COM-WATCH
AFRICA
ISSUE 63 | AUGUST 2016
CMA CGM: Specialist Handler Of Cocoa
03
Regional: London Cocoa Prices Hit 39-Year High
08
Cote d’Ivoire To Reduce Export Taxes For Cocoa Products
11
COM-WATCH
AFRICA
ISSUE 63 | AUGUST 2016
Contents 03 | Corporate
CMA CGM: Specialist Handler Of Cocoa
03 | General
Regional: Nestle Announces New CEO
05 | Cashew, Groundnut, Macadamia & Shea Regional: USAID Gives US$13 Million Shea Butter Boost Ghana: 5,000MT Of Cashew Imported From Guinea Bissau Guinea Bissau: ACA Sets To Host Cashew Festival Mozambique: Records Strong Rise In Cashew Sales Nigeria: Nigeria To Earn US$200 Million From Cashew Production Tanzania: Premier Directs Board To Remove Nuisance Levies
07 | Cassava
Ghana: Cassava Price Declines 14% In June Nigeria: Nigeria Eyeing 175,000 MT In 6-Months / Kwara Cassava Production Factories / Lokogoma Cassava Village
08 | Cocoa
Regional: London Cocoa Prices Hit 39-Year High / European Companies Threaten To Stop Importation Of Cocoa / Poor African Crops Send European Grind To 5-Year High / Barry Callebaut Group & Tony’s Chocolonely Announce Partnership Cameroon: Douala Cocoa Prices Rebound On Lower Supplies Cote d’Ivoire: Cote d’Ivoire To Reduce Export Taxes For Cocoa Products / Arrivals Down 10% By June 30 / Cool, Cloudy Weather Worries Farmers Ghana: Ghana Takes Giant Steps To Boost Production
13 | Coffee
Kenya: Government Sets Aside Funds For Coffee Debts / Rains Boost Coffee Yields / Baringo Governor Signs Korean Coffee Deal Rwanda: Export Revenue Drops By 5% In 2015-16 Tanzania: Coffee Exports Earn US$135 Million Tanzania/Uganda: Fear As Coffee Disease Threatens Crops Uganda: Coffee Exports Drop / May Miss Export Target
17 | Cotton & Textiles
Regional: WTO Consultations On Cotton Cameroon: Fcfa 900 Million Contract To Be Won At Sodecoton For Packaging Supply Mali: Chinese Company Transforms Cotton Nigeria: Monsanto Introduces GMO’s Into Nigeria South Africa: Textile Union Agrees 8.25% Industry Wage Hike Tanzania: Indicative Cotton Price Pegged At 1,000/-KG
19 | Fish
Regional: Crack Down On Illegal Fishing Angola: UN Finances Fishing Project
20 | Foodstuffs, Livestock & Beverages
1
Regional: Africa’s Largest Coca-Cola Bottler Begins Operations Ghana: New Bird Flu Outbreaks Mozambique: India To Purchase Pulses Namibia: First African Country To Export Beef To The US Nigeria: FADAMA III Project South Africa: South Africa Focuses On EPA Gains / Proposals On Taxation Of Sugar Sweetened Beverages
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 | Fruit, Vegetables & Horticulture
Regional: 6th PMA Fresh Connections Expo West Africa: WATH Mango Season Training Targets 4-Countries / Armao Formed To Promote Mango Angola: Novagrolider To Export Bananas To Europe Cote d’Ivoire: Revitalising Banana Farming Ghana: US Contributes US$10 Million To Improve Export Standards Kenya: Brexit Costs Fruit Shippers US$79,000 A Day As Pound Hit Morocco: Abu Dhabi Group Invests In Fruit Industry / Threat For Moroccan Tomatoes Within EU South Africa: Soft Citrus Volumes Up / Fruit & Wine Exports On The Rise / Fruit Growers Set Sights On Italy / Sundays River Citrus Company New Packhouse / GOGO Citrus Exporter Opens New Packhouse / Famous Brands To Capitalise On Tomato Paste Shortage Tanzania: New Airport Cold Storage To Boost Fresh Exports Uganda: Russia To Ban Uganda Imports / Djibouti To Import Fruit Products
30 | Palm Oil
Regional: 4th Africa Palm Oil Value Chain Summit Angola: Global Solutions Invests US $113 Million To Satisfy Cooking Oil Demand Rwanda: Standards Board Prepares For Essential Oils Export Senegal: Senegal Invites Indonesia To Develop Palm Oil Refinery
32 | Sugar
Ethiopia: Importation Of Sugar Continues Kenya: Kenya To Relax The Rules On Importation Of Sugar Mauritius: Sugar Revenue To Jump 25% Nigeria: NSDC Identifies 10 Sites For Sugar Factories Rwanda: Government To Set Up Mega Sugar Factory Tanzania: Sugar Act For Review To Boost Production / Outgrowers To Benefit From 3 New Mini-Sugar Plants / Mikumi Sugar factory To Be Constructed 2017 Zambia: Zambia Sugar Commissions US$80 Million Expansion Project / Refined Sugar Production Capacity Doubles In 2016 Zimbabwe: Raw Sugar Producer Price Up 2.6%
37 | Tea
Kenya: Tea Prices Fall To 10 Month Low / Sombogo Tea Factory / Growers Hampered By High Labour Costs Adding 9% Zambia: ZAFFICO to run Kawambwa Tea
38 | Timber
Regional: Brexit Likely To Slow Tropical Imports In The Short Term Central/West Africa: B2B Timber Trade Portal Now Online / Convergence Of Factors Drives Sapele And Sipo Prices Lower / Chinese Importers Showing Interest In Okoume Veneers / Ghana, Cameroon And Gabon Become PEFC Members East Africa: Countries Agree Measures For Implementation Of Zanzibar Declaration Angola: Angola Will No Longer Need To Import Plywood Cameroon: UK Sanctions Cameroon Timber Traders For EU Violations Gabon: Still No News On Kiln Drying Regulations Ghana: Q1 Export Contract Volumes Drop 28% Kenya: Kenya Hosts Timber Trade Forum Zambia: Suspension Of Forest Concession Licences Lifted
44 | Tobacco
Malawi: Buyers Urged To Honour Contracts With Growers Zambia: Farmers Call For Tobacco VAT Exemption / Savanna Tobacco To Raise US$10 Million For Expansion Zimbabwe: Tobacco Crop Surpasses Target 2
COMMODITY NEWS
CORPORATE CMA CGM: Specialist Handler Of Cocoa Next month the African main cocoa crop season kicks off! As a main player on the African trades CMA CGM has the flexibility and knowledge to offer tailor made solutions in the transportation of such important commodities. We review our specialist handling of cocoa by interviewing Diane Villemur from our West African export desk. What are the main load ports for cocoa? Cocoa is mainly found in coastal countries. Our main load ports are Abidjan & San Pedro [Cote d’Ivoire], Douala [Cameroun], Tema & Takoradi [Ghana]. We also ship cocoa from Lagos [Nigeria], Freetown [Sierra Leone], Monrovia [Liberia], Conakry [Guinea] and Matadi [DRC]. Out of East Africa we ship land-locked Ugandan cocoa via the coastal ports of Mombasa in Kenya and Dar es Salaam in Tanzania. Our various lines offer weekly services and we endeavour to offer quick transit times to both Europe and the Far East. Quick delivery at final destination is also a key factor in ensuring that cocoa arrives in good condition depending on local equipment, handling capacity of warehouses and administration/customs regulations. What are the main export destinations? The main export destinations are Europe and the Americas who have an appetite for chocolate and where consumption tends to stabilise. But the challenge is the growing import markets in Asia and Brazil. In order to face this increasing consumption in future it is imperative for producing countries to expand their production while improving the quality of their beans too. Programmes are being implemented by the industry and government led policies promoting agricultural and financial benefits hope to encourage and help farmers develop their activity in cocoa beans production. How is cocoa transported? Specialists in handling tropical and soft commodities including cocoa and coffee, CMA CGM has acquired extensive experience in the carriage of cocoa. We ship all types of cocoa either as beans or as products such as cake, liquor, butter, or powder. Cocoa beans are mainly transported in containers. When not, they are transported in bulk-vessels either loose in the holds or as break-bulk in bags. We offer shipments in containers and in this case cocoa beans are carried either in bags or in bulk. Cocoa bags of 60-kgs are mainly shipped in 40’ containers [25 MT] but also in 20’ [12.5-14.5 MT]. Shippers pay close attention to the dressing material they use to protect the cargo from condensation and wet damage. The key factor though, to ensure good quality cocoa beans on arrival is the degree of dryness of the beans prior to shipment. In bulk, 16.7 MT are stuffed behind a polypropylene bulkhead held by steel bars across the front. On arrival, the polypropylene bulkhead is opened at the bottom, to let out the cocoa beans. What specialisms does CMA CGM offer? Each local agency office offers expert advice in the handling of cocoa. We pride ourselves on having a thorough understanding of the market. Our know-how and expertise are based on the close and regular contact we keep up with our customers at both ends of the transport chain, as well as with the different actors involved: final receivers, warehouse keepers, port terminals and other industry stakeholders. We have specialist cocoa representatives who have years of knowledge and are on hand to offer advice throughout the transportation process.
For more information on our specialists services, please contact your local agent. 3
COMMODITY NEWS
GENERAL
Regional Nestle Announces New CEO Nestle SA named Ulf Mark Schneider as successor to Chief Executive Officer Paul Bulcke. Schneider, will join from health-care provider Fresenius SE, where he has been CEO since 2003. He will join on Sept. 1 and start as CEO on Jan. 1 after an introductory period. The move supports Nestle’s goal to move beyond its roots and redefine itself as a scientifically-driven nutrition and health company.
[Bloomberg 27/06/16]
4
COMMODITY NEWS
CASHEW, GROUNDNUT, MACADAMIA & SHEA Regional USAID Gives US$13 Million Shea Butter Boost Six West African countries have received US$13 million grant to produce shea butter: Benin, Burkina Faso, Côte d’Ivoire, Ghana, Mali and Nigeria. Funding would include holding annual conferences and exhibitions to promote shea butter in Africa, the US and in the European Union over 5-years. Money will also enable 250 shea butter depots.
