Com-Watch - Issue 41 - October 2014 Headlines By Region Western Africa Regional: West Africa To...

COFFEE SHORTAGE LARGEST IN 9-YEARSFull Story On Page 13

AFRICACOM-WATCH

Farmers Growing Cassava For Brewing Rises Five-Fold

ISSUE 41 | OCTOBER 2014

South Africa Lifts Livestock Import Ban

Zimbabwe Tobacco Output Hits 216 Million Kg

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Coffee Shortage Largest In 9-Years

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Farmers Growing Cassava For Brewing Rises Five-Fold

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21

34

South Africa Lifts Livestock Import Ban

Zimbabwe Tobacco Output Hits 216 Million Kg

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AFRICACOM-WATCH

ISSUE 41 | OCTOBER 2014

Contents03 / Group News

04 / General News

05 / Banana & Plantain

06 / Cashew & Groundnut

07 / Cassava

08 / Cocoa

13 / Coffee

17 / Cotton, Textiles & Leather Goods

19 / Fish

20 / Foodstuffs & Beverages

23 / Palm & Cooking Oil

25 / Rice

26 / Sugar

27 / Tea

29 / Timber

33 / Tobacco

Top Stories

News Headlines By RegionWestern AfricaRegional: West Africa To Produce 1.8 Million Tons Of Cotton In 2014-2015 CampaignCameroon: Grinders Buy 1,946 Tonnes In August / Production Slips 8% In 2013-14 Season / Cameroon Produced 5,446 Tonnes Of Certified Cocoa Last Season / Cocoa Exports Rise To 6,666 Tonnes In August / Cocoa Sales Lag Behind Counterparts / Cocoa Prices Achieve 3-Year High / Cargill Pays CFA 104 Million In Production Bonuses / Improved Maize Seed / Douala Port Log Stockpile To Move In SeptemberCongo: Generous Incentives For Congo InvestorsCote d’Ivoire: Farmers Begin Main Crop Harvesting Early / Ivory Coast To Harvest 1,719,000 Tonnes Of Cocoa / Hershey Expands Ivorian Program / Palmci’s H1 Net Profit Nearly 9% Y-O-Y / DekelOil Palm Oil Production Expected To Generate Rapid GrowthDRC: World Bank US$110 Million Agricultural ProjectGabon: Gabon Millers Holding Back On Investments / EU Plywood Imports From Gabon Are Low But Rising / Okume Import Tariff ReducedGhana: Cocobod Signs US$1.7 Billion Loan For 2014-15 Cocoa Season / US$200 Million Mass Cocoa Spraying / Government Focus On Increasing Investment In Textile Industry / Import Prohibitions By Land Will Lose Ghana US$22.5 Million / FinGAP Grants US$75 Million To Boost Rice Sector / Eastern Region To Get New Sugar Mill / First Half Timber Exports Up 4.5% / Exporters Seek Permission To Conclude Rosewood Export Contracts / GFC Cracks Down On Contractors / Contractors Warned Not To Transport Timber At NightGuinea Bissau: Creates Fund To Support The Cashew IndustryMali: Moulin Moderne du Mali M3 To DiversifyNigeria: Cocoa Crop To Double / Nigerian Textile And Apparel Sector Showing Signs Of Progress / Osun Raises 54,750 Seedlings To Replace Ageing Trees / Government Approves N13 Billion For Rice,Cassava MillsSenegal: Exim Extends US$62.95 Million Rice Credit

Eastern AfricaEthiopia: Horizon Plantations To Spend US$500 Million On Coffee, OrangesKenya: Crossroads Over EPA Trade Talks / Kenyan Coffee Prices Fall / Trade Policy Streamlines Activities, Tools To Aid Textile Sector / To Push US Textile Exports To US$1 Billion / Chinese Jiangsu Lianfa Inks Deal To Build Textile Plant / Mumias Sugar Warns Of Wider Annual Loss / Senate To Host Tea Growers Conference / Mombasa Tea Brokers Begin Real-Time Streaming Of Auction / Revenue From Kenya’s Small-Scale Tea Farmers Falls 24% / MPs Urged To End KTDA Monopoly In Tea Marketing / Traders Say Taxes Curtailing Demand / Tea Factory to Be Set Up in KapsokwonyMalawi: Tobacco Revenue Reaches US$358 Million / Egyptian Investors To Promote TobaccoMozambique: Mozambique Exports US$70 Million In Bananas / Farmers Growing Cassava For Brewing Rises Five-Fold / Ratifying International Treaty To Combat Illegal Fishing / Mozambique and China Sign Agreement On Fishing Port / World Bank Finances Fishing In MozambiqueTanzania: Bumper Coffee Harvest In 2014-15, Tracking New York Market / CPT Introduces Voucher Scheme To Support Small-Scale Coffee GrowersUganda: Uganda Coffee Exports Fall In August / Coffee Exports Falling After Beetle Damage / Coffee Exports Seen Rising 3% In 2014-15 Season / Rains Delaying Main Coffee Harvest by a Month / Government Sets Up Coffee Research Centre / Ugandan Dairy Sector

Southern AfricaSouth Africa: Nestlé To Boost South African Business With US$200 Million Investment / Cotton Textile Mediation Yields a Recommended Settlement / South Africa Lifts Livestock Import BanZambia: President Wants ZAMACE Activated / Zambia Plans A Timber Moratorium / Tobacco Farmers Form UnionZimbabwe: Government Tightens Controls On GMO Imports / Tobacco Output Hits 216 Million Kg / Belgium Largest Tobacco Export Market For Zimbabwe

But Rising /

ocoa SprayingLose Ghana Sugar Mill / First ts / GFC Cracks

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CMA CGM Keynote Speaker At Cool Logistics Global 2014Alexis Michel, Senior Vice President [SVP] Container Logistics and Reefer for CMA CGM is to give a keynote speech at the 6th Cool Logistics Global conference. The 2014 conference takes place aboard the iconic SS Rotterdam on 30 Sept - 2 Oct, hosted by Port of Rotterdam. The event is themed “Tackling trade risks: Perishables, protectionism and profitability.” Covering 3-days, it brings together shippers, carriers, 3PLs, ports and terminals, technology providers and other key stakeholders to network in advance of annual contract negotiations.www.coollogisticsglobal.com

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COMMODITY NEWSGROUP NEWS

Kenya Crossroads Over EPA Trade TalksUnethical trading practices by fresh produce exporting companies and disagreements among East African States over the Economic Partnership Agreement’s [EPA] is likely to cost Kenya the lucrative European Union [EU] market.

Two meetings held in Nairobi and Kigali, Rwanda in March and July this year have amounted to nothing as stakeholders continue to disagree. For the last 6-months, businesses from the 5-EAC countries have not been able to agree on export taxes, governance, export and domestic subsidies. Kenya is negotiating the deal together with Tanzania, Uganda, Rwanda and Burundi. Kenya is supposed to sign the EPAs by October 1, failure to which it will have its commodities mainly the fresh produce slapped with new taxes.

