and soy from local farmers. The investment in the hatchery will help boost poultry production and, in the long run, help reduce the country’s reliance on imports. At full capacity both mills are expected to produce more than 600,000 MT of feed. The Kaduna mill will supply mainly Nigeria’s northern markets, while the Kwara plant will cater to the southwest region. The mills will source corn and soybeans locally and it is hoped that this will encourage domestic production of these crops. The poultry breeding farm in Kaduna is expected to produce more than 1-million hatching eggs each week to the hatchery.
[African Farming 14/04/16]
Dairy Talks With Denmark’s Arla Foods Intensify A high-powered Nigerian delegation from the Federal Ministry of Agriculture and Rural Development has held talks in Denmark with Arla Foods, one of the world’s largest dairy companies. A partnership with Arla and knowledge sharing will help build a sustainable dairy industry and empower Nigerian farmers who face multiple challenges with logistics, infrastructure, organisation, quality and productivity. Denmark’s minister of foreign affairs, Kristian Jensen, had in February this year signed a letter of intent with the Nigerian minister of agriculture to cooperate on the development of the local agriculture sector in Nigeria. Nigeria spends US$1.3 billion dollars on dairy imports. The Nigerian government’s target is to double milk production over the next 3-4 years to meet domestic consumption and export.
[Leadership 20/04/16]
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COMMODITY NEWS
FOODSTUFFS & BEVERAGES Nigeria
Nestle’s US$28 Million Abaji Water Factory Inaugurated President Buhari inaugurated Nestle Water’s US$28 million factory in Abaji, Abuja. The factory is the company’s third in Nigeria, first major investment in the North, and the most modern water processing factory in Central and West Africa. The 14.6-ha site will produce Nestlé Pure Life and support future demand and growth in the northern and western regions of Nigeria. The Bank of Industry provided long term financial support to establish the factory as well as supporting the expansion of the company’s cereal and culinary plants in its Agbara, Ogun.
[Premium Times 15/04/16]
South Africa AB InBev Strikes Deal Easing Way For Tie-Up Anheuser-Busch InBev has struck an agreement with the South Africa government over jobs and funding that should ease the brewer’s efforts to secure regulatory approval for its £71 billion acquisition of SABMiller. The agreement includes a guarantee that there will there be no involuntary job losses in South Africa as a result of the transaction. It has also committed to maintaining its total permanent employment levels in the country for 5-years after the takeover is completed. The group has also agreed to invest R1 billion [US$70 million] to support smallholder farmers “as well as to promote enterprise development; local manufacturing, exports and jobs. In the meantime Peroni and Grolsch have been sold to Japanese beer giant Asahi Group Holdings Limited less than a year after they were acquired by SABMiller.
[FT 14/04/16]
Bidvest’s Food Africa Unit To List Separately On JSE The Bidvest Group plans to list its food business Bid Corp on the local stock exchange on May 30th to streamline its activities and operations. Bidvest would retain 3-businesses in its Food Africa division - EAS Zimbabwe, EAS Zambia and Bidvest Zambia which are valued at R6.2 million.
[BD Live 14/04/16]
Danish Expertise To Boost Agricultural Sector Denmark’s food and agriculture minister met with his South African counterpart in Copenhagen with the aim of establishing food and agriculture co-operation. A deal would lead to the export of Danish food products, technology and knowledge to South Africa worth an estimated US$18.3 billion annually.
[Fresh Plaza 21/04/16]
25
South Africa
Indonesia Grants ‘Country Of Recognition’ Status For Horticultural Products South Africa opened up export potential of its deciduous fruit to Indonesia after the Indonesian Agricultural Quarantine Agency granted South Africa “Country of Recognition” status for the food safety control system blanketing various horticultural products. The move opened up the Port of Jakarta as an entry point into Indonesia and established a new trading regime that would ease the import process and documentation requirements for apples, apricots, cherries, citrus fruits, grapes, nectarines, pears, peanuts, plums and prunes. The document was signed by the Indonesian Minister of Agriculture Amran Sulaiman on April 11 and forwarded to South African Embassy in Jakarta political counsellor Willem Geerlings.