[Today 18/07/16]
Ghana 5,000MT Of Cashew Imported From Guinea Bissau USIBRAS Ghana Limited is importing 5,000 MT of raw cashew nuts [RCN] from Guinea Bissau due to the limited access to high quality nuts in Ghana. On July 5th it received the first shipment of 3,500 MT from Melo Ltda and is expecting the second shipment of an additional 1,500 MT to supply their current factory demands. USIBRAS noted the need for prompt policies on the taxation of RCN exports, the establishment of a 2-months export window for RCN, a minimum price for farmers per season and a long-term plan for the sustainable development of a flourishing cashew sector. USIBRAS’s facility has an installed processing capacity of 30,000 MT/yr but only operates on only 6,000 MT/yr, due to domestic shortages in raw materials. Ghana produces 68,000 MT/yr with a total installed capacity across all 13 existing processors at 65,000 MT/yr.
[Ghanaweb 18/07/16]
Guinea Bissau ACA Sets To Host Cashew Festival In order to ensure a better cashew value chain process worldwide, the African Cashew Alliance [ACA], has concluded arrangement to host its 10th Annual World Cashew Festival and Expo from 19-22 September, in Bissau, Guinea-Bissau, with the theme, ‘A decade of transformation.’ This year’s conference marks the 10th anniversary of the ACA which started in Guinea Bissau. The conference will focus on major developments in the cashew sector over the past 10 years and the future evolution of the industry. The World Bank will attend focusing on private sector rehabilitation.
[ACA 18/07/16]
5
Mozambique Records Strong Rise In Cashew Sales Around 100,000T of cashew nuts have been sold at a combined value of US$23.1 million during the 2015/16 cashew nut campaign in Mozambique, according to officials from the country’s national cashew nut research institute Incaju. Up 25% on the 80,000T of nuts sold in the previous season.
[Reuters 06/07/16]
Nigeria Nigeria To Earn US$200 Million From Cashew Production Over the next 2-years, Nigeria is set to earn US$200 million from cashew nut production. The industry is set to increase by 30% as part of a renewed government focus. Efforts include the development of additional plantations, distribution of improved seedlings, enforced good agricultural practices. The Nigeria Export Promotion Council [NEPC] has run a workshop on cashew processing and Market Information Systems in Lagos noting Nigeria was expected to earn an average price of US$1,200/T in the international market. Nigeria’s cashew output stood at 150,000 and 130,000 MT in 2014 and 2013 respectively. To further improve production the NEPC is working with the USAID-Nigeria Expanded Trade and Transport [NEXTT] project to develop a cashew sector strategy for the cashew value chain to improve quality and enhance transparency of the industry by developing a Market Information System.
[Vanguard 18/07/16]
Tanzania Premier Directs Board To Remove Nuisance Levies Prime Minister Kassim Majaliwa has directed the Cashewnut Board of Tanzania [CBT] to implement his directives of removing 5 out of 9-nuisance taxes that farmers were required to pay. The Prime Minister also directed the Cashew nut Industry Development Trust Fund to conduct research to determine the reason behind low production of cashews in the country. [Daily News 18/07/16]
6
COMMODITY NEWS
CASSAVA Ghana
Cassava Price Declines 14% In June Despite the significant increases recorded between April and May this year, the price of cassava is now declining. Commodity figures released by Esoko Ghana for the first week in July showed that cassava prices recorded the highest drop of 4%. It is the fourth consecutive time that the price has dropped. Groundnut, soyabean, cowpea and tomato prices also fell.
[Citi 97.3FM 01/07/16]
Nigeria Nigeria Eyeing 175,000 MT In 6-Months Nigeria is expected to record increase in its cashew nut production in coming years due to renewed focus by the government and increasing demand for the commodity across developed countries and Asia. According to the Nigeria Export Promotion Council, cashew is expected to yield 175,000 MT at the end of this year’s trading season, up from a yield of 150,000 MT in 2015. Recent governmental efforts in the development of additional cashew plantations, distribution of improved seedlings to farmers; enforced good agricultural practices will all go to increase output of cashew nuts in Nigeria by 30% in 2-years. Nigeria is rated as the 4th largest producer of cashew nuts in Africa and 7th in the world, with the bulk of its raw cashew nuts and cashew kernels exported to Vietnam and India, respectively.
[Naija247 21/07/16]
Kwara Cassava Production Factories Two American based investors, Ecotech-rab and Tranfeed Group along with their Nigerian partner, Satco Global Group will in the next 18 months establish cassava production and processing factories in Kwara State. The factories to be sited in Edidi, Irepodun local government area of the state are expected to cost US$100 million.
[Nation 07/07/16]
Lokogoma Cassava Village A new cassava village in Lokogoma is to target youth and women in Niger State. The International Fund for Agricultural Development [IFAD]-Value Chain Development Programme, is behind the idea behind which aims to lift cassava production in the state.
[Nigeria Today 02/07/16]
7
COMMODITY NEWS
COCOA
Regional London Cocoa Prices Hit 39-Year High Cocoa prices have seen increased volatility since Britain decided to leave the European Union. London cocoa prices soared rising to £2,495/T its highest price since 1977. A steep drop in the pound contributed to the rally, with the pound hit a 31-year low. The plunging pound supported London cocoa prices as it made it cheaper for holders of non-UK currencies to buy sterling-based cocoa futures positions. All cocoa futures are benefiting from concerns over the cocoa crops in top producer, The Ivory Coast. Right now, crop yields appear to be disappointing, with Commerzbank noting that deliveries of cocoa to Ivory Coast ports are running 11% behind the pace of last year’s deliveries. This is partially due to quality concerns with the current crop, with many beans not meeting the size and quality required to satisfy export requirements. A supply deficit is possible for the 2015-2016 crop. In addition, weather could impact the Ivory Coast’s next crop, which is the country’s main crop, making it the most important cocoa crop with the Ivory Coast the world’s top cocoa producer. The July to August period is crucial for the development of the October-to-March crop, and right now the crop needs more rain and sun to boost its size. If this rain does not come, and a cool wind hits, it could kill the crop’s flowers and pods.
[Economic Calendar 07/07/16]
8
COMMODITY NEWS
COCOA Regional
European Companies Threaten To Stop Importation Of Cocoa Some European companies have threatened to halt the purchase of cocoa beans from Ghana and Cote d’Ivoire if the quality of the commodity from the two countries is not improved. The warning was sounded to the 2-countries after unfavourable weather patterns this year negatively affected light crop yield. For example the Ghana Cocoa Board has revealed that the light crop yield for the season dropped from 15% of total crop yield to 8% of total crop yield. The Food and Agriculture Organisation [FAO] predicted a fall in cocoa yield this year if nothing is done to mitigate the repercussions of bad weather on cocoa yield, as the crop was predicted to suffer under the El Nino weather in 2016.
[Pulse 20/07/16]
Poor African Crops Send European Grind To 5-Year High According to the European Cocoa Association European cocoa processing climbed to a 5-year high in Q2 as poor-quality beans in West Africa spurred grinders to tap stockpiles elsewhere. Bean processing jumped 4.9% from a year earlier to the highest for that quarter since 2011. Processors are shifting grindings to Europe as the poor quality of crops in West Africa mean they haven’t been able to boost activity locally. Dry weather damaged the mid-crop, the smaller of two annual harvests in Cote d’Ivoire and Ghana, forcing factories to tap stockpiles in Europe at a time traders including Cargill Inc. and Olam International Ltd. forecast shortages. Grindings were expected to increase due to lower processing in West Africa and better margins, which gained from higher cocoa-butter prices relative to bean futures. Higher prices for earlierdated futures also made it expensive to store cocoa through the summer. Cocoa futures traded in London jumped 10% this year partly as dry weather damaged beans in West Africa. The dry weather earlier this year has led to smaller beans with less fat content during the mid-crop. Cocoa that doesn’t meet export requirements might be held back for sale into the next season, meaning the perceived shortage may increase over the summer months. Higher grindings don’t reflect rising demand. Global chocolate sales fell 2% in the nine months through May, with the market contracting 1.2% in Europe, the Middle East and Africa, 3.3% in the Americas and 2.1% in Asia.
[Bloomberg 12/07/16]
Barry Callebaut Group & Tony’s Chocolonely Announce Partnership The Barry Callebaut Group and Tony’s Chocolonely announced a strategic partnership agreement to produce chocolate from fully traceable sustainable cocoa. Barry Callebaut has installed a dedicated cocoa butter tank in its factory in Wieze/Belgium to produce cocoa butter from traceable beans sourced from Tony’s Chocolonely’s partner cooperatives in Côte d’Ivoire. With the cocoa liquor already being produced from beans from their partner cooperatives in Côte d’Ivoire and Ghana, all cocoa products in Tony’s Chocolonely’s chocolate will be traceable.
[Newswire 19/07/16]
9
Cameroon Douala Cocoa Prices Rebound On Lower Supplies Cocoa prices rose 4.3% from last week at Doula port due to low supplies of the beans. A kilogram of beans was selling for 1,863 CFA [US$3.14] up from 1,786 CFE/kg a week ago. The country’s mid-crop cocoa production is gaining steam after a delay. Mid-crop harvests routinely run from May/June and end in August/September, but months of extensive dry weather have caused concerns that this year’s output could fall further than expected. Cameroon produced over 232,000 MT in the 2014-2015 season.
[Nasdaq 11/07/16]
10
COMMODITY NEWS
COCOA Cote d’Ivoire
Cote d’Ivoire To Reduce Export Taxes For Cocoa Products The Ivorian government has announced reduced export taxes for cocoa products in a bid to encourage production and processing in the country. Cote d’Ivoire is aiming to grind half its production domestically by 2020, up from about a third now. The government scrapped a 20-year-old regime of tax breaks for processors at the start of the 2012/13 season. Companies have been in talks with the Coffee and Cocoa Council [CCC] for the last 2-years to agree on a new scheme that would reward firms that grind locally. According to the Government taxes on exports of cocoa butter will fall to 11% from 14.6% and taxes on cocoa mass will drop to 13.2% from 14.6%. The export tax on cocoa powder will fall to 9.6% from 14.6%. Trading houses such as Barry Callebaut, Olam and Cargill will be allowed to increase their processing capacity by 7.5%. And smaller processors will be able to expand by 1015%. The changes are pending formal contracts to be signed between processors and the government. The CCC has also proposed a system of forward sales reserved for grinders. Each day, grinders will have their own auction in which they do not have to compete with traders for beans. Cote d’Ivoire’s 12 local grinders possess installed processing capacity of 720,000T annually, but most facilities run at 60-80% of capacity.