In the event that this does not happen, the EAC would meet and agree on strategies in the interim with a view to cushioning businesses. Kenya may even sign the agreement alone as part of protecting its industry against new taxes before the set deadline elapses. Analysts say it is particularly essential for Kenya - the only country in the EAC trading block classified as a developing country to sign the deal. The rest of EAC Partner States are categorised as Least Developed Countries [LDCs], which puts them in a better trading position compared to Kenya.

Under the EU protocol, LDCs do not have to sign the EPAs since their preferences will continue under the Everything But Arms [EBA] trade arrangement. Further, Kenya is likely suffer more as her partners export little into the EU. That means some of them could very well be dragging their feet on signing on the dotted line as a tactic to increase their exports after Kenya is locked out of the market. Under EBA, poor nations are granted duty free access to the EU for all products, except arms and ammunition and 41 tariff lines concerning rice and sugar, on which duty free quotas are established until full liberalisation. But, as a developing country, failure to sign the pact will put Kenya in a difficult position as accessing the European market is vital.

[Standard Digitial 24/08/14]

Zambia President Wants ZAMACE ActivatedZAMACE [Zambia Agricultural Commodities Exchange] is a centralized, transparent market place for agricultural raw materials launched in 2007. Composed of 15 members, it allows the trade in cereals, soy, sunflower seeds and fertilizer.

After a break of 3-years, the Zambian President has ordered a relaunch outlined in the Agricultural Appropriations Act which should be effective by the end of this year. It will allow Zamace Ltd. to restart in April 2015. Zambia produced a record 3.4 million MT of corn this year - a 42% surplus which goes to waste because of inadequate storage facilities and needs to be managed properly through the exchange.

[Mynextphone 19/09/14]

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COMMODITY NEWSGENERAL NEWS

Mozambique Mozambique Exports US$70 Million In BananasAccording to the Confederation of Economic Associations [CTA] the exports of bananas produced in Mozambique brings in over US$70 million per year. Alongside efforts to produce quality bananas, prices in South Africa had increased, which has benefitted the Mozambican economy. Banana companies currently export an average of 80 refrigerated trucks per week to the South African market, or more than 2,000 tons of bananas per week or 100,000 tons a year. The United Nations Food and Agriculture Organisation [FAO] puts Mozambique in third place in the list of top banana producers in Africa, second only to the Ivory Coast and Cameroon.

[Macauhub/MZ 15/09/14]

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COMMODITY NEWSBANANA & PLANTAIN

Cote d’IvoireEstablishment Of A Shea Butter Umbrella Organisation Stakeholders in the Ivorian Shea industry want to develop an umbrella organisation to plan projects for the growth of the sector. The goal, which has the support of the Direction des Organisations Professionnelles Agricoles [DOPA], Chamber of Agriculture and the Fonds Interprofessionnel pour la Recherche et le Conseil Agricole [FIRCA], is to organize the sector to focus on pricing and promotion. Côte d’Ivoire is the 5th global producer of shea with annual production at 40,000 tons.

[Ecofin 25/09/14]

Guinea BissauCreates Fund To Support The Cashew IndustryThe agreement governing access to a fund to finance projects for processing cashew nuts was signed 23rd September by the Government of Guinea-Bissau and the Guinean Foundation for Enterprise and Industrial Development [Fundei]. The fund, with an initial allocation of €1.5 million, is intended to stop cashew nuts, which are the country’s main agricultural product, being exported raw to India and to add value to the product by processing it in Guinea-Bissau.

The initial funding will come from the Fund for the Promotion of Small and Medium Manufacturing Industry, a tax levied by the Chamber of Commerce on raw cashew nut transactions, but which will be appropriated by the government. The money will be used primarily to finance private cashew processors, particularly for training and buying equipment, as well as the cashews themselves.

[Macauhub/GW 24/09/14]

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COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

Mozambique Farmers Growing Cassava For Brewing Rises Five-Fold The number of farmers growing cassava specifically to produce beer in Mozambique rose five-fold between 2011 and 2014, up from 2000 to 10,000. Beer maker Cervejas de Moçambique has helped to demonstrate the importance of the agricultural sector for the development of Mozambique, presenting the case of Impala, the first beer in the world based [60%] on cassava.

[Macauhub 02/09/14]

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COMMODITY NEWSCASSAVA

GeneralAfrica’s Growing Hold On Processing/Output The International Cocoa Organization [ICCO] has underlined the growing importance of West Africa on the cocoa trade as it ditched ideas of a world production deficit this season, thanks largely to better-than-expected Ivory Coast output.

The ICCO, while nudging higher by 15,000 tonnes to 108,000 tonnes its estimate for the world production deficit last season, axed a forecast of a shortfall at all in 2013-14, which ends next month, seeing instead a 40,000-tonne surplus. The revision from a previous estimate of a 75,000-tonne deficit, reflected in the main a larger-than-previously-estimated main crop in Ivory Coast as well as in Ghana and a stronger anticipated mid-crop in Ivory Coast.

The weak Harmattan winds during its December-to-March season and the adequate rainfall interspersed with sunshine in April this year, have been conducive conditions for a strong mid-crop. ICCO upgraded by 120,000 tonnes 1.73m tonnes its forecast for output in Ivory Coast to a record high, beating the 1.511m tonnes reached in 2010-11. However the 2013-14figure may overestimate the current harvest due to smuggling from neighbouring countries.

The Ghana estimate was lifted by 70,000 tonnes to 920,000 tonnes, and for Nigeria by 10,000 tonnes to 240,000 tonnes, more than offsetting small downgrades to estimates for crops in Cameroon in Ecuador. The estimate for world production was lifted by 183,000 tonnes to a record 4.345m tonnes, beating the previous high of 4.309m tonnes set 3-seasons ago.

ICCO 2013-14 cocoa estimates - Production: 4.345m tonnes, +183,000 tonnes, [+403,000 tonnes] - Consumption: 4.262m tonnes, 67,000 tonnes, [+151,000 tonnes] - Surplus: 40,000 tonnes, +115,000 tonnes, [+248,000 tonnes] - Stocks-to-use ratio: 38.9%, + 1.6 points, [-0.5 points]

Te forecast for African grindings was upgraded by 54,000 tonnes to 867,000 tonnes aiming to register the highest increase in processing activity of over 9%. Ivory Coast is expected to lead the way, with a jump of 14% in volumes this season to 535,000 tonnes, and further growth expected in 2014-15.

Ranked at #2 this season, Ivory Coast is expected to become the world’s top cocoa processing country next season, with the addition of the newly operating cocoa processing plant of Olam in San Pedro since the second quarter of 2014.