[Engineering News 14/04/16]
Wheat Import Duty Increases By 34% South Africa’s finance ministry has approved a 34% increase in the tariff on wheat imports to R1 224.31/t from R911.20/t. Food prices especially for the staple maize crop have been accelerating because of a severe drought, pushing inflation higher, but analysts say the impact of the tariff hike on consumers will be minimal. The reason for the increase is due to the fall in global wheat prices and the depreciation of the rand. It levels the domestic price so that prices here do not fall to the levels where it is not sustainable to produce wheat in South Africa. The country typically imports about 60% of the wheat it consumes. It is expected to import 2 million tonnes in the 2015/2016 marketing year which ends on September 30.
[Reuters 08/04/16]
Zimbabwe
Horticultural Imports To EU ZimTrade noted Zimbabwe received US$54 million from horticultural exports to the European Union in 2015 up from US$49 million in 2014 but well below its peak in 1999/2000 when exports hit US$143 million. Major export destinations in the EU are United Kingdom, Netherlands, Lithuania, Spain, Portugal, France and Germany. In order to promote further exports into the Netherlands a Memorandum of Understanding [MoU] has been signed to support agriculture and revive the horticultural sector.
[Herald 14/04/16]
26
COMMODITY NEWS
FRUIT & VEGETABLES
Morocco Onions Imported To Combat High Prices
27
The Moroccan government has started importing a large amount of onions from outside the country in order to combat the rising price of the staple vegetable. The normal price of onions in Morocco stands around 1-2 dirhams/ kg, however, due to hindered domestic agricultural output this year caused by delayed – almost absent – rainfall, its price has increased to 14 dirhams/kg over the past few months.
[Morocco World News 14/04/16]
Senegal Creating A Brand For Mangos Senegalese producers are to create a national brand for mango. The national export promotion agency [ASEPEX] supports the project and recently organized a workshop to promote the move. Brand creation will give better visibility to local production, attract more consumers and target new markets. Senegal currently produces between 120-125,000T of mangoes annually but only exports 10%.
[Ecofin 19/04/16]
South Africa R120m Programme To Support Emerging Fruit Farmers The Western Cape has, in partnership with the National Treasury and the deciduous fruit industry, established the Deciduous Fruit Development Chamber [DFDC] Commercialisation Programme, which will disburse R120-million in funding to emerging fruit farmers to grow their businesses to commercial status. The R120-million grant, which was secured through the Jobs Fund will be disbursed over 4-years. Horticultural knowledge group Hortgro would support the DFDC of South Africa in the operational execution of the programme.
[Engineering News 21/04/16]
Shipping Of Organic Lemons To Europe Suspended The South African citrus industry has gone to huge lengths and costs [R1 billion] to lower the interceptions of Citrus Black Spot [CBS] and have reduced the cases found in shipments from 35 in 2013 to 15 in 2015. Following internal analysis, the group of organic citrus growers of SA, in non CBS free areas has after consultation with the Citrus Growers Association [CGA] voluntary suspended exports of organic lemons to the EU for the 2016 season. The move mitigates risk for the long term welfare of the industry. Last year South Africa exported 13 million cartons of lemons to Europe, 130,000 of these were organic lemon.
[Fresh Plaza 11/04/16]
Sharon Fruit Season Off To Promising Start About a month into the season, volumes of Sharon Fruit from South Africa look good. Export markets have also been receptive during the early part of the season with the latter half promising. In addition to satisfying domestic demand, crops will be shipped to Europe and Asia. Production is expected between 7,500-8,000T. Germany will remain the company’s main focus in Europe, though demand from the United Kingdom has also been growing. Consistent growth is also expected in Canada. In Asia, more shipments will go to Malaysia and Singapore, and sales in the Middle East have also been growing, especially Saudi Arabia.
[Fresh Plaza 22/04/16]
28
COMMODITY NEWS
PALM OIL
Ghana Palm Oil Export Plunges
29
Demand for Ghanaian produced palm oil on the international market is falling months after the local palm oil industry came under severe scrutiny for its quality processes. Exporters have complained consumers are shying away due to a series of negative reports in 2015. The Food and Drugs Authority raised a red alert on palm oil following a discovery that it had been adulterated with Sudan IV dye, a cancer-causing agent. As a result products now go through more rigorous testing in Europe than those from other countries.