[Reuters 01/07/16]
Arrivals Down 10% By June 30 Ivorian cocoa arrivals reached 1,394,982 MT by June 30 since the start of the season on Oct. 1, down from 1,548,523 MT in the same period of the previous season. The official figure from the marketing board, the Coffee and Cocoa Council [CCC], is lower than the 1,412,000 MT of beans exporters estimated had been delivered to the ports of Abidjan and San Pedro.
[Reuters 06/07/16]
Cool, Cloudy Weather Worries Farmers Cool, cloudy weather and patchy rainfall in most growing regions could hinder the development of the next main crop. Weather in July and August is crucial to determining the size of the October-to-March cocoa main crop. Farmers said prolonged cloudy and cool weather could prevent cocoa trees from reaching reach their full potential. The April-September mid-crop is tailing off and the focus now is on the forthcoming October-to-March main crop. Farmers said the next 2-months are crucial as plantations need the right mix of sun and moisture to trigger abundant flowers and help them turn into pods to ensure a productive first 3-months of the coming campaign. Early signs suggest the main crop could be around a quarter below its 4-year average due to a long dry season for which the current weather has failed to compensate.
[Reuters 12/07/16 & 27/06/16]
11
Ghana Ghana Takes Giant Steps To Boost Production Ghana’s effort at increasing its cocoa production has taken a giant step forward with the establishment of 20 Rural Service Centres [RSCs] to aid farmers adopt best farm management practices to raise the per hectare yield. The Centres spread across 14 districts in the cocoa belt - Ashanti, Brong-Ahafo, Western and Central Regions - are an integral part of the Cocoa Rehabilitation and Intensification Programme [CORIP], implemented by Solidaridad together with Cocobod, the International Fertilizer Development Company and other private sector partners. They serve as one stop shop for comprehensive range of services - training farmers on best agronomic practices, assisting them to rehabilitate their farms, renew farms through complete seedlings replanting or canopy substitution through grafting of aged trees. The goal is to raise the average per hectare yield from the present 450kg to levels such as Brazil and neighbouring Cote d’Ivoire where farmers reach yields of 1,200-2,000kg.
[Ghanaweb 02/07/16]
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 Jul 16
2165.80
3023.37
2317.33
2964.00
4 Jul 16
2187.35
3053.46
2330.33
2997.67
5 Jul 16
2204.04
3078.69
2393.33
3031.33
6 Jul 16
2226.78
3101.59
2431.00
3054.67
7 Jul 16
2240.99
3122.06
2449.33
3071.00
8 Jul 16
2236.45
3114.41
2438.00
3064.67
11 Jul 16
2245.41
3120.27
2436.37
3068.00
12 Jul 16
2257.32
3142.05
2409.67
3084.67
13 Jul 16
2273.02
3163.88
2433.67
3110.33
14 Jul 16
2289.79
3185.60
2422.67
3129.67
15 Jul 16
2227.73
3105.28
2394.00
3042.33
18 Jul 16
2259.49
3138.04
2411.00
3063.67
19 Jul 16
2201.75
3056.00
2379.00
2986.00
20 Jul 16
2192.19
3037.30
2361.00
2956.67
21 Jul 16
2156.37
2989.03
2311.67
2915.33
22 Jul 16
2142.39
2968.17
2325.67
2883.67
25 Jul 16
2119.35
2934.10
2288.33
2854.00
26 Jul 16
2113.68
2931.42
2286.00
2849.67
27 Jul 16
2121.00
2937.89
2300.00
2853.00
28 Jul 16
2110.29
2933.98
2285.00
2852.67
12
COMMODITY NEWS
COFFEE Kenya
Government Sets Aside Funds For Coffee Debts The government has set aside Sh2.4 billion in the 2016/17 year in addition to the Sh4 billion previously released to cater for the remaining debts in coffee societies. The government started debt waivers in 2003 to give the struggling coffee societies a new lease of life after a lean period in the 1990s.
[Capital FM 03/07/16]
Rains Boost Coffee Yields Kenya may get a bumper harvest later this year as rains in key growing areas boost yields. Rains have been favorable in topgrowing areas of Mount Kenya, Machakos and Central Province, and bean size and quality will be good. A good harvest is expected both for the early crop and the main harvest from September to December at a time when prices are the highest in more than a year. Arabica has rallied as low exchange inventories attract investment from funds. Speculators have the biggest bullish bet since 2014, U.S. government data show. In September Grenville Kiplimo Melli, the interim director at Kenya’s Coffee Directorate, said this season’s output may climb 18% to 45,000 MT and that the nation is targeting production of as much as 100,000 MT within 5-years.
[Bloomberg 15/07/16]
Baringo Governor Signs Korean Coffee Deal The Baringo county government has signed a Memorandum of Understanding [MoU] with 2-Korean firms for the development of the coffee value chain. The agreement with Good Beans Limited and Bosung Company to the tune of Sh202 million will see the establishment of a coffee processing and packaging plant. There will also be a Coffee Business Information Centre that will be a reference point for marketing coffee products on the global market. An earlier Sh101 million MoU signed with Korea’s World Best Friend and Korea International Co-operation Agency has seen the ongoing implementation of coffee industry revival programmes, which included training and the distribution of seedlings to farmers in coffee-growing areas.
[Standard Digital 20/07/16]
13
Rwanda Export Revenue Drops By 5% In 2015/16 Rwanda’s coffee export revenues dropped by 5.17% to US$60.7 million last fiscal year, from US$64.03 million registered the previous year, a new National Agricultural Export Board [NAEB] report indicates. This represents a decline of over US$3 million in revenue. The year’s earnings were also way below the US$76.2 million target NAEB had projected. The agro-export body attributed the decrease to the drop in global coffee prices over the reporting period. On average, prices for the beans have declined from US$3.87/kg during 2014-15 coffee year to about US$3/kg this year. However, the volumes exported increased to 19.6 million kg over the period, up from 16.5 million kg exported the previous year. Total coffee production rose from 16.9 million kg during the 2014 to 2015 period to 20.03 million kg in the last 12 months to June 30. That equates to an 18% increase in production or an additional 3.1 million kg. NAEB attributes improved performances to good agronomical practices, as well as the embracing of washing stations, among other initiatives. NAEB is emphasising value-addition, and encouraging farmers and co-operatives to take advantage of coffee washing stations to boost the quality and volumes. There are currently 229 coffee washing stations across the country. Rwanda exports about 42% of its coffee to Switzerland, 12.4% to the United Kingdom, and 20.9% to the United States. South Africa takes 5.8% of the beans, 0.5% go to Germany, and 1.5% to South Korea. Under a 5-year strategic plan guiding production, NAEB aims at increasing exports by 29% annually, and generating more than US$104.3 million in earnings by 2018, up from US$60.9 million in 2013.
[New Times 21/07/16]
14
COMMODITY NEWS
COFFEE Tanzania
Coffee Exports Earn US$135 Million Coffee exports earned the country US$135 million in foreign exchange during the 2015/2026 farming season as the country produced 59,000 MT, which is above average annual production of 50,000 MT. Meanwhile the Tanzania Coffee Board [TCB] is currently working to boost local consumption of coffee to avoid over dependency on foreign markets. Local consumption of coffee is currently at between 5-7%, but TCB is to target 15% in 10-years.
[Daily News 06/07/16]
Tanzania/Uganda Fear As Coffee Disease Threatens Crops Government authorities in Kagera Region are closely monitoring the deadly Black Twig Borer, which is reported to have caused loss of million shillings to coffee farmers in Uganda. A severe infestation can kill host plants, including large trees. The Tanzania Coffee Research Institute [TACRI] is closely monitoring the situation. Average production of coffee in Tanzania stands at 50,000 MT but the rate is likely to drop to 48,000 MT in the coming farming season. Tanzania mainly exports its coffee to Japan [Arabica] and Italy [Robusta]. China and Russia are among new markets for Tanzanian coffee.
[Daily News 08/07/16]
15
Uganda Coffee Exports Drop Uganda recorded a decline in both value and volume of coffee exports. Experts say if this trend lingers, it will negatively impact annual productivity. According to Uganda Coffee Development Authority’s [UCDA] latest monthly report, in May, the country exported over 286,000 kg bags, down from 326,000 bags exported in April. Revenue declined to US$27.5 million [Shs91 billion] from US$31 million [Shs105 billion] earned in April. UCDA attributes this decline to short-rain patterns which did not facilitate the ripening on the coffee cherries. However, UCDA predicts an increase in output of at least 290,000 60-kg bags in this season as South Western regions and fly crop in Bugisu region begins. In terms of individual coffee exporting companies in the month of May, Kyagalanyi Coffee led the export market share followed by Ugacof Ltd, Export Trading, Ideal Commodities Ltd, Olam Ltd, Ibero and Kawacom respectively.
[Monitor 05/07/16]
May Miss Export Target Coffee exports from Uganda may be about 5% less than a forecast from the industry regulator as drought cuts yields. Exports in the 12 months through September may drop to 3.6 million 60-kilogram [132-pound] bags according to the Kampala-based National Union of Coffee Agribusinesses and Farm Enterprises. That compares with a 3.8 million-bag target given by the Uganda Coffee Development Authority last year. Drought in the last 2-months has strained the crop in southern and southwestern regions, where the main harvest is underway. The two areas account for more than 40% of the nation’s annual coffee output. The outlook for reduced exports comes at a time when robusta-coffee prices are near their highest in more than a year. In the last season, almost 80 percent of coffee produced in Uganda, or 2.72 million bags, was of the robusta variety. Shipments from October through May totalled 2.28 million bags, compared with 2.11 million bags in the year-earlier period.