[Agrimoney 28/08/14]

Cargill To Buy ADM’s Chocolate Business For US$440 MillionU.S. company Cargill Inc. has agreed to acquire Archer-Daniels-Midland Co.’s [ADM] chocolate business for US$440 million to increase production in North America. The deal is expected to close in H1 2015 subject to regulatory approvals. ADM said in April that it had abandoned plans to sell its entire cocoa business as prices for the beans improved and would instead try to sell the chocolate operations. Cocoa prices have risen 31% in the last year as demand surpasses supply, increasing costs for chocolate makers. For Cargill, the acquisition broadens Cargill’s chocolate operations in Europe and particularly production in North America. Included in the sale are plants in Pennsylvania, Wisconsin, Ontario, the U.K., Belgium and Germany.

[Bloomberg 02/09/14]

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COMMODITY NEWSCOCOA

CameroonGrinders Buy 1,946 Tonnes In AugustCameroon’s cocoa grinders bought only 1,946 tonnes of cocoa beans in August, the first month of the 2014/2015 season, down from 2,562 tonnes last year according to the National Cocoa and Coffee Board [NCCB]. Only Sic-Cacaos, a subsidiary of Swiss chocolatier Barry Callebaut, bought beans in August. Sic-Cacaos processes raw cocoa beans into cocoa powder, cocoa cake and cocoa liquor. The products are sold in the 6-nation CEMAC bloc, which also includes Central African Republic, Chad, Congo Republic, Equatorial Guinea, and Gabon.

[Reuters 24/09/14]

Production Slips 8% In 2013/14 SeasonCameroon’s 2013/14 cocoa production slipped more than 8% to 209,905 tonnes compared with 228,948 tonnes the previous season. National Cocoa and Coffee Board [NCCB] noted bean exports fell nearly 20% to 158,000 tonnes from 196,788 tonnes in the 2012/13 season. There were 5,828 tonnes of remaining stocks of beans at the end of the season on July 31. The Cocoa and Coffee Inter-professional Board [CCIB] had expected an increase for the 2013/14 season to about 240,000 tonnes, but unfortunately it instead declined blamed on bad weather resulting in the black pod disease.

77% of the exports were shipped by the top 5-exporters - Telcar Cocoa Ltd, Olam Cam, Cameroon Marketing Commodities, Ets Ndongo Essomba and PRODUCAM. Nearly 66% of exports were destined for the Netherlands, followed by Belgium 10.6% and Malaysia 10.4%. A total of 32,804 tonnes of beans were processed domestically, the vast majority by Sic-Cacaos, a subsidiary of Swiss chocolate manufacturing firm Barry Callebaut, and CHOCOCAM, an affiliate of South Africa’s Tiger Brands.

The season was characterised by serious blockages at Douala port which remains one of the main issues requiring a solution heading into the new 2014/15 season. Backlogs caused bean quality, packed into containers for weeks, to deteriorate. Cameroon’s cocoa production hit a record of 240,000 tonnes in the 2010/11 season before dropping to 220,000 tonnes in 2011/12 due to a prolonged dry season and attacks by pests and diseases.

[Reuters 05/09/14]

Cameroon Produced 5,446 Tonnes Of Certified Cocoa Last SeasonCameroon produced 5,446 tonnes of certified cocoa in 2013-2014. This production more than doubled the previous season’s which was only 2,000 tonnes according to figures provided by the Inter-professional Cocoa and Coffee Council [CICC].

The main exporter of this type of cocoa is Telcar Cocoa [3,000 tonnes], a trader of the global firm Cargill, which currently is steering the certified cocoa production promotional campaign. To this end, last September, the exporter paid 500 producers of certified cocoa from the South-West region a bonus of over 104 million FCFA or 50 FCFA/kg of certified product. In order to make the production of this type of cocoa more lucrative on the international market, the CICC plans to launch “a major awareness campaign with the support of international partners and certifying organisations starting in Q4 2014.

[Business in Cameroon 22/09/14]

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COMMODITY NEWSCOCOA

Cocoa Exports Rise To 6,666 Tonnes In AugustAccording to the National Cocoa and Coffee Board [NCCB], Cameroon exported 6,666 tonnes of cocoa beans in August, the first month of the 2014/15 season, up from 6,252 tonnes in the same period the previous season. The amount is also greater than the 5,472 tonnes of beans shipped in July. 10 companies exported beans in August, down from 15 in July. Telcar Cocoa Ltd led the way with 2,408 tonnes, followed by Olam Cam with 1,613 tonnes and Cameroon Marketing Commodities with 803 tonnes. Cameroon’s cocoa season runs from Aug. 1 to July 31, with the main crop harvest period from October to January/February and the light crop harvest from April/May to July. Cameroon produced 209,905 tonnes of cocoa in the recently ended 2014/15 season, down more than 8% from 228,948 tonnes the previous season.

[Reuters 23/09/14]

Cocoa Sales Lag Behind CounterpartsAccording to the Inter-professional Cocoa and Coffee Council [CICC] 95% of cocoa beans are exported at a Grade II quality level. So although the board can be happy about the emergence of certified products and the improvement in the differential at the end of the season, a regression persists due to the small percentage of Grade I rated beans produced. Currently only 0.25% of Cameroon exports are Grade I as opposed to 3.18% in 2011/2012 and 0.35% in 2012/2013. CICC believes the price differential relative to Ghana led to a loss of 30 billion FCFA and around 10 billion with Cote d’Ivoire. Beyond this structural concern difficulties exporting from Douala where there has been an unparalleled amount of congestion for over 9 months has also impacted sales and product quality.


Cocoa Prices Achieve 3-Year HighA report from the National Cocoa and Coffee Board [NCCB] noted cocoa prices witnessed an all-time high in the 2013-2014 farming season. Farmers received on average FCFA 1,275/kg the highest in the last 3-years. Marketable production in the 2013-2014 farming season witnessed a drop of 19,000 MT against the previous season to stand at 209,905 MT with 174,629 kg exported to Holland, Malaysia, Belgium and other countries.

Production is largely by small-holder farmers with local processing manned by few outfits like SIC Cacaos, CHOCOCAM and some common initiative groups. Investing in cocoa production to go even beyond the 2020 mark of 600,000 MT would be good to conquer the ready market of the produce.

According to the International Cocoa Organisation [ICCO] future world demand could hit 4-million MT up from the current 3.8 million MT. Although the gap is some 200,000 MT, bridging it could be an uphill task. This is more so as giant cocoa producing nations like Côte d’Ivoire and Ghana are almost seeing their cocoa production zones exploited beyond any use. This is an opportunity Cameroon and Nigeria, still parading huge potentials capable of producing beyond what they have, can maximize to better their populations and economies. Cameroon has vast and arable fertile land in the 7-cocoa production regions of the country with good climate comprising abundant sunshine and rainfall all favourable for qualitative and quantitative production.

[Cameroon Tribune 08/09/14]

Cargill Pays CFA 104 Million In Production BonusesAhead of the 2014-2015 cocoa season, which was officially launched on September 4, 2014 in Bot Makak, a production basin of the Centre, Telcar Cocoa, a local trader of the Cargill global group, paid out 104 million FCFA in bonuses to 500 Cameroonian certified cocoa farmers [equivalent of FCFA50/kg]. Telcar, the country’s leading cocoa exporter, rewarded for the first time in Cameroon, its “Cargill Cocoa Promise” partners. Namely farmers with the best cultivation practices in terms of post-harvest and environmental awareness in the production of cocoa who were certified during the previous 2012-2013 season. The certification contributes to the overall improvement of the quality of cocoa produced.