[Ghanaweb 12/04/16]
COMMODITY NEWS
SUGAR Regional
Africa Sugar Growers Unprepared For EU Import Quota End Trade barriers and poor infrastructure are preventing sugar producers in sub-Saharan Africa from accessing under-supplied regions on the continent as an imminent end to import quotas in the European Union compels them to find new markets. A preferential-access deal with the EU for African, Caribbean and Pacific sugar producers ends in September 2017, potentially depriving the farmer’s further access to a duty-free market. Exports to the EU account for a 20% of the sub-Saharan region’s current annual output of about 7.5 million MT. While sub-Saharan Africa consumes more sugar than it produces, growers may struggle to plug this shortfall because insufficient infrastructure makes deliveries between regions difficult and import duties lift the cost of sales. Sub-Saharan Africa will consume 10.2 million tons of the sweetener in 2016, creating a supply shortfall of about 2.4 million tons in the region, according to the International Sugar Organisation. Sales to the EU account for the vast majority of exports from Mauritius and Mozambique, and about half of those from Swaziland. While EU sugar production is expected to increase when the reform measures take effect next year, African producers may still sell to some markets in the region, especially in southern Europe. Deliveries from Africa to this region are in many instances cheaper than shipments from northern Europe, which accounts for the bulk of the continent’s production. The EU will continue to buy African raw sugar, but will purchase less. Current projects may lift sub-Saharan Africa’s sugar output to 10 million tons over the next 6-years. While global consumption is growing at an annual rate of 1.5-2%, the continent’s demand may exceed 12.2 million tons, about 22% more than current consumption, by 2020 and create more opportunities for growers. Despite increasing demand, some producers may shelve new projects in regions where oversupply exists. Growers may invest in new industries that will create demand for their produce, such as ethanol production. Countries such as Mauritius have started investing in refining infrastructure to diversify away from raw-sugar exports. African growers can find new buyers on the continent if they displace some 1.5-2.5 million tons of Brazilian, Indian and Thai sugar that are shipped to eastern and southern Africa annually. For that to happen, access to markets are going to be extremely important. A lot hinges on the outcome of regional free-trade agreements. Raw-sugar futures have more than halved since the start of 2011.
[Bloomberg 02/04/16]
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COMMODITY NEWS
SUGAR Regional
6th African Sugar Conference Seeks New Alternatives To Export Sugar The 6th annual Africa Sugar Conference was held in Maputo, Mozambique. The event aimed to find alternative global markets to export African sugar from 2017 as the contract to export sugar with European countries comes to and end next year. Countries like South Africa, Mozambique and Swaziland produce more than 100,000 tonnes of sugar annually, with South Africa leading with 92,000 tonnes. It is a production which is more than the required demand from domestic markets.
[SABC 30/03/16]
Mozambique Drought Affects Sugar Production The drought in southern and central Mozambique will reduce this year’s sugar production due to a decrease in areas planted with sugarcane. The Association of Mozambique Sugar Producers [Apamo], said it would be almost impossible this year to reach sugarcane production recorded in 2015 – about 3.3 million tons – given that 20-24% of production comes from individual farmers who sell their produce to sugar factories. The 4- factories produce about 450,000T of sugar a year, of which about 200,000T is consumed domestically and the remaining 250,000T exported, mainly to European Union countries.
[Macauhub/MZ 08/04/16]
South Africa Illovo Sugar Says AB Foods To Buy Remaining Stake South Africa’s Illovo Sugar noted its largest shareholder, Associated British Foods, has agreed to buy the remaining stake in the company for 5.6 billion rand [US$370 million]. AB Foods, which holds a 51.35% stake in Illovo, has made an offer of 25 rand [US$1.65] per share for the stake it does not own. Illovo, which has been cutting costs to survive low sugar prices, said AB Foods plans to fund the offer from its cash resources and existing facilities. AB Foods first announced its intentions in February to buy the rest of Illovo Sugar for about 4.1 billion rand.
[Reuters 08/04/16]
31
COMMODITY NEWS
TEA Kenya
Kenya Reviews Tea Tax Kenya is reviewing taxes and levies on tea production after industry executives and farmers said the charges were putting them at a competitive disadvantage. Producers are complaining about a 1% levy on tea sold at Mombasa weekly tea auction and a 16% value added tax on tea processed and consumed locally. The sales levy does not apply to neighbouring producers. Tea growers in the Rift Valley highlands say that taxes and high costs of labour and fertilisers hurt earnings and discourage expansion. Kenya earned 125.25 billion shillings [US$1.24 billion] from tea exports last year on output of 399.21 million kg. With the average price at US$2.98/kg or 300 shillings. A slightly stronger shilling means officials expect earnings to slip to 115 billion to 120 billion shillings this year. Top buyers include Britain, Afghanistan, Egypt, Sudan and Pakistan. Kenyan officials have also been holding marketing trips to Asia in a bid to increase sales to countries like China.