[Bloomberg 20/07/16]
16
COMMODITY NEWS
COTTON & TEXTILES
Regional WTO Consultations On Cotton The WTO has held its latest consultations on cotton this month, which included the 5th dedicated discussion on trade-related developments for cotton as well as Director General’s Consultative Framework Mechanism on Cotton. The discussions were the first since WTO members adopted a decision on cotton at their 10th Ministerial Conference in Nairobi last December. The decision requires developed countries to eliminate export subsidies for cotton immediately and for developing countries to do so by 1 January 2017. The Nairobi decision is key to improve market access and eliminate export subsidies for cotton. Speaking for the “cotton four� [C4] countries - Burkina Faso, Benin, Chad and Mali - whose economies largely rely on cotton exports, consultations noted that domestic support programs of major producers were continuing to put downward pressure on global prices to cotton, to the detriment of C4 farmers and noted a call for more action to address distortions to trade.
17
India has supported this demand from the C4 countries. The Indian government is of the view that countries providing cotton subsidies should release information related to support per farmer, the average earnings of farmers, and the average size of agricultural field, for better analysis of subsidies provided by various governments. At over US$24 billion, the US is the biggest subsidy provider to cotton growers. The country is also the largest exporter of cotton, which affects the economies of C4 countries which largely rely on cotton exports.
[NBE 08/07/16]
Cameroon Fcfa 900 Million Contract To Be Won At Sodecoton For Packaging Supply The government has launched a bid for providers to deliver a cargo of 500,000 stockings to package cotton to be delivered in 2-batches. The contract is worth FCfa 900 million. Bidders have up to 1st August 2016 to submit their offers, with a deposit of FCfa 9 million.
[Business in Cameroon 28/06/16]
Mali Chinese Company Transforms Cotton Malian Company for Textile Development [CMDT] will soon be able to process locally produced cotton. According to a partnership agreement signed between WTDC and Chinese company Qingdao Ruichang Cotton Industrial Limited, the latter will invest US$300 million for the construction of 3-cotton ginning factories and 2-spinning factories in Mali to be operational by 2017. Currently Mali the largest cotton producer processes < 2% of its production.
[Xinhua 16/07/16]
Nigeria Monsanto Introduces GMO’s Into Nigeria Despite Burkina Faso’s abolishment of Genetically Modified cotton, Nigeria’s National Biosafety Management Agency [NBMA] granted two permits to Monsanto Agriculture Limited, allowing for the commercial release and placing on the market of genetically modified crops. Monsanto Agriculture Limited was officially granted permission to introduce GM cotton and undergo a confined field trial of maize. The decision to adopt pest resistant GMO seeds was taken in an effort to improve crop yields and decrease the use of pesticides that can pose a health risk.
[Ventures 02/07/16]
South Africa Textile Union Agrees 8.25% Industry Wage Hike Textile union Southern Africa Clothing and Textile Workers’ Union [SACTWU] has agreed a 8.25% wage increase with employers in the cotton sector. The deal represents an above-inflation increase for SACTWU’s 4,630 members and will apply to all employers in the sector.
[Reuters 18/07/16]
Tanzania Indicative Cotton Price Pegged At 1,000/-KG The Minister for Agriculture, Livestock and Fisheries, Dr Charles Tizeba, announced the indicative price for cotton in this year’s season is 1,000/- per kilo. This price is set by Tanzania Cotton Board [TCB] as directed by the Cotton Industry Act of 2001 simply because the Tanzania Cotton Growers Association [TACOGA - farmers], the Tanzania Cotton Association [TCA - ginners and buyers] could not reach an agreement. The indicative price of cotton for the 2014/15 season was 750/- per kilogramme in which cotton production for the season was estimated at 250,000MT. In view of the problems that arise during the pricing process, experts recommend that a simple pricing mechanism with independently determined variables should be agreed in advance of annual pricing negotiations by all stakeholders.
[Daily News 14/07/16]
18
COMMODITY NEWS
FISH Regional
Crack Down On Illegal Fishing West Africa must crack down on foreign fleets fishing illegally off its Atlantic coastline and build up their fisheries to protect the livelihoods of millions of people according to leading think-tank Overseas Development Institute [ODI]. Overfishing by foreign vessels is driving many species towards extinction and destroying livelihoods in Ghana, Liberia and Mauritania. Corruption and few resources for monitoring fishing mean foreign trawlers often venture into areas near the coast which are reserved for local fishermen. They are exhausting local stocks, often illegally, to the point of forcing local fishermen to go further out to sea to find fish, hugely increasing their costs. West Africa could also create thousands of jobs if governments invested in the maritime industry, instead of selling off fishing rights to foreign operators.
[Reuters 29/06/16]
Angola UN Finances Fishing Project Residents of Luanda, Kwanza Norte, Bengo and Malanje will benefit from a US$12.1 million project to support communal fish farming [aquaculture] launched by the Institute for Development of Artisanal Fishing and Aquaculture [IPA]. The project will run for 5-years. Funds are provided by the United Nations International Agricultural Development Fund. Negotiations are under way with the European Union [EU] to add another US$10 million to the project.
[Macauhub/AO 28/06/16]
19
COMMODITY NEWS
FOODSTUFFS, LIVESTOCK & BEVERAGES
Regional Africa’s Largest Coca-Cola Bottler Begins Operations Africa’s largest bottler, Coca-Cola Beverages Africa [CCBA], opened its doors on the 4th July. CCBA was formed in 2014 through the combination of African non-alcoholic ready-to-drink bottling interests of SABMiller, the Coca-Cola Company, and Gutsche Family Investments – majority shareholders in Coca-Cola Sabco. The new company, which is the 10th largest Coca-Cola bottler worldwide, will produce and distribute approximately 40% of all Coca-Cola beverage volumes in Africa.
[Engineering News 04/07/16]
CCBA FACTS -- HQ in South Africa -- Manufactures and sells 40 still and sparkling brands from more than 30 African bottling plants. -- Serves 14 high-growth countries including Namibia, Kenya, Uganda, Tanzania, Ethiopia, Mozambique, Ghana, Mayotte, Comoros and Nigeria. -- Botswana, Swaziland and Zambia are expected to be included in the next 12-18 months.
20
COMMODITY NEWS
FOODSTUFFS, LIVESTOCK & BEVERAGES Ghana New Bird Flu Outbreaks Two new outbreaks of highly pathogenic avian influenza have been found in Ghana’s Ashanti and Greater Accra regions. Ghana’s last avian flu report to the World Organisation for Animal Health [OIE] was in May. Ghana’s outbreaks have become less frequent following a spate of outbreaks last year. The farms noted 4,000 birds died and nearly 2,000 more were destroyed to prevent the disease spreading.
[Poultry Site 30/06/16]
Mozambique India To Purchase Pulses The Government of India has submitted a proposal to its Mozambican counterpart to sign a 5-year contract to purchase pigeon peas [toor dal] at a guaranteed minimum price of 5050 rupees per quintal [100 kg] to include a bonus of 200 rupees for the 2016/17 agricultural year plus the cost of transport. A draft contract has been presented to Mozambique. In the Indian market, pulses, including peas, lentils and beans are being traded at 198 rupees per kilo due to a drop in production after 2-consecutive years of drought.
[Macauhub/MZ 30/06/16]
Namibia First African Country To Export Beef To The US A final ruling from the US Food Safety and Inspection Service [FSIS] has approved the importation of boneless meat and other beef products from Namibia, making the country the first African nation to be approved for beef export to the US. Only 33 countries worldwide have been approved to export meat to the US. The decision will allow Namibia to export boneless [not ground] raw beef products such as primal cuts, chuck, blade, and beef trimmings from certified establishments to the United States. Beef exports to the United States could reach up to 860,000 kg in the first year, increasing to 5.7 million kg in 5-years. The ruling for Namibian beef to the US comes after the United States Cattlemen’s Association [USCA] initially opposed Namibian beef on the grounds of the potential risk of foot and mouth disease [FMD] spreading to that country’s livestock market as a result of Namibia’s proximity to FMD-affected countries Angola, Zambia and Botswana. The FSIS stated that Namibia’s laws, regulations, and inspection system are equivalent to the US inspection system for meat and meat products.
[African Farming 18/07/16]
21
Nigeria FADAMA III Project The Minister of Agriculture, Audu Ogbeh, said the World Bank would support FADAMA III Project in Nigeria with US$200 million. The project targets 4-value chains of cassava, rice, tomato and sorghum in 6-core states.
[Today 02/07/16]
South Africa South Africa Focuses On EPA Gains South Africa is moving to shore up the modest market-access gain made after more than a decade of negotiation with the EU on the Economic Partnership Agreement [EPA], which was signed in Botswana in June by the EU and 6-Southern African Development Community [SADC] members: Botswana, Namibia, Mozambique, Lesotho, South Africa and Swaziland. The EPA is due to be ratified by the various Parliaments in the coming months. Once ratified, South Africa will enjoy improved access for seafood, wine, canned fruit, sugar and ethanol, beyond the access already secured under the current Trade Development and Cooperation Agreement, which extends duty-free access to 65% of South African agricultural products. Under the EPA, the yearly tariff-free quota of 50-million litres of South African wine would be increased to 110-million litres, while 150 000 t/y of South African sugar and 80 000 t/y of ethanol could also be exported to the EU tariff free. In return, the EPA recognises over 251 European geographic indications including a range of wines, spirits, cheeses, meats and edible oils. South Africa has already started to communicate with EU member States, having raised the matter with the French in a recent bilateral meeting, that there should it does not expect any change to the tariff-rate quotas negotiated in the EPA.
[Engineering News 17/06/16]
Proposals On Taxation Of Sugar Sweetened Beverages The National Treasury on 8th July published for public comment a Policy Paper and proposals on the taxation of sugar sweetened beverages. A tax on sugar-sweetened beverages [SSBs] effective from 1st April 2017 is aimed at reducing excessive sugar intake. The suggested rate for the new tax is SAR 0.0229 per gram of sugar identified on the nutritional label. The tax will typically result in a tax of approximately 20% on most standard drinks. The document is available on the website of the National Treasury, www.treasury.gov.za.