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Cote d’IvoireFarmers Begin Main Crop Harvesting EarlyFarmers in some of Ivory Coast’s cocoa-growing regions have begun harvesting beans ahead of the official start of the main crop next month. The world’s top cocoa producer is wrapping up a record 2013/14 harvest with exporters estimating current arrivals at around 1,719,000 tonnes by Sept. 21. But despite expectations of a bumper crop in West Africa and a global supply surplus, prices are continuing to rise largely on fears that a regional outbreak of the Ebola virus could cross the border into Ivory Coast.

[Reuters 23/09/14]

Ivory Coast To Harvest 1,719,000 Tonnes Of CocoaIvory Coast is expecting a record 2013/14 harvest with exporters estimating current arrivals at around 1,719,000 tonnes by end of September. Main crop harvesting has already started and will pick up in the next 2-weeks and will be strong in October due to abundant sunshine. Good growing conditions were reported in the southern regions of Agboville, Divo and Tiassale and in the western region of Gagnoa. However fungal black pod disease is spreading in the southeastern region of Aboisso, where abundant rain has continued.

[APA 22/09/14]

Hershey Expands Ivorian ProgramThe Hershey Company has announced a new 3-year program expanding its cocoa farmer training and community initiatives in Ivory Coast. In partnership with Cargill, Hershey ‘Learn to Grow Ivory Coast’ will encompass 7-farmer cooperatives. Through the program, 10,000 cocoa farmers will be trained in agricultural and social practices that are independently audited and certified against the UTZ Certified standard. By doing so, those farmers will benefit by receiving higher premium payments for their cocoa. It will provide Ivorian farmers with a accelerated market channel for certified cocoa while they improve their farms.

Hershey is expanding its training model from established programs in Ghana and Nigeria. Hershey is committed to buying 100% certified cocoa for all of its products worldwide by 2020. Levels surpassed 18% through 2013 and will increase to between 40% and 50% by 2016. Hershey and Cargill have previously collaborated on CocoaLink, a program that uses mobile technology to connect cocoa farmers in Ghana with information about good farming practices, labor safety and crop marketing.

[Hershey 09/09/14]

GhanaCocobod Signs US$1.7 Billion Loan For 2014-15 Cocoa SeasonGhana’s cocoa regulator signed a US$1.7 billion loan with international banks to finance purchases for the next cocoa season. Ghana is the world’s second biggest producer of cocoa and this year’s facility, signed in Paris, is the largest soft commodity deal in sub-Saharan Africa. The loan was oversubscribed by 15% and Cocobod will receive an additional US$200 million on demand to be drawn in Q1 2015. The government is committed to paying farmers realistic prices to build their confidence in the business and attract young people to the industry. Ghana raised US$1.2 billion in a similar loan last year. It is expected to raise producer prices at which Cocobod buys cocoa from farmers at the onset of the new season in October. Cocobod is hoping to harvest at least 900,000 MT of cocoa in the 2014/15 crop year.

[Reuters 12/09/14]

US$200 Million Mass Cocoa Spraying More than US$200 million has been invested on a mass cocoa spraying exercise in order to increase the production of cocoa for export. As part of the package, 1.6 million bags of inorganic fertilizers and 22,000 liters of organic ones will be distributed to farmers to help raise the yields of the crop.

[GBC 09/09/14]

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COMMODITY NEWSCOCOA

NigeriaCocoa Crop To DoubleAccording to Minister of Agriculture, Akinwunmi Ayo Adesina, Nigeria’s cocoa production is expected to more than double within 3-years after farmers were supplied with hybrid seedlings to boost yields fivefold. It is expected that within a couple of years output will jump to 800,000 MT a year. Nigeria produced 240,000 MT this season.


GeneralDaily 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 Sep 14 2130.88 3235.49 1986.00 3177.50

2 Sep 14 2111.76 3196.59 1970.67 3147.00

3 Sep 14 2105.43 3187.81 1972.67 3136.00

4 Sep 14 2096.50 3172.48 1971.67 3125.33

5 Sep 14 2086.10 3137.46 1960.33 3083.00

8 Sep 14 2068.17 3105.44 1957.00 3057.67

9 Sep 14 2081.48 3118.53 1973.33 3067.00

10 Sep 14 2071.93 3108.64 1966.67 3049.67

11 Sep 14 2058.89 3087.36 1945.67 3023.33

12 Sep 14 2079.13 3118.74 1967.33 3048.33

15 Sep 14 2079.58 3118.83 1969.00 3047.00

16 Sep 14 2088.54 3133.22 1976.00 3061.67

17 Sep 14 2130.76 3199.97 2008.33 3127.67

18 Sep 14 2162.86 3238.56 2028.00 3163.67

19 Sep 14 2201.93 3296.53 2064.33 3232.33

22 Sep 14 2244.80 3356.62 2100.00 3288.67

23 Sep 14 2218.73 3324.63 2075.00 3259.33

24 Sep 14 2267.33 3393.51 2120.67 3328.00

25 Sep 14 2250.73 3353.48 2099.33 3289.67

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GeneralCoffee Shortage Largest In 9-YearsCoffee is set for the largest shortage in 9-years as drought shrinks the crop in Brazil, the biggest grower. Demand will exceed production by 8.8 million bags in the 12 months starting Oct. 1, the most since 2005-06. The surplus was 7 million bags in 2013-14. Brazil’s arabica crop will be 29.5 million bags in 2014-15, the smallest in 7-years. Arabica coffee prices jumped 83% this year as dry weather damaged trees carrying this year’s harvest. The surge forced buyers including J.M. Smucker Co., maker of Folgers, the best-selling U.S. brand, to raise retail prices.

Global production will fall 8.1% to 142.7 million bags, a 3-year low, as consumption climbs 2% to 151.5 million bags. The Brazil crop estimate was raised to 47 million bags from 45.5 million bags in May, partly because of a larger robusta crop. The arabica deficit will be 6.9 million bags and robusta 1.9 million bags. The estimate of Brazil’s robusta output was raised to 17.5 million bags from 17.1 million bags, while Indonesia’s robusta production is seen falling to 7.5 million bags from 10.5 million bags last year. Vietnam, the world’s largest robusta grower, will produce 27.5 million bags of the beans, down from 28.8 million bags a year earlier. Production in Colombia, the second-biggest arabica grower, will rise to 12 million bags from a previous estimate of 11.5 million bags. The next crop stands to benefit from the best conditions in 6-seasons, after a tree renovation program boosted output from 7 million bags in 2011-12.