[Reuters 25/04/16]
EATTA Focused On Mombasa Auction Automation The East African Tea Trade Association [EATTA] remains focused on automating the Mombasa tea auction at a cost of Sh100 million to enhance efficiency and ensure transparency in the trade. Meanwhile the President aims to speed up the waiver of levies and licenses for the crop. Removal would be a huge relief to small-scale farmers and would help expand the tea market to enable farmers get better prices for their produce.
[Daily Nation 13/04/16]
IFC To Improve Yields With US$4.2 Million The World Bank’s arm, the International Finance Corporation [IFC], has launched a US$4.2 million initiative to improve yields and income for Kenyan tea farmers. The Kenya Tea Development Agency’s Management Services Limited [KTDA-MS] noted the initiative focuses on training farmers on crop nutrition, soil management and business skills. KTDA operates 67 tea processing factories across the country, sourcing green leaf from 560,000 farmers, who are shareholders in their respective factories, which in turn own KTDA Holdings Limited. The IFC has also loaned US$55 million this year to finance 7-small hydropower plants to power KTDA’s tea factories.
[Xinhua 15/04/16]
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COMMODITY NEWS
TIMBER
Central/West Africa Sawn Bubinga Stocks May Be Licensed For Export Gabon is considering proposing bubinga/kevazingo be placed on the CITES list but it is not clear if other countries exporting this timber will support the listing. The authorities in Gabon have recently been assessing the level of bubinga/kevazingo stocks held by local companies and producers anticipate that licenses may be issued allowing some export of current stocks.
[ITTO 1-15/04/16]
Plywood Buyers Seeking High Quality Panels West and central African producers of plywood report firm demand especially for higher grades, a trend previously reported mainly for Asian plywood. It appears that international markets are now much more demanding and require high quality veneers on both faces as well as in the plywood core.
[ITTO 1-15/04/16]
Demand In China And EU Moves Ahead Buying for the Chinese market has steadily firmed, especially for the higher quality species and grades. Until recently Asian producers were the main beneficiaries of firmer demand in the Chinese market but now African suppliers are experiencing a similar trend. European demand is strengthening slowly and prices are very firm. In EU markets buyers are looking for prompt and timely shipment which is favouring West and Central African producers because of the shorter distances and their access to regular liner services.
[ITTO 1-15/04/16]
Slight Up-Tick In Interest From Buyers For The Chinese Market The ‘new normal’ of stable price structures for both logs and sawnwood has become a familiar pattern. Prices have barely moved since late last year marking one of the longest period of stability producers have experienced in recent years. Media hype of an impending collapse of the Chinese market has come to nothing and over past weeks producers have noticed a slight up-tick in interest from buyers for the Chinese market. A look at the residential and business construction trends provides a hint of what is behind the market conditions in China. Overall, construction activity in most consumer countries has turned the corner and is slowly expanding if this continues producers expect to see order books firm. While China is still firmly in the market this is still mainly for higher quality premium timbers. Demand for logs is still quiet however. [ITTO 16-31/03/16]
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Angola Wood Production Reaches 125,000 Cu.M In 2015 The Minister of Agriculture, Afonso Pedro Canga, noted that timber production in 2015 reached 125,000 cu.m. Levels are expected to increase to 230,000 cu.m by 2017. A new law on forests and wildlife is being prepared to replace existing outdated legislation, to prevent illegal actions logging and wood exports.
[Macauhub/AO 19/04/16]
Cameroon Considering Total Log Export Ban Heavy rains in Gabon and in Northern Cameroon are hampering forest operations and reports say that in Cameroon sawn sapele is in tight supply due to low production. In other news, it is not yet clear how far Cameroon’s new restrictions on log exports are working. Log exports are restricted to secondary species only but it is rumoured that the government is considering a complete halt in log exports. Reports from local analysts say a decision may be made later in the year. There have been rumours in Cameroon of bubinga/kevazingo logs being discovered in containers destined for export and it appears the authorities are stepping up inspections of export shipments.