[RNews 08/07/16]
22
COMMODITY NEWS
FRUIT, VEGETABLES & HORTICULTURE Regional 6th PMA Fresh Connections Expo This year will see the 6th edition of the PMA Fresh Connections in Southern Africa. The event, which focuses on the Southern African fresh produce supply chain, will take place 17-18 August in Pretoria. Some 600 attendees are expected from 15+ countries over 2-days. The event is themed “Taking Fresh to the Next Level” putting the spotlight on the Fresh Produce Industry and all the innovative and new opportunities which go with it. Suppliers from developing countries in Africa can also gain access to buyers at the PMA.
[PMA 19/07/16]
West Africa WATH Mango Season Training Targets 4-Countries To boost West Africa’s competitiveness in mango, the West Africa Trade Hub [WATH] organized best-practices training for hundreds of those working in the region’s mango value chain. The 3-month campaign started in Burkina Faso in April, followed by Ghana and Côte d’Ivoire in May, and finished in Senegal in June. Worldwide mango production is soaring, but West Africa’s harvests and exports remain relatively low. The Trade Hub’s trainings on harvesting best practices, better orchard management, proper hygiene in packing and handling, and Global Good Agricultural Practices [G.A.P.] certification will help prepare West African mango producers to attain quality standards required for export. For example last year Côte d’Ivoire’s mango production has grown rapidly from 100,000 to 150,000T, while exports rose to 30,000T a 36% increase from 2015. However, fruit flies and other phytosanitary issues persist, along with post-harvest loss, access to finance barriers, and high transport costs, as the Trade Hub identified in a needs assessment earlier this year.
[WATH 30/06/16]
Armao Formed To Promote Mango A new structure has been created in West Africa to improve, consolidate and promote the regional supply of mango in international markets. Armao [Regional Alliance Mango West Africa] brings together Burkina Faso, Ivory Coast, Gambia, Ghana, Guinea, Guinea Bissau, Mali and Senegal. The objective of the Alliance is to raise awareness of the West African mango, improve production, produce year round and export for 12 months, by utilising the different production schedules in these 8 countries. West Africa has an annual production of about 1.3 million tonnes of mangoes, almost 4% of world production. But post-harvest losses are high [often between 40% and 50%] and only 40,000 tonnes of fresh mangoes are exported [5.4%], and 50,000 tonnes were processed [6.8%].
[Fructidor 18/07/16]
23
Angola Novagrolider To Export Bananas To Europe From October, Angolan company Novagrolider plans to start exporting 200T of bananas a week to Portugal, Spain and France. Novagrolider produces 150,000T of various products. With an investment of US$200 million, Novagrolider has production areas in the provinces of Kwanza Sul, Bengo and Luanda and will expand its structure to the provinces of Huíla and Cunene, for the production of fruit and vegetables.
[Macauhub 18/07/16]
Cote d’Ivoire Revitalising Banana Farming In June 2014 floods wiped out 1,300 ha of banana or 22% of Cote d’Ivoire’s national production estimated at 300,000T. Over 50,000T of banana at the Nieky plantation were destroyed. With funding from the European Union [EU] and the government the sector has now resumed normal production. A grant for €4-million from the EU and the Sociéte de Culture Bananière’ [SCB] meant the country could rebuild banana farming. Two multinational subsidiaries share the country’s main banana production: SCB controls 56% of banana exports whilst BANADOR [subsidiary of the CHIQUITA Group] controls 27%. The remaining 17% is controlled by local independent producers within the organisation of producers and exporters of pineapples and bananas. The country is now aiming at producing at least 21,000T of bananas per year from 2019.
[AFP 22/07/16]
Ghana US Contributes US$10 Million To Improve Export Standards The US has implemented a project, involving a US$10 million investment, to help Ghana’s agricultural sector to meet international standards and guidelines for its produce. The project is aimed at strengthening sanitary and phytosanitary compliance of agricultural produce in Ghana. The initiative is part of the Trade Africa Initiative which, among other things, is designed to build partnerships between the United States and sub-Saharan Africa to increase internal and regional trade within Africa. It comes at a time Ghana’s vegetable exports to the European market have been banned because they do not meet the required international standards.
[Fresh Plaza 30/06/16]
24
COMMODITY NEWS
FRUIT, VEGETABLES & HORTICULTURE
Kenya Brexit Costs Fruit Shippers US$79,000 A Day As Pound Hit Britain’s decision to leave the European Union [EU] is costing Kenyan fresh-produce exporters 8 million shillings [US$79,000] a day as the pound slumped against the dollar. The Pound weakened 12% against the dollar since 23rd June when the country voted to end its membership of the trading bloc. Kenya’s biggest customers are in the U.K. accounting for more than half of Kenya’s fresh-produce exports. Traders pay for freight in U.S. dollars and receive payments in pounds. This makes the equation instantly bad.
25
Kenya’s tea industry may fare better according to the East African Tea Trading Association [EATTA]. Exporters in the world’s biggest black-tea exporting nation may be able to take away market share from the U.K., which reexports to European nations, by setting up direct trading links. The U.K. imports 65,460 MT of tea a year from Kenya, about half of the total it buys from overseas markets. Blenders in the U.K. repackage the leaves with tea from other destinations and re-export 17% of it to European countries including Germany, Spain, the Netherlands and France. EATTA will need to be more aggressive in reaching out to those potential markets for enhanced direct trading arrangements. Tea exports earned Kenya US$1.23 billion last year. Earnings will probably be unscathed by the pound’s depreciation as the commodity has been traded in dollars since the 1990s, when the weekly sale was moved to Mombasa from London.
[Bloomberg 12/07/16]
Morocco Abu Dhabi Group Invests In Fruit Industry Elite Agro, an Abu Dhabi agriculture group, has set its sights on becoming a major player in the Moroccan fruit industry by investing in 1,500 ha of fruit and berry products within the next 5 years. Based in Rabat, the Moroccan division has been contracting about 108 ha near Kenitra and 170 ha of pomegranates are planned in Beni Mellal, 243 ha of apples and pears in Sefrou, near Meknes, and another 91 ha in Ain Allah near Fez. It is also looking into other opportunities to invest in Africa, like Mauritania.
[Fresh Plaza 11/07/16]
Threat For Moroccan Tomatoes Within EU Faced with increased threats from Spanish lobbying against Moroccan tomatoes, APEFEL [Association of Moroccan Fruit and Vegetable Producers and Exporters] has turned to the Moroccan government for support. They have asked the government to take necessary measures in case the European Parliament decides to penalise Moroccan exports. Imports from countries such as Morocco only represent 13% of the EU interior market, and Moroccan exports should have no effect on the commercial situation of tomatoes in the EU. An argument is that from 1st October-30th May [period open to Moroccan quotas] European tomato prices are at their highest. During the summer period, when Morocco is practically absent from the European market, the EU countries are subject to laws of supply and demand.
[Fresh Plaza 21/07/16]
26
COMMODITY NEWS
FRUIT, VEGETABLES & HORTICULTURE South Africa Soft Citrus Volumes Up Estimates at the beginning of the South African citrus season have changed with the latest prediction for soft citrus increasing by 0.2 million cartons, while the navel estimate has fallen by 2.6 million according to the Citrus Grower’s Association. The increase in the soft citrus estimate is on the back of vibrant markets which saw the satsuma volumes beat the estimate by 100,000 cartons and a bigger increase over estimate expected for clementines - the packed figure of 3 million cartons already exceeds the estimated 2.722 million cartons.
[Fresh Plaza 28/06/16]
Fruit & Wine Exports On The Rise South Africa has seen fruit and wine exports rise this year. For example this year the export estimate for apples is approximately 33 million equivalent cartons a 25% increase on last year. Most of these exports come from the Western Cape. Nationally, nectarine exports are expected to increase by 31% this season, peach exports by 23% and plum exports by 9% compared to last season. The Western Cape makes up the bulk of South Africa’s total fruit exports in these categories and as such has a goal to dramatically increase the value addition of all exports.
[BBQ 19/07/16]
Fruit Growers Set Sights On Italy South Africa’s R30-billion fruit industry is exploring new markets for expansion; Italy in particular has been identified as a good prospect. To promote trade and investment between the fresh fruit sectors of Italy and South Africa, Fruit SA, an industry body representing local growers, and the Associazione Italiana Commercio Estero [AICE] have entered into a Memorandum of Understanding [MoU]. This forms part of the local fruit industry’s growth strategy to expand its footprint and explore new markets while retaining and optimising current ones. AICE represents Italian companies that are predominately committed to commercial activities abroad. South Africa is currently approaching new markets such as Japan, China, Indonesia and India.
[Business Day Live 15/07/16]
27
South Africa
.
Sundays River Citrus Company New Packhouse The Sundays River Citrus Company [SRCC] has completed construction on a new citrus packhouse in Kirkwood, with the capability to pack 2 million cartons of citrus fruit per month. SRCC is currently the largest grower, packer and exporter of South African Citrus Fruit and its new packhouse, which is fitted with the latest packing machinery and equipment, will create a huge economic boost for the region. SRCC currently exports 21 million cartons annually and is aiming to push production to an estimated 30 million export cartons in the next few years. SRCC also purchased the Addo Cold Store which increases its logistics capability.
[SRCC 04/07/16]
GOGO Citrus Exporter Opens New Packhouse The GOGO group have officially opened their new packhouse in Groblersdal which offers a capacity of 150,000 to 200,000 cartons of citrus per week. The facility will be the most modern in the country. Two years ago, a highly efficient coldstore was brought into operation, enabling the group to move the citrus from where it is packed directly to the port without interrupting the coldchain. The GOGO group consists of growers El Sundew, Tian Kruger Boerdery, JFK Botha, Neels Kok and J.J. Gouws who this year together will export about 3 million cartons. Not only to Europe but also to the Middle East, the Far East and Canada.