[Volcafe 05/09/14]

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COMMODITY NEWSCOFFEE

Ethiopia

Horizon Plantations To Spend US$500 Million On Coffee, OrangesHorizon Plantations Ethiopia Plc, majority-owned by Saudi billionaire Mohamed al-Amoudi, plans to almost double annual revenue within 3-years by investing at least US$500 million in coffee and orange projects. The agriculture company will train workers, improve roads and replace washing units at the Limmu and Bebeka coffee plantations, which together have over 18,000 ha under coffee. Investment in Limmu may help double production to about 1.5 tons a hectare by 2018. The development is part of a 5-year program to invest in projects that also include Upper Awash Agro-Industry Enterprise, the country’s largest orange grower with 1,200 ha of citrus.

Ethiopia, Africa’s biggest coffee producer, may see earnings from shipments of Arabica coffee rise 25% to about US$900 million in 2014-2015 as prices rise because of shortage caused by a drought in Brazil. Horizon bought the 2-coffee farms for US$80 million last year from the Ethiopian government, which is seeking investment in projects that process agricultural products. Horizon has a sales target of 500 million Ethiopian birr by 2017. The company also produces organic fruit and vegetables.

Bebeka, in southwest Ethiopia, is the world’s biggest unfragmented coffee estate with 10,030 ha under plantation. Limmu, 350 km southwest of Addis Ababa in the Oromia region, has 8,000 ha under coffee and produces 5,000 tons a year of the beans. Bebeka Coffee Estate doubled production to about 1.4 tons of coffee last year. Around 90% of the company’s coffee last year was directly sold to buyers in countries including the U.S., Germany, South Korea and Japan. Horizon is looking for a foreign partner to invest in the Coffee Processing and Warehouse Enterprise on the outskirts of the capital.


Kenya Kenyan Coffee Prices FallThe maximum price of Kenya’s top grade AA coffee has fallen this month to $300 per bag. Kenya is a fairly small producer by global standards, but its quality beans are used by roasters to blend with beans from other regions.

23rd Sept 16th Sept 9th Sept 26th Aug

AA COF-AA-KE $187-300 $199-$323 $222-$346 $207-345

AB COF-AB-KE $128-247 $122-$252 $168-$258 $181-252

Average price per bag $218.88 $221.00 $238.07 $205.32

South AfricaNestlé To Boost South African Business With US$200 Million InvestmentNestlé will invest US$200 million to boost its business in South Africa over the next 5-years.

The investment plan will see Nestle put in funds for capacity building and general renovation; including converting Nestlé’s Mossel Bay dairy factory to a water neutral one. Its coffee factory in Kwa-Zulu Natal is also one of its investment targets, as Nestle intends to make South Africa its coffee export hub for the African region.

Although Nestlé already has 9-factories in South Africa it is hoping to build new ones in other African nation including Mozambique and Ethiopia. A new CEO Ian Donald has been appointed who will succeed Sullivan O’Carroll at the end of September.

[Ventures 19/09/14]

14

TanzaniaBumper Coffee Harvest In 2014-15, Tracking New York MarketAverage arabica coffee prices in Tanzania, Africa’s fourth-largest producer, edged higher at auction after prices rose in the New York coffee market. Prices of the robusta variety of beans fell at the same auction. The state-run coffee board said a total of 19,576 bags were offered at the latest sale and that 18,648 bags were purchased. At the previous sale, a total of 23,536 60-kg bags had been offered for sale, with 23,336 bags sold.

Tanzania expects a bumper coffee harvest in 2014/15 thanks to good rain and plantings by farmers. TCB expects a bumper harvest with production likely to be in excess of 55,000 tonnes. Tanzania, Africa’s 4th-biggest coffee producer, yielded around 48,690 tonnes of coffee last season, behind the continent’s top growers - Ethiopia, Uganda and Ivory Coast. All robusta coffee was sold at the first auction of the season and more than 90% of the arabica beans on offer also sold. Prices offered to farmers are above the terminal market.

18th Sept 11th Sept 4th Sept 26th Aug

AA $180.00-253.00 $182.00-236.00 $213.60-253 $202-259


A $196.00-239.60 $179.40-213.00 $212-237.60 $198-232.20


CPT Introduces Voucher Scheme To Support Small-Scale Coffee GrowersThe Coffee Partnership for Tanzania [CPT] has introduced a voucher scheme aimed at supporting that will support innovative projects and concepts of smaller, ideally Tanzanian partners in order to support additional small-scale coffee producers. The programme includes qualification of coffee smallholder farmers in agronomic and basic business skills, promotion of the organisational development of farmers and formation of producer organizations, improvement of farmers’ access to financial services and investments into nurseries and wet mills. Implementing partners are Coffee Management Services Ltd., Hanns R. Neumann Stiftung and Tutunze Kahawa Ltd. Approximately 45,000 farmers have been trained in Good Agricultural Practices [GAP] of which 35,000 farmers are organised in registered producer organisations and 15,000 farmers have been certified under a renowned coffee certification scheme. US$1.3m in credit has been extended to smallholder farmers and 18 nurseries have been created along with 73 wet mills.

[IPP Media 24/09/14]

15

COMMODITY NEWSCOFFEE

UgandaUganda Coffee Exports Fall In AugustUganda exported 268,033 60-kg bags of coffee in August, down from 318,338 bags shipped in the same month a year ago, extending a pattern of lower exports this year. The Uganda Coffee Development Authority [UCDA] did not give a reason for the fall. But industry experts in Uganda, Africa’s number one exporter of coffee which mostly cultivates the robusta variety, have previously blamed drought affecting the crop in western Uganda during flowering and bean formation.

[Reuters 22/09/14]

Coffee Exports Falling After Beetle DamageUganda’s coffee exports will fall more than forecast after the Black Twig Borer beetle damaged some of the crop. Shipments in the 12 months ending Sept. 30 will drop to 3.55 million bags, according to the Uganda Coffee Development Authority [UCDA], lowering its forecast from 3.6 million bags. Last year’s production was 3.58 million bags, the most in 14 years. The Black Twig Borer affected Luwero, Masaka and Mpigi in the central growing region. Exports this month may be 250,000 bags, on top of 3.3 million bags shipped since October through August, with 78% robusta beans. The Black Twig Borer cut exports by 270,000 bags last season. A drought last year and early this year is also responsible for crop damage and reduced shipments. Uganda mainly ships beans to the European Union, the U.S., Sudan, Switzerland, India, Singapore and Russia. The country may boost annual output to 4.5 million bags by 2018 as it plants at least 100 million trees annually for 3-years starting in 2015.


Coffee Exports Seen Rising 3% In 2014/15 SeasonUganda’s coffee exports are likely to rise by 3% to 3.6 million 60-kg bags of the beans in the 2014/15 [Oct-Sep] crop year largely due to good weather and attractive prices. Uganda, Africa’s #1 exporter of coffee, predominately robusta, expects 2013/14 exports to hit a forecast for the season of 3.5 million bags. By the end of July, Uganda had shipped 3 million bags since the beginning of the season. The National Union of Coffee Agribusinesses and Farm Enterprises [NUCAFE] noted there was a marginal risk of a harsh dry spell between January and March that could affect the crop, but did not expect this to affect the overall output.