[ITTO 1-15/04/16]
Main Tropical Producer Countries Extend Their Market Dominance Cameroon, Malaysia, and Brazil, Europe’s top 3-suppliers of sawn tropical hardwood, each recorded significant growth in deliveries to the EU last year. Cameroon was by far the largest single supplier of tropical sawn hardwood to the EU in 2015, accounting for almost one-third of all imports. EU imports from Cameroon were 339,000 cu.m last year, 12% more than in 2014. There was solid growth in sales of Cameroon sawn hardwood to several EU markets in 2015 including France, Belgium, Spain, and Italy. These gains were sufficient to offset a decline in sales to the Netherlands, Germany and the UK. Of other significant producer countries, there was double digit growth in tropical sawn hardwood imports into the EU in 2015 from Ghana [+15% to 55,000 cu.m] and the Democratic Republic of the Congo [+27% to 26,000 cu.m]. However EU imports from Gabon fell 5% to 85,000 cu.m and imports from Congo declined 4% to 28,000cu.m.
[ITTO 1-15/04/16]
Congo Production Remains Modest Reports on Republic of the Congo are of relatively low production of okoume logs and sawnwood and a shortage of high grade okoume peeler logs. A new and rather large concession in the Northern region of Congo Brazzaville has been allocated but one long term producer in the country with a large concession has decided to sell the company. It is the assessment of analysts that in, the short term, Congo Brazzaville production levels will remain modest at best.
[ITTO 1-15/04/16]
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COMMODITY NEWS
TIMBER Gabon
Gabon Introduces Restrictions On Air Dry Sawnwood Exports Gabon will introduce regulations limiting the export of air dry sawnwood. It is understood that by mid‐April a list of species will be issued detailing those included in the new regulation. Reports say that okoume is to be included and that, for export, 60% must be kiln dried the balance 40% may be exported air dry. It is also understood that ozingo has been removed from the list of timbers that can be traded but the felling ban on douka and kevazingo remains. It appears the government intends to propose kevazingo for CITES listing. Meanwhile the government has decided to establish a new timber marketing organisation but it is not known when this is likely.
[ITTO 16-31/03/16]
Ghana Sawnwood Dominated 2015 Export Performance The Timber Industry Development Division [TIDD] has released its Timber Export Report for the first 10 months of 2015. During the period January to October 2015 a total of 229,207 cu.m of wood products were exported earning €151.91 million. Sawnwood, comprising kiln dried [approx. 40%] and air-dried [17%] accounted for the bulk of exports to international and regional markets. Exports of sawnwood [57%], plywood [14%], billets [8%] and sliced veneer [5%] together accounted for over 80% of total exports, the balance was distributed over a further 10-wood products. Between January and October the export of poles and billets accounted for 16% of the total export volume compared to 14% in 2014, earning €13.64 million. Secondary products comprising sawnwood, plywood, veneer, boules, briquettes and kindling accounted for 80% of the total export volume [compared to 82% in 2014] and earned €133.63million. Finally, tertiary products comprising moulding, dowels, furniture parts and flooring contributed around 4% of the total export volumes, slightly up on 2014 and earned €4.63million. The top species utilized were teak, rosewood, ceiba, wawa and gmelina. In the period of the TIDD review Ghana’s primary products were shipped mainly to Asian markets [58%], regional African markets [19%], Europe [14%] and America [4%]. Short-term prospects for increasing production in Ghana are not bright. Many producers are operating well below capacity because of a shortage of raw materials and power outages. Manufacturers complain of rising production costs due to high utility prices, tax increases and high interest rates. Over the past 12 months there have been several mill closures which is adding to the unemployment situation.
[ITTO 1-15/04/16]
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Ghana
Joint Team Review Ghana Timber Trade Agreement The Ghana Government and the European Union [EU] met in Accra to review progress towards implementation of the Voluntary Partnership Agreement [VPA]. The Ghana-EU VPA Joint Monitoring and Review Mechanism [JMRM], which included representatives of stakeholder groups, was tasked to oversee implementation of the agreement. The JMRM reviewed the status of development of Ghana’s timber legality assurance system and also discussed outstanding issues to be addressed in the joint action plan, the last step before ratification of the agreement and the start of FLEGT licensing. The Minister of Lands and Natural Resources, Nii Osa Mills, said when the FLEGT licenses are issued Ghana’s timber products would enter the European market without the EU importers having to comply with the due diligence obligations of the EU Timber Regulation. According to the Minister, the country has made progress in forest governance by clarifying its forest management plans and improving transparency which has brought Ghana closer to licensing and easier access to the EU market. The development of the national timber legality assurance system would also help Ghana resolve legality issues in the domestic market. To track progress in the national timber legality assurance system, the JMRM decided to meet in August for the next assessment. Ghana signed the VPA with the EU in 2009 aiming to ensure verified legal wood products are produced for export and the domestic market. The issue of legality is of particular importance in the domestic market where large volumes of illegally sourced and chainsawn timber are sold.