[Fresh Plaza 29/06/16]
Famous Brands To Capitalise On Tomato Paste Shortage Famous Brands plans to capitalise on the tomato paste shortage in South Africa through its acquisition of a tomato paste manufacturing plant, Cape Concentrate, in the Coega precinct, in the Eastern Cape, for an undisclosed amount. The local industry is unable to supply growing demand for the product with some 30,000-35,000T of tomato paste imported by South Africa annually to meet the shortfall. Famous Brands currently imports 1,500-2,000 T/yr of tomato paste.
[Engineering News 04/07/16]
28
COMMODITY NEWS
FRUIT, VEGETABLES & HORTICULTURE Tanzania New Airport Cold Storage To Boost Fresh Exports Perishable exports from Julius Nyerere International Airport [JNIA] in Dar es Salaam are set to receive a boost as cold storage facilities have been updated. The facilities under Swissport Tanzania were inaugurated on 13th July after undergoing expansion and modification to allow scanning/screening directly into the acceptance cold room. In 2015 a total of 44.79 T of vegetables, 589.13 T of flowers, 1,331 T of meat and 67 T of fish were exported via JNIA.
[Daily News 14/07/16]
Uganda Russia To Ban Uganda Imports The Russian Federal Service for Veterinary and Phytosanitary Surveillance, Rosselkhoznadzor, has banned imports of fruit, vegetables and flowers from Uganda since 7th July. Rosselkhoznadzor imposes temporary restrictions on export of products with high phytosanitary risk originating in Uganda, as well as those transited through third countries. The measure is aimed at preventing import of agricultural goods which come under the retaliatory economic measures imposed by the Russian Federation. [TAAS 06/07/16]
Djibouti To Import Fruit Products Djibouti will pay Uganda US$20 million for the exportation of fruit products: mangoes, pineapples, pawpaws and bananas. Uganda exports horticultural products to Djibouti under the COMESA agreement and this new venture opens up more space for Ugandaâ&#x20AC;&#x2122;s exports. In May, the 2-countries signed a bilateral trade and investment agreement. Furthermore the Federation of Associations of Uganda Exports [FAUEX] has requested that Djibouti grant Ugandan exports free clearance under the COMESA trading pact as well as a permanent warehouse from where the goods will be traded. FAUEX is a private sector umbrella body of exporter enterprises, exporters associations and farmer and producer groups that seeks to build the capacity of all players in Ugandaâ&#x20AC;&#x2122;s export value chain for competitiveness in the market.
[Footprint To Africa 08/07/16]
29
COMMODITY NEWS
PALM OIL & OILS
Regional 4th Africa Palm Oil Value Chain Summit The 4th Africa Palm Oil Value Chain will be held 1-2nd September in Abidjan, Cote d’Ivoire. The platform will unveil the latest developments in the industry and the opportunities in its downstream markets. It will also highlight the measures being put in place to help smallholders improve competitiveness whilst balancing growth. Palm oil’s popularity has skyrocketed in recent years, as its high yield makes it the cheapest and most efficient source of vegetable oil. Demand has steadily increased since the 1970s, and today the sector is already worth US$50 billion a year, and projected to rise to US$88 billion by 2022. Large scale production of palm oil takes place mostly in Southeast Asia. But with stiffer regulations being enforced to meet sustainability measures, producers have turned their eyes to Africa as the next growth spot. Countries like Nigeria, Ghana and Cote d’Ivoire are the current leaders in African oil palm production, but as output is just a fraction of that of Asia, the region has tremendous potential for growth.
[Benzinga 12/07/16]
30
COMMODITY NEWS
PALM OIL & OILS Angola Global Solutions Invests US $113 Million To Satisfy Cooking Oil Demand Global Solutions is to inject US$113 million in the construction of an industrial complex in Angola which will be dedicated to the production of cooking oil and soap made from oil-production by-products. The infrastructure will be able to produce 100,000 litres of oil and 100 tons of soap per day. Around 220 million litres of oil will be produced annually to satisfy about half of the country’s demand in cooking oil, which is around 450 million litres. Inputs will be needed by the plant over the first 3-years and will be imported from Malaysia, Indonesia, China and Brazil before being substituted by locally produced soya and sunflower grains. The plant is expected to start operating in August 2017.
[Ecofin 20/0/16]
Rwanda Standards Board Prepares For Essential Oils Export Essential oils have been identified as having potential to boost Rwanda’s exports due to the high demand on the global market and the good soils and weather conditions at home that favour production of plants such as Geranium, Eucalyptus, Pyrethrum and Patchouli from which essential oils are extracted. The oils are then used to manufacture perfumes and pharmaceutical products. As a result of this support, the Rwanda Standards Board [RSB] has added 25 parameters to its testing scope, reduced testing costs from US$500 to US$250 and also reduced testing time from 60 to only 25 days. Equipment has been acquired with funding from TradeMark East Africa [TMEA].
[New Times 08/07/16]
Senegal Senegal Invites Indonesia To Develop Palm Oil Refinery Senegal has invited Indonesia to develop palm oil refineries in the country. Senegal’s demand on palm oil stands at 150 million T/yr, which a portion of the total volume is imported from Indonesia. The invitation may also open an opportunity for Indonesia to make investments in Senegal in agriculture. In addition to palm oil and its derivative products, Indonesia’s exports to Senegal include textiles, furniture, detergents, food and beverages. Meanwhile, Indonesia’s imports from Senegal include commodities such as peanut, cashew, cotton and frozen fish. The government is also developing an industrial zone in Djamniadio, located 40km from Dakar, where Indonesia can utilize facility and establish an industry hub.
[Tempo 27/06/16]
31
COMMODITY NEWS
SUGAR
Ethiopia Importation Of Sugar Continues The Ethiopian Sugar Corporation is importing 140,000 MT of sugar at a cost of US$71 million from India, to be transported in 3-rounds of shipments over 4-months. The purchase has come after the closure of all the sugar factories in the country, following the start of the rainy season. The import represents the latest dent following the Corporations failure to keep promises to meet domestic sugar demand through local production - only 44% of the annual production target of 535,693 MT has been achieved.
[Addis Fortune 05/07/16]
32
COMMODITY NEWS
SUGAR Kenya
Kenya To Relax The Rules On Importation Of Sugar Kenya is seeking to relax the rules on importation of sugar to avert a looming shortage fuelled by the underperformance of local millers. The regulator, the Agriculture, Fisheries and Food Authority [AFFA], is evaluating the applications of new importers and plans to increase the amount of sugar that each company can bring into the country. The import quota is currently between 500 and 1,000 tonnes of brown [table] sugar, which is largely used for domestic consumption; import permits remain active for 45 days. Kenya can import between 12,000-15,000T every month from COMESA and EAC member states as it does not produce enough sugar. Sugar is currently trading at between Ksh100 [US$1] and Ksh125 [US$1.25]/kg. AFFA has recommended a minimum price of Ksh3,550 [$33.5]/T of cane to be paid to the farmers, and has also drafted new rules to discipline millers who flout contractual arrangements with the farmers. Currently, farmers are earning Ksh2,800 [$28]/T of cane delivered. The proposed rules are currently at the Attorney Generalâ&#x20AC;&#x2122;s Office. The new price takes effect this month. Millers are supposed to pay farmers for cane delivered within 30 days. If the new rules are approved, millers will pay interest to farmers for delayed payments. The latest data from AFFA shows that the stocks held by millers had fallen by close to 60% to 4,958 tonnes from a high of 12,000T in January. The highest stock level was 35,000T in March 2014.
Consumption
Production
Sugar Deficit
2015
889,233T
635,674T
253,559T
2014
860,084T
592,668T
267,416T
When the deficit is large AFFA increases the quotas for each importer to stabilise retail prices. Currently AFFA is renewing the licences of existing companies and registering new ones and has already received 28 applications for industrial sugar imports and 26 applications for brown sugar. Kenya has licensed 66 private companies to import table sugar, and 47 companies to import white refined [industrial] sugar. Between January and May this year, Kenya imported a total of 56,000T from Egypt, Madagascar, Mauritius, Zambia and Uganda. Most of the imports came from Egypt [33,100T], Zambia [10,625T] and Uganda [5,271T]. In the same period last year, Kenya imported 99,539T mainly from Madagascar Uganda, Zambia and Egypt. In May, Uganda agreed on quarterly sugar exports of 9,000T to Kenya. The 2-countries also agreed that Kenya would facilitate sugar manufacturers in the utilisation of by-products by reviewing the policy on power purchase agreements for green power. Uganda reportedly produces about 500,000T of sugar, and consumes 300,000T annually. Government data shows that Uganda had a surplus of 36,000T during 2014/2015 financial year. A cross-section of Kenyan millers attributed the shortage of sugar in the country to the unavailability of cane delivered to factories. The Kenya Sugar Board noted deteriorating soil fertility and fragmentation of cultivated land into smallholdings as reducing acreage under cane cultivation. Delays in payment have also led to farmers abandoning millers with whom they have contractual arrangements in favour of those who guarantee prompt pay for cane delivered. Kenyaâ&#x20AC;&#x2122;s cost of producing sugar has also come under scrutiny, with cost per tonne estimated at US$1,250, the highest in the region and more than double the global average of US$500/T. [Geeska 09/07/16]
33
Mauritius Sugar Revenue To Jump 25% Mauritius expects sugar revenue to climb by 25% this year, driven by higher prices and increased output. According to the islandâ&#x20AC;&#x2122;s Sugar Syndicate revenue is expected to rise to 10 billion Mauritius rupees [US$283.3 million] this year from 8 billion rupees in 2015. It is estimated the price per tonne of sugar will rise from 13,166 rupees in 2015 to around 15,000 rupees this year. Sugar output should reach 400,000 T, up from 366,000 T a year earlier. The biggest challenge for Mauritius is the impending abolishment of European Union sugar quotas in 2017. African, Caribbean and Pacific [ACP] producers have benefited from preferential access to protected EU markets in recent years but risk losing market share in the EU after production quotas end in October 2017.