A July sector performance report by the state-run Uganda Coffee Development Authority [UCDA] said eastern Uganda was experiencing heavy rainfall in all coffee-growing districts noting rains were supporting good bean formation and development. Coffee farms in eastern and central Uganda, which jointly account for 55% of Uganda’s annual coffee production, are expected to harvest the commodity later this year. At the current average of 3,500-4,500/kg of dry bean cherries, farmgate prices were attractive enough to spur farmers to release stocks onto the market.

[Business Recorder 15/09/14]

Rains Delaying Main Coffee Harvest by a MonthUganda’s main coffee harvest may be delayed for at least a month as high moisture content in the soil following rains delays ripening of the crop. Peak harvesting in the central and eastern regions, the main producing areas, may be in December instead of October to November because of rains in the last month according to the National Union of Coffee Agribusiness and Farm Enterprises [NUCAFE]. Rains may persist until December with some regions having above-normal amounts. The rains may result in a bumper secondary harvest in May-June as there has been good flower budding. Shipments from Oct. 1 through September this year may climb to 3.8 million 60-kg bags, from last season’s 3.58 million bags. Exports may rise further to 4 million bags in 2014-15. Uganda mainly ships beans to the European Union, the U.S., Sudan, Switzerland, India, Japan and Russia.


Government Sets Up Coffee Research CentreThe Ugandan government has set up an independent coffee research centre aimed at boosting the crop’s production, boost farmers income and improve the country’s economic progress through increased export revenue. The National Agricultural Research Organisation has turned the Mukono-Kituuza-based National Crop Resources Research Institute [NACRRI] into an independent National Coffee Research Institute [NACORI] and transferred its activities to Namulonge. The centre will focus on developing varieties that can resist diseases as well as those that can withstand the adverse effects of climatic change. Data from Uganda Coffee Development Authority [UCDA] showed 2.7 million bags of coffee worth US$393 million were produced and sold in 2012 and 3.58 million bags valued at US$433 million were produced last year.

[Bernama 24/09/14]

16

RegionalWest Africa To Produce 1.8 Million Tons Of Cotton In 2014-2015 CampaignAfter a timid growth, up 2% at the end of the 2013-2014 campaign, West African cotton production is expected to increase by 16% during the year 2014-2015, from 1.6 million tonnes of seeds to 1.8 million tonnes. According to the U.S. Department of Agriculture [USDA] growth will be driven by production in Mali which will increase from 450,000 tons to 600,000 tons and Burkina Faso which will increase from 60,000 tonnes to 710,000 tonne. Ivory Coast and Chad will see increases although weaker up 35 000 tonnes and 2000 tons respectively while Senegal is expected to register a slight decline of 1000 tonnes. However the general price trend is downward ranging from 15-20 francs Cfa/kg.

[Ecofin 24/09/14]

GhanaGovernment Focus On Increasing Investment In Textile IndustryThe Ghanaian cotton industry which serves as the raw material base, is already receiving attention, thus government now plans to extend its focus to finished products by targeting increased investment in the textile industry. President Dramani Mahama during a familiarization visit to Dignity DTRT company, a garment production company in Accra, was the first in a series in a bid to encourage and support them to improve production. Attempts by Ghanaian companies to take advantage of the Africa Growth and Opportunities Act [AGOA] in the past could not achieve the maximum results because of failure to beat competition from the Asian market. The President stressed the need for the diversification of the economy with a need for a shift to value addition.

[YNFX 08/09/14]

KenyaTrade Policy Streamlines Activities / Tools To Aid Textile Sector

Following liberalisation that killed the sector and the AGOA lifeline which is not sufficient to save the ailing textile and apparel industry there is need to work on reversing policy effects and ‘mitumba’ imports. There are two provisions in the World Trade Organisation [WTO] framework that Kenya could work on to make the local textile and apparel sector less reliant on exports and trade agreements. Article VI of the WTO agreement governs anti-dumping measures which gives a country the right to take steps against imports of a product below its ‘normal value’ and Article 29 of GATT 1994 provides for safeguard measures which can be adopted by a country whose industry is suffering due to excessive imports. Cheap imports from the Far East hurt local manufacturers while EPZ textile companies deliver good quality clothing for markets abroad.

The textile industry has the capacity to employ thousands of people and contribute meaningfully to economic growth if nurtured and supported. Remedies exist such as an anti-dumping duty or price undertakings where an exporter raises the price of a product to avoid an anti-dumping duty. Kenya has not made any safeguard application to the WTO which would be an alternative. This would require an independent safeguards authority to look into these sector issues which needs financial support, extensive data collection of anti-dumping evidence. Kenya needs to streamline activities in the sector in such a way that the local textile industry is able to reap the benefits of providing quality products at an affordable price. In addition, trade policy, firm level interventions would lead to a more vibrant and less export reliant sector.

[YNFX 16/09/14]

17

COMMODITY NEWSCOTTON, TEXTILES & LEATHER GOODS

To Push US Textile Exports To US$1 BillionKenya plans to push its current US$300 million worth of textiles exports to at least US$1 billion in the next 2-years for which they need to reduce the cost of doing business and at the same time improve the ease of doing business. To achieve the target Kenya must become a low cost apparel manufacturing country. Kenya is in the process of putting in place policies that will support local manufacturers. The proposed Special Economic Zones law will help increase the volume and supply of locally manufactured goods. Kenya plans to begin rolling out the Textile City in order to revive the sector. Kenya also plans not to impose a ban on the importation of second hand goods but will use market forces to ensure their demand suppressed. Kenya to achieve its target would also have to tackle the competition faced by them from other textile manufacturing nations such as Ethiopia and Vietnam.

[YNFX 16/08/14]

Chinese Jiangsu Lianfa Inks Deal To Build Textile Plant Kenyan Cabinet Secretary for Industrialisation and Enterprise Development Adan Mohammed and Jiangsu Lianfa Textile Company president Xiangjun Kong signed a deal to build a US$500 million textile factory to be located in the outskirts of the capital on a 50,000 acre cotton farm in Naivasha. The plant is expected to produce goods worth US$1.5 billion p.a and is also anticipated to triple, the nation’s annual production of textile goods. Textile production recorded a 6.5% growth in 2013 predominantly supported by manufacture of twine, cordage and rope as well as knitting wool. The company has also completed pre-investment evaluations to build a textile factory in Addis Ababa, Ethiopia and has made similar pre-investment assessments in Uganda, and Tanzania. The Indian government is also working on the proposal for the expansion of Rift Valley Textile Company Ltd, once the government arrives at an agreement the Export-Import Bank of India stated that it will provide funding worth 7.9 billion Kenyan shillings for the expansion project.

[YNFX 08/09/14]

NigeriaNigerian Textile And Apparel Sector Showing Signs Of ProgressThe apparel and textile sector is showing signs of improvement despite challenges faced by a number of textile players. In H1 201 capacity utilisation in the sector was 37.4% by the H2 2013 this had risen to 44.9% according to the Manufacturers Association of Nigeria [MAN]. Capacity utilisation is one key way of determining the health of a sector or industry because it shows the relationship between actual output produced and potential output that could be produced with installed equipment.