[ITTO 16-31/03/16]
UNIDO Training For Timber And Furniture Lab UNIDO recently concluded a training programme for staff at Ghana’s Timber and Furniture Laboratory in the Forestry Research Institute. The training focused on building capacity for ISO/IEC 17025 certification and was supported by UNIDO’s ‘Trade Capacity Building Programme. The training at the Forestry Research Institute was part of a series of events for all agencies and institutions to assist them meet international market demands. Forestry Research Institute of Ghana [previously the Forest Products Research Institute] is located at Fumesua near Kumasi.
[ITTO 16-31/03/16]
Kenya
Kenya To Plant 20 Million Trees To Reverse Deforestation Forest destruction is a problem in Kenya. Of its 30,000 km2 of tree cover, more than 8% was lost between 2001 through 2014 - an area of forest about the size of the U.S. state of Rhode Island. But the Kenyan government has now launched a major initiative to reverse that trend and restore the country’s upland forests. Through the “20 Million Trees for Kenya’s Forests” initiative, Kenya aims to plant a total of 20 million trees in and around Mount Kenya and other highland forests, known as Water Towers because of their role in conserving the country’s rivers, lakes and fresh drinking water.
[Mongabay 20/04/16]
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COMMODITY NEWS
TIMBER
South Africa Competition Between African And SE Asian Timber Heats Up
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In South Africa stocks of imported meranti picked up prior to the Chinese New Year celebrations in SE. Asia and importers priced up stocks at the latest rand exchange rate. Sales of US hardwoods are weak but SE Asian meranti exporters have now dropped prices slightly which has helped with their competition with West African hardwoods. Buyers in South Africa are now waiting to see if West African mills react to the lower meranti prices.
[ITTO 1-15/04/16]
COMMODITY NEWS
TOBACCO Malawi Prices Hit US$1.84/KG
Tobacco prices in Malawi hit US$1.84/kg as President Mutharika opened the auction at Lilingwe Auction Floors on 13th April marking the official opening of 2016 Tobacco Marketing Season and giving hope of better prices for the leaf this year.
[Nyasa Times 13/04/16]
Price Disagreements Cause Tobacco Market Closure The tobacco market at the Lilongwe Auction Floors was temporarily suspended earlier this month following disagreements over prices between prospective buyers and farmers. Auction Holdings Limited [AHL] noted farmers protested after buyers offered them very low prices citing the quality of the leaf. The price of burley leaf ranged between US$0.80-1.50. Economics and agricultural experts are urging the Reserve Bank of Malawi [RBM] to devalue the kwacha during this tobacco selling season to raise the dwindling prices.
[APA 15/04/16]
Zimbabwe
Tobacco Farmers Earn US$3.6 Million Zimbabwean tobacco farmers have earned about US$3.6 million from the sale of the leaf in the first week of the season, up 33% from the US$2.7 million realised in the same period last year. The golden leaf remains one of the country’s main sources of revenue, generating about US$700 million annually and accounting for a large chunk of export receipts. Two million kg has gone through the auction floors, 55% more than last year. Contract sales reached US$1.2 million from 509,261 kg while auction sales stood at 1.5 million kg worth US$2.4 million. From the 29,606 bales laid this year, only 2,032 were rejected. A decline in the percentage of rejected bales to 9.23% from 18.06% in 2015. Despite the increase in volumes, farmers are receiving lower prices for their crop than they got during the same period in 2015. TIMB says tobacco sold for an average price of US$1.79/kg, down from US$2.08 last year. Tobacco farmers have been receiving lower prices the past 3-years largely due to irregular rainfall patterns that have seen the quality of the leaf compromised. As a result, the number of farmers registered as tobacco growers has significantly declined to about 70,000 from over 100,000 in 2014. This season, tobacco volumes are expected to decline by 20% from the 198 million kgs produced in 2015 due to the El Nino induced drought which affected the crop.
[Southern Times 11/04/16]
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