[Reuters 08/07/16]
Nigeria NSDC Identifies 10 Sites For Sugar Factories The National Sugar Development Council [NSDC] has identified 10 sites for the development of sugar factories across Nigeria. Already seven of the identified sites had already attracted investors in the sugar industry. Investors for the remaining 3-sites are to be sourced in order to develop them and provide enough sugar for domestic consumption and export. The Nigerian Investment Promotion Commission [NIPC] will partner with the council to attract investors.
[Daily Trust 04/07/16]
Rwanda Government To Set Up Mega Sugar Factory Prime Minister Anastase Murekezi announced that government will establish a sugar factory in Kirehe, Eastern Province, which will produce 100,000 tonnes of sugar every year. That is over 10-times the capacity of the Kabuye sugar plant. Factories will require cultivation of sugar cane on about 10,000 hectares to supply it. An investor from Mauritius will be involve in the project. The move comes a few months after the Kabuye sugar plant appealed in March for more land of about 7,000 hectare to grow sugar cane to be able to double its production capacity by 2018. The aim is to support the country in its effort of reducing imported sugar. The plant produces 20% of the sugar needed in the country. According to Rwanda Development Board 70% of Rwandaâ&#x20AC;&#x2122;s sugar is still imported. This supply mismatch is projected to widen to 150,000 T of sugar annually by 2020.
[Rwanda Focus 29/06/17]
34
COMMODITY NEWS
SUGAR Tanzania
Sugar Act For Review To Boost Production The government is to review the Sugar Act of 2001 and its regulations to create ample room for control and improvement of services offered in the sector. The move is aimed at ensuring that the sugar sector is well managed while proper control measures are in place for improved productivity. The government will evaluate the actual needs of the sector particularly as it had imported 63,000T of sugar and the shortage persisted. In the next 5-years, the government aims at increasing sugar production to 459,503T using a new approach and strategies that will guarantee increased production and productivity in the sector. Measures include setting up 3-middlescale sugar production factories in Kilosa, Mvomero and Kilombero districts and 4-major ones at Bagamoyo, Rufiji, Kigoma and Kidunda. To ensure increased productivity, the government will press for reliable and timely availability of agricultural inputs to small-scale sugarcane farmers, improved irrigation infrastructure and proper running and management of primary cooperatives societies for sugarcane farmers.
[Daily News 01/07/16]
Outgrowers To Benefit From 3 New Mini-Sugar Plants The Sugar Board of Tanzania [SBT] is planning to build 3-mini-sugar plants - with active involvement of local governments in Morogoro Region - within the next 5-years.The plants would be built in Kilosa, Kilombero and Mvomero districts, according to a Sugar Industry Development Plan. The plants will help in utilising the surplus canes that remain uncrushed in each season. SBT will have to carry out the feasibility studies and solicit funds from local and foreign investors. It will also develop bankable proposals to donors and international banks for realisation of the projects.
[Citizen 14/07/16]
Mikumi Sugar factory To Be Constructed 2017 A local investor, Geoman Cane Estate Limited, in collaboration of out-growers plans to construct a factory at Mikumi next year. The facility is to have a capacity of producing 4,000T of sugar a year. A grant of Sh628.5 million has been provided from Southern Agricultural Growth Corridor of Tanzania [Sagcot] and Geoman has raised a working capital of Sh8 billion to kickoff the factory construction process. [Citizen 14/07/16]
35
Zambia Zambia Sugar Commissions US$80 Million Expansion Project Zambiaâ&#x20AC;&#x2122;s largest sugar producer, Zambia Sugar, commissioned its US$80 million Product Alignment and Refinery [PAAR] project at its Mazabuka-based Nakambala factory on 6th July on time and within budget. The project scope included the construction of a modern, high-specification refinery and a range of smaller factory improvements. As a result, Nakambala would more than double its yearly refined sugar production capacity to around 100,000T and increase yearly sugar production capacity from 420,000T to 450,000T.
[Engineering News 06/07/16]
Refined Sugar Production Capacity Doubles In 2016 The President of Zambia has inaugurated a new fully-functional sugar plant that more than doubles the countryâ&#x20AC;&#x2122;s sugar production capacity to 450,000 MT. The plant also has a refinery which aims to increase refined sugar production capacity to 100,000 MT p.a. The factory, located in Mazabuka Southern Province, was built by Zambia Sugar Plc at a total investment of US$80 million. It is part of the Product Alignment and Refinery Project [PAAR] launched by President Lungu in 2015 to expand the sugar production capacity of Zambia. Zambia Sugar Plc financed the project with US$20 million while Citibank and the Zambia National Commercial Bank lent the remaining US$60 million. Domestic and foreign sugar demand from Southern Africa has been increasing in Zambia in the last 2-years.
[Zambia Invest 14/07/16]
Zimbabwe Raw Sugar Producer Price Up 2.6% Sugarcane farmers are earning US$550/T of raw sugar this marketing season, up from US$536/T last year. Commercial Sugarcane Producers Association of Zimbabwe [CSPAZ] noted the price rise was due to increased consumption of locally produced sugar and growth in demand of the product on the export markets. CSPAZ also said the move by the Government to limit the importation of some locally available products was commendable.
[Herald 20/07/16]
36
COMMODITY NEWS
TEA Kenya
Tea Prices Fall To 10 Month Low Tea prices have dropped to a 10-month low, compounding troubles in the sector currently hurting from industrial action. Data from the Kenya National Bureau of Statistics [KNBS] shows that tea auction prices dipped to an average Sh213 per kilo in April a 37% drop from the Sh343 a kilo was fetching in August last year. Exports earned Sh123 billion in 2015, racing ahead of horticulture which brought in Sh100 billion. The quantity of processed tea dropped from 45,330 MT in March 2016 to 37,571 MT in April 2016. The price of the processed tea decreased from Sh233.60 to Sh213.89 per kilo over the same period.
[Standard Digital 10/07/16]
Sombogo Tea Factory Kisii county government has paid Sh30 million for the construction of Sombogo tea factory in a bid to boost tea production and farmers earnings. Partnering with the Kenya Tea Development Agency [KTDA] the factory will be affiliated to Tombe tea factory.
[Hivisasa 07/07/16]
Growers Hampered By High Labour Costs Adding 9% Kenyan tea farming is being weighed down by rising labour costs that could discourage investments and hurt the economy according to the Kenya Tea Growers Association [KTGA]. Labour costs, which represent half of the cost of production for its members, were set to rise in line with a labour court ruling earlier this month, increasing production costs by another 9% amid a decline in tea prices. The government is eliminating and cutting numerous taxes and levies on the industry to help Kenyan tea become more competitive in global markets.
[Reuters 29/06/16]
Zambia ZAFFICO to run Kawambwa Tea President Edgar Lungu has signed an acquisition order to repossess Kawambwa Tea Company so that the government can recapitalise the company. The business will be run by the Zambia Forestry and Forest Industries Corporation [ZAFFICO].
[ZNBC 01/07/16]
37
COMMODITY NEWS
TIMBER
Regional Brexit Likely To Slow Tropical Imports In The Short Term From the perspective of the tropical wood sector, Brexit will have significant implications. The UK is now by far the largest importer of tropical timber in the EU. If all timber-based products are included [primary raw materials, secondary processed products and tertiary products like furniture], in 2015 the UK accounted for around 25% of the total value imported into the EU from tropical countries. This compares to 15% imported into France, the second largest EU market for tropical timber. UK import value of tropical timber products increased by 32% from €720 million in 2011 to €960 million in 2015. This is in contrast to other leading EU markets for which, during the same period, tropical timber imports were either flat [Belgium] or declining [all others]. The expected economic slowdown in the UK on the back of the uncertainty after the referendum result is therefore likely to have a disproportionately large impact on the EU’s imports of timber products from tropical countries. Longer term, the prospects for tropical timber products in the UK and the EU will be partly dependent on the speed of underlying economic adjustment and partly on the terms of trade agreed.
[ITTO 16-30/06/16]
38
COMMODITY NEWS
TIMBER
Central/West Africa B2B Timber Trade Portal Now Online Following a recently concluded ITTO project sees the launch of a timber trade portal, a tool for business to business contacts in Côte d’Ivoire, Cameroon, Gabon and Republic of Congo. The directory, with contact details and descriptions of product range can be accessed at: africantimbercompaniesdirectory.com
[ITTO 16-30/06/16]
Convergence Of Factors Drives Sapele And Sipo Prices Lower An unexpected ‘wobble’ in the market has resulted in prices for sapele and sipo sawnwood dipping sharply. The volatility in prices for these two species is the result of a slowdown in purchases for China coinciding with the seasonal downturn in the traditional European markets as the summer vacation period begins. Another factor for the price weakness is the higher level of sapele and sipo sawnwood production especially in Cameroon, Congo Brazzaville and Central African Republic. Mills in the region increased output to meet growing demand in Europe but now, due to the summer slowdown, production is well above consumption. Prices for a few other species have drifted down mirroring the summer low demand in EU member states. The downward trend in prices is most apparent for padouk but in this case it is because of slow demand in India. Some log prices have also followed the downward trend for sawnwood but to a lesser degree and but this is tending to affect only sapele, sipo and iroko. On the other hand prices for okan LM grade logs gained slightly on demand from the Netherlands. [ITTO 16-30/06/16]
Chinese Importers Showing Interest In Okoume Veneers Producers comment that, despite the usual European vacation slowdown, other markets continue to be firm except the Chinese market for okoume logs. This, say producers, appears to be because of a concerted effort by buyers to drive down prices. The weaker okoume log prices can also be partly due to Chinese importers showing more interest in okoume veneers from Gabon and Congo Brazzaville rather than logs. This trend will likely accelerate over the coming years. For timbers other than those where some weakness in prices has been reported, overall demand is firm and production is closely balanced. Over the next few weeks producers will learn whether prices will continue to hold steady as buyers begin to assess purchases for September and shipments for Q4.
[ITTO 16-30/06/16]
Ghana, Cameroon And Gabon Become PEFC Members This month the Programme for the Endorsement of Forest Certification [PEFC] welcomed Ghana as a National member the third in Africa, alongside Cameroon and Gabon. Joining the PEFC Alliance is a vital step towards gaining international recognition for the Ghanaian National Forest Certification System. When Ghana’s scheme gains PEFC endorsement the forestry and timber sectors will be able to demonstrate their sustainable forest management practices and confidently promote exports.