The players are also sourcing more raw materials from home as local input content in H1 2013 was 52.86% while that of H2 2013, it increased to 60.79%. Reduction of inventory [stock] is also a key factor in business success. Inventory was reduced to N418 million in H1 2013 and to N401 million in H2 2013. Meanwhile stakeholders invested N2.714 billion in 2013 in land, plants, machines, and equipment indicating the sector will perform better if issues such as business environment, infrastructure and business models are tackled. According to the Nigeria Textile Manufacturers Association [NTMAN], there were only 10 surviving fabrics makers in the country, as textile and apparel players face compounded problems such as unrestrained imports of cheap products from Asia, irregular power supply, poor access to finance amongst others. Moreover, government agencies often gave uniform contracts to non-national companies who then import the goods.

[All Africa 11/08/14]

South AfricaCotton Textile Mediation Yields a Recommended Settlement3,000 Southern African Clothing and Textile Workers’ Union [SACTWU] members in the cotton textile sector have been on strike for the last 3-weeks. The union is demanding an 8.75% wage increase, 2.5% on peripheral rights issues, and the formation of a bargaining chamber for industrial textiles workers. Following a union ballot in mid-June, employers had tabled an increase of 7%. The Commission for Conciliation, Mediation and Arbitration [CCMA] has last week offered an intervention which was accepted by SACTWU and SACTPEA [South African Cotton Textile Processing Employers’ Association]. Following a mediation meeting the union will consult members to secure a final mandate.

[Congress of South African Trade Unions 14/08/14]

18

MozambiqueRatifying International Treaty To Combat Illegal FishingGovernment has ratified a United Nations Food and Agriculture Organisation [UNFAO] agreement on port measures to combat and eliminate illegal fishing. Following Gabon and the Seychelles, Mozambique is the 3rd African country to sign the treaty [FAO Port State Measures Agreement – PSMA]. In Mozambique, the annual impacts of illegal fishing are estimated at about US$35 million, and fishing without a license and reporting false catch quotas are the biggest concerns for the authorities. Billed as being low-cost but high-impact, the initiative aims to ensure multilateral intervention to detect vessels suspected of illegal activities and prohibit their entry to ports of the signatory countries, as well as banning the purchase of the fish they carry.

[Macauhub 04/09/14]

Mozambique and China Sign Agreement On Fishing PortThe Mozambican and Chinese governments signed an agreement in Maputo for financing the rehabilitation of Beira fishing port. Once complete the US$120 million port is predicted to handle 70,000 tonnes of fishery produce a year. The move will increase the port’s freezing and storage capacity.

[AIM 1/09/14]

World Bank Finances Fishing In MozambiqueThe World Bank is providing Mozambique with US$57.9 million to increase fishing production over the next 6-years. The funding, which involves the French Development Agency [AFD], is part of the SWIOFish programme - “South West Indian Ocean Fisheries” - underway in the southwest Indian Ocean. The funding will be directed to increasing fisheries productivity, job creation through targeted interventions to boost small producers and drive economic growth through fishing and its associated value chain. Other components of the programme are related to the refurbishment or modernisation of fishing ports, landing sites, fish markets, laboratories and research facilities. In late August Mozambique, Tanzania and Kenya signed the Maputo Declaration, an instrument establishing minimum terms and conditions for fisheries agreements in the southwest Indian Ocean, with a focus on tuna fishing.

[Macauhub/MZ 23/09/14]

19

COMMODITY NEWSFISH

GeneralHeineken Rejects Takeover Proposal By SABMillerHeineken, the Dutch brewer, has rejected a takeover approach made by SABMiller, quashing a multibillion-dollar beer deal. With a valuation of about US$44 billion, Heineken is one of the last big independent brewers in the world, remaining autonomous in an era of global consolidation.

SABMiller, headquartered in London, has a market capitalization of about US$55 billion, and produces a range of beers including Miller Lite, Blue Moon and Peroni.

[New York Times 15/09/14]

CameroonImproved Maize SeedVia 18-seed fields that extend over 449 acres, the Programme National d’Appui à la Filière Maïs [PNAFM] is to produce 900 tonnes of improved maize seeds in East Cameroon. This project replaces older seed stocks from the 1980s increasing production levels to 6-8 t/ha against 2-3 ha currently. Maize production is 1.8 million tonnes against a domestic demand of 2 million tonnes. The deficit is imported.

[Ecofin 23/09/14]

DRCWorld Bank US$110 Million Agricultural Project A US$110 million World Bank project aims to mobilise the national agricultural sector financing. The Bas-congo region, specifically Kimpese town, will see the project involving 50,000 producers focusing on growing rice, palm oil and cassava until 2019. US$48 million of that will be used to rehabilitate 500 km of strategic roads for agricultural traffic.

[Ecofin 21/09/14]

20

COMMODITY NEWSFOODSTUFFS & BEVERAGES

MaliMoulin Moderne du Mali M3 To DiversifyThe AfDB approved a €16.8-million [10.8 billion francs CFA] private sector corporate loan to help Mali’s agro-food company, Moulin Moderne du Mali M3 diversify its activities by setting up 7-production chains on its site at Ségou, in northern Mali, for the production of pasta, wheat, millet and maize, couscous and flour.

[AfDB 19/09/14]

South AfricaSouth Africa Lifts Livestock Import BanAfter months of suspension livestock producers [cattle, sheep and goats] from Namibia, Botswana, Lesotho and Swaziland can now export goods to South Africa. Effective August 26 new conditions are now as follows:

- The livestock must originate from Foot and Mouth Disease Free Zones of Namibia and not within 5km radius of any farm under restriction for Rift Valley and may not transit through a Rift Valley fever infected zone;

- The farm of origin must not be under any veterinary restrictions; - All animals to be exported must be identified by means of a permanent mark or ear tags; - Exporters are required to obtain a permit from the Registrar of Livestock Improvement of

South Africa except if the animals are intended for direct slaughter.

The Meat Board note a team of experts has been established to conduct an in-depth study of the financial implications of Namibia revamping its existing abattoirs and slaughter houses locally. The Meat Board also suggested that exports to Angola, DRC, Zambia and Zimbabwe should be researched while a market in the Middle East for goats should be explored. Local slaughtering capacity must be increased and under-utilised farms must be made available. Namibia’s livestock industry rakes in more than N$2 billion annually from an average of 160,000 weaners exported to South Africa, as well as 100,000 sheep and 240,000 goats.

UgandaUgandan Dairy SectorThe Africa Agribusiness Academy [AAA], has launched the Dairy Community of Practice [CoP Dairy], a working group designed to meet the challenges currently facing the national dairy sector through the sharing of information and technology. Dairy production has increased from 460 million litres in 1990 to 1.6 billion litres in 2011.