FACTBOX: Programme for the Endorsement of Forest Certification [PEFC] -- World’s leading forest certification system -- Devoted to ensuring that forests are managed according to environmental, social and economic criteria -- Recognised certification systems in over 30 countries -- Accounts for over 275 million hectares of certified forests -- Companies: 17,605
39
East Africa Countries Agree Measures For Implementation Of Zanzibar Declaration At the 4th Annual East Africa Timber Trade Stakeholdersâ&#x20AC;&#x2122; Forum East African member states agreed to establish a Secretariat to oversee the effective implementation of the Zanzibar Declaration and Bi-Lateral Timber Trade Agreements. Zambia also requesting to become a signatory. Hosted by the Kenya Forest Service [KFS] and WWF Kenya the agreement solidifies commitments made on Illegal Trade in Timber and Forest Products that was signed in September 2015 at the XIV World Forestry Congress in Durban, South Africa. Kenya, Uganda, Mozambique, Madagascar, Tanzania and Zanzibar under the umbrella of Southern African Development Community [SADC} and the East African Community [EAC] agreed to: -- Creation of a Secretariat to implement the Declaration more effectively and to manage day-to-day activities. -- Establishment of a Steering Committee [SC] composed of high-level officials to ensure political and government buy-in to implement Declaration actions. The SC will include specialized sub-committees comprised of members with technical knowledge [e.g. forestry, law enforcement, customs] to facilitate implementation of a Regional Action Plan. KFS has agreed to host the Secretariat for 2016-2017, with TRAFFIC and WWF providing financial and technical support to help finalize the Regional Action Plan.
[Traffic 04/07/16]
RESOURCES To view the full declaration go to http://www.trafficj.org/publication/15_Zanzibar-Declaration.pdf
40
COMMODITY NEWS
TIMBER Angola
Angola Will No Longer Need To Import Plywood Angola will no longer need to import plywood for the construction sector due to investments made in a wood product factory in Cachiuno, Huambo province. The Almeidas Guotai factory is a partnership between Angolan and Chinese investors. It meets demand for plywood in the province, particularly for the construction industry. The production line has a capacity of 3,000 plywood sheets per day and produces 1,500, which is consider enough to meet local market demand. The provinces of Huambo and Luanda are the main markets for the factoryâ&#x20AC;&#x2122;s products, but the plywood sheets made from eucalyptus from Cachiungo municipality are also sold in the provinces of Bie, Benguela and Kwando Kubango, though in lower quantities.
[Macauhub/AO 28/06/16]
Cameroon UK Sanctions Cameroon Timber Traders For EU Violations The UK Authorities charged with enforcing the EU timber regulations [EUTR], have taken action against 14 UK importers sourcing timber from Cameroon linked to illegal logging. This news follows comparable action by the Netherlands in early March. Cameroonâ&#x20AC;&#x2122;s authorities must examine this new set of sanctions and start investigating the companies in question as a first step to tackle the illegality and corruption in the timber sector. Furthermore, Cameroon must also ensure that the Voluntary Partnership Agreement [VPA] co-signed with the EU is fully implemented to stop illegal logging and strengthen forest governance in Cameroon.
[Greeenpeace 30/06/16]
Gabon Still No News On Kiln Drying Regulations Still there is no firm news from Gabon on the various government initiatives on kiln drying and the proposed marketing organisation. The domestic industry has submitted comments and suggestions to the government and hopes kiln drying of export sawnwood which will be used for sea defenses and other applications in water will be excluded.
[ITTO 16-30/06/16]
41
Ghana Q1 Export Contract Volumes Drop 28% The total volume of Timber Industry Development Division [TIDD] approved export contacts in Q1 2016 was 86,335 cu.m, a drop of 28% when compared to approvals in Q4 2015. There was a steep fall in approvals for export of primary and secondary products, with only the small volume of tertiary product exports registering growth. Exports of primary products in Q1 fell 33% year on year due mainly to a decline in shipments of teak logs/billets [-85%]. Secondary product exports also fell [-30%] to a low of around 74,000 cu.m; while tertiary product exports increased of 67% to 3,428 cu.m. In Q1 sawnwood accounted for 64% [55,409 cu.m] of the volume of all approved export contracts while plywood accounted for a further 12% [10,292 cu.m]. Regional West African markets continued to be the major market for plywood, while for tertiary products, such as sliced veneer and kiln dried sawnwood, the main markets were in Europe. Species such as rosewood [air-dried sawnwood] and high lumber density species such as apa, ekki and denya were mainly for the Chinese market. Mahogany and cedrella sawnwood along with rotary veneer found a ready market in the US. Middle East and Egyptian markets emerged as a major destination for backing grade veneer, with India the main market for teak sawnwood and gmelina logs.
[ITTO 16-30/06/16]
42
COMMODITY NEWS
TIMBER Kenya
Kenya Hosts Timber Trade Forum Kenya has hosted the 4th Annual East Africa Timber Trade Stakeholders’ Forum, which focuses on moving from words to actions: ‘Implementing the Zanzibar Declaration and bi-annual agreements’. The meeting, hosted by the Kenya Forest Service [KFS] and WWF Kenya, aims to build on the commitments made in the Zanzibar Declaration on Illegal Trade in Timber and Forest Products that was finalized and signed in September last year at the XIV World Forestry Congress in Durban, South Africa. The Declaration was drawn up by the Forest Authorities of Kenya, Uganda, Mozambique, Madagascar, Tanzania mainland and Zanzibar, and the regional bodies of the Southern African Development Community [SADC] and the East African Community [EAC]. The meeting fleshed out high level commitments including drawing up a unifying strategy among the signatories to curb illegal trade with actions such as reviewing and amending national legislation to tackle illegal and to implement action plans on existing agreements. Afterwards a side meeting for regional Customs and Forestry officials took place to develop a regional Customs strategy. The Forum is being co-ordinated by WWF and TRAFFIC, the wildlife trade-monitoring network. This year’s Forum is financially supported by the UK Government’s DFID and the Swedish Government’s SIDA.
[Traffic 27/06/16]
Zambia Suspension Of Forest Concession Licences Lifted The Zambian Government has with immediate effect lifted the suspension of the issuance and renewal of Forest Concession Licences and warned that those involved in the illegal cutting, transportation, trading and export of timber will be prosecuted. The lifting of the suspension is as a result of new regulations, which are in line with the new Forests Act. Meanwhile the Lands, Natural Resources and Environmental Protection Ministry raised US$2 million from the sale of confiscated mukula logs.
[Daily Mail 16/07/16]
43
COMMODITY NEWS
TOBACCO Malawi
Buyers Urged To Honour Contracts With Growers The Tobacco Association of Malawi [TAMA] has asked the tobacco buyers to honour their agreements with farmers. The organisation made the plea after growers complained that they are being forced to sell their tobacco on auction even though their contracts are yet to finish. Meanwhile, there is high rejection rate pegging at 99% on the tobacco market which is a heavy blow to most farmers. However by July 5th tobacco sales this season had raked in US$122.5 million.
[Malawi 24 09/07/16]
Zambia Farmers Call For Tobacco VAT Exemption The Zambia National Farmersâ&#x20AC;&#x2122; Union [ZNFU] has pledged to continue engaging Government to exempt leaf tobacco from Value Added Tax [VAT] to increase investment in the sub-sector and bring Zambia in line with the prevailing tax regimes on the crop in Zimbabwe and Malawi. The current VAT regime is affecting the competitiveness of tobacco in comparison with regional neighbours and in some cases, non-payments for tobacco supplied during the last marketing season. At the recent 52nd Tobacco Association of Zambia [TAZ] annual congress it was noted that despite difficult circumstances, leaf tobacco exports have increased contribution to the national treasury from US$49 million in 2007 to US$100 million in 2014. With appropriate tax policy by Government, the production of leaf tobacco in Zambia can be doubled with greater impact on the economy through job creation and foreign exchange earnings for the Treasury.
[Daily Mail 28/06/16]
Savanna Tobacco To Raise US$10 Million For Expansion Savanna Tobaccoâ&#x20AC;&#x2122;s major shareholder Adam Molai is seeking to raise US$10 million in the next 12 months to finance its various investment projects across the SADC region as the company intensifies expansion programme. The appointment of a new Regional CEO 8-months ago had seen the company open 3-new markets in the region while the group is currently in the process of acquiring another factory to be completed in the next 3-months.
[Bulawayo 17/07/16]
44
COMMODITY NEWS
TOBACCO
Zimbabwe Tobacco Crop Surpasses Target Zimbabweâ&#x20AC;&#x2122;s 2016 tobacco sales have surpassed the 160 million kg target set by the industryâ&#x20AC;&#x2122;s regulator, with 167 million kg having been sold by day 69 of the tobacco marketing season. In 2015 the sector produced 198 million kg of tobacco earning the country US$584 million. Last year tobacco sales closed on July 15, but this year the auction floors opened late and expectations are that sales will continue until the end of July. Erratic rains and long dry spells forced farmers to plant late hence the late start of the marketing season. The decline in tobacco production was also attributed to the low prices offered by buyers last season, such that the area under crop for the 2016/2016 season declined to 89 500 ha from 93 419 ha during the previous season. Statistics from the Tobacco Industry and Marketing Board show that from the ongoing tobacco sales, the country has earned US$400 million compared to US$469 million earned last year from the 158 million kg that had been sold during the same period. Prices at the auction floors have improved with a daily average price of US$3/kg for contract sales and US$2.59 for auction sales having been recorded. The highest price remains at US$6.25/kg for contract sales and US$4.99 for auction sales.
45
As farmers begin preparations for the 2016/2017 crop, statistics from the Tobacco Research Board show that 221,215g of tobacco seeds have been sold while the Zimbabwe Tobacco Seed Association has sold 92,310g. The tobacco seeds are enough to cover 52,200 ha. Expectations are that with a 75% chance of a La Nina season, between November and December, the 2016/2017 agricultural season would be far much better that the 2015/2016 agricultural year.
[Financial Gazette 14/07/16]
46