[Ecofin 21/09/14]

ZimbabweGovernment Tightens Controls On GMO ImportsThe Government of Zimbabwe is to tighten controls to curb importation of genetically modified [GM] material contained in agricultural products to avoid contaminating farming soil, protect farmers and ensure safety of consumers. The measures will be enforced through regulatory bodies authorised to issue import permits for instance the Grain Marketing Board will be the sole issuer of grain permits. All genetically modified material will remain banned in terms of laws and policy of Zimbabwe. Importers will need to show authorities certificates from country of origin of the imports, indicating that the material being imported is GMO free.

[Herald 22/08/14]21

COMMODITY NEWSFOODSTUFFS & BEVERAGES

22

GeneralCargill Joins TFT, Advances Sustainable Palm OilCargill is to become a member of the Forest Trust, an international non-governmental organization that partners with companies to build responsible supply chains, in an effort to advance its commitment to sustainable palm oil. The company will publish 4-palm oil-related progress reports annually.

[Environmental Leader 16/09/14]

Hershey Announces Enhanced Palm Oil Sourcing PolicyThe Hershey Company announced a new palm oil sourcing policy that updates and strengthens its commitment to source 100 percent traceable and responsible palm oil, a commitment the company announced in December 2013. The comprehensive sourcing policy details the requirements to which all suppliers in the company’s palm oil supply chain will be held accountable. In addition to provisions that protect against deforestation, preserve native species’ habitats and protect the environment, the new sourcing policy also provides details on labor and human rights protections and the inclusion of smallholder palm farmers in the supply chain.

[UK Finance 24/09/14]

Cote d’IvoirePalmci’s H1 Net Profit Nearly 9% Y-O-YIvory Coast palm oil producer Palmci’s net profit rose nearly 9% year-on-year to over 16.6 billion CFA francs [US$32.61 million] due to higher world prices and lower taxes on business profits. Turnover was 89.77 billion CFA francs, up from 86.47 billion last year during the same period. Palmci forecast year-end output of 280,000 tonnes compared to 270,000 tonnes produced last year.

[Reuters 09/09/14]

23

COMMODITY NEWSPALM & COOKING OIL

DekelOil Palm Oil Production Expected To Generate Rapid GrowthDekelOil’s positive interim results were based on a rapid move to palm oil production 18 months after construction began on its 60 tonne an hour plant in the Ivory Coast. In commission for just 4- months the facility posted revenues of €4.5million with an operating profit of €300,000. DekelOil has cultivated 1,900ha while it has a nursery of 1 million plants.

The addition of further logistics hubs should improve things further. It expects to produce 16-20,000 tonnes of crude palm oil this year, but the state-of-the-art Ayanouan plant, 2-hours from the port of Abidjan, has the capacity to churn out 70,000 tonnes per annum. Dekel owns 51% of the operation and its share of the revenues is predicted to be €28.1million next year, rising to €36.9million in 2016.

In the next 1-2 years Dekel hopes to expand its company owned plantations by a further 3-5,000 ha, while work is expected to get started on a second 60-tonne-per-hour plant. Located near the city of Guitry in the Ivory Coast, it will be fed from its own palm estate, covering 24,000 ha. Dekel is also looking at establishing a presence in Ghana, where it is acquiring land, while it also expects to double the size of the operation at Guitry.

Meanwhile demand for palm oil, which is used in products as diverse as cereals, crisps, soap and cosmetics, is expected to double by 2020. West Africa continues to attract the attention of major palm oil developers looking to secure their future expansion.

[Proactive Investors 22/09/14]

NigeriaOsun Raises 54,750 Seedlings To Replace Ageing TreesThe government has raised 54,750 improved oil palm seedlings to replace ageing palm trees in Osun State. The free distribution is a component of government’s Semi Wild Groove Yield Enhancement Scheme.

[Daily Times 07/09/14]

24

GhanaImport Prohibitions By Land Will Lose Ghana US$22.5 Million The Ghanaian Government’s decision to ban rice imports by land routes [November 2013] creates an annual shortfall of US$22.5 million depriving the country revenues collected on small rice importers. Stakeholders have asked for the decision to be reconsidered. Ghana, which produces only 35% of its rice consumption estimated at 975,000 tons, injects US$300 million to purchase the commodity. Under its agricultural policy, Ghana should reduce its imports by 20% each year in order to achieve self-sufficiency within the next 4 years.

[Ecofin 25/09/14]

FinGAP Grants US$75 Million To Boost Rice SectorDutch international development outfit SNV Netherland Development Organisation has secured a US$75million funding from the USAID’s Financing Ghanaian Agriculture Project [FinGAP] to boost the capacity of local rice producers in the 3-northern regions. The facility is expected to allow rice farmers to access the necessary funds and logistics to increase yields and produce quality grain that will meet international standards in order to attract investors.

[Ghanaweb 18/09/14]

Nigeria Government Approves N13 Billion For Rice, Cassava MillsThe Federal Government has approved N13 billion for the procurement of 10 integrated rice mills and 6-cassava flour mills to boost rice and cassava production. The rice mills, located in Kebbi, Zamfara, Kaduna, Ogun, Bayelsa, Niger, Kogi, Anambra, Benue and Bauchi States will each have a capacity to mill 36,000 MT of paddy rice. The cassava mills will be located in Ondo, Ogun, Abia, Delta, Cross River, Nasarawa states. Each unit will be owned managed and operated by the private sector. The aim is to reduce the import of rice.

[Times 10/09/14]

SenegalExim Extends US$62.95 Million Rice Credit The Export Import Bank of India has extended a US$62.95 million Line of Credit [LOC} to Senegal for a rice self-sufficiency programme. Under the LOC, which are generally aimed at pushing the country’s exports, Exim Bank will reimburse 100% of the contract value to the Indian exporter of the goods, upfront upon the shipment of the goods.

[Economic Times 18/09/14]

25

COMMODITY NEWSRICE

GhanaEastern Region To Get New Sugar MillA US$250 million sugar mill project is to be set up in the Eastern Region to produce sugar and ethanol for export to the West Africa market. The project, earmarked to begin next year, would produce 200 metric tonnes of sugar and 50 million litres of ethanol annually. Spearheaded by the Nungua Warehouse Ghana Limited (NWGL), a wholly owned Ghanaian company, which is into the importation and distribution of ethanol, the project will receive assistance from Gapuma UK Limited and Superior Spirits Pvt of India.

[Ghana Web 09/09/14]

KenyaMumias Sugar Warns Of Wider Annual LossKenya’s Mumias Sugar warned that projected losses for the year to June 2014 would be 25% bigger than the previous year’s pretax loss of 2.24 billion shillings [US$25.3 million] blaming “a significant drop” in sugar prices due to illegal sugar imports and a shortage of cane due to a poor harvest. The company is also restructuring management.

[Reuters 10/09/14]

26

COMMODITY NEWSSUGAR

KenyaSenate To Host Tea Growers ConferenceThe Kenyan Senate will host a national tea growers’ conference to discuss the crisis in the sub sector. The conference planned for October 7, is being organised by the committee on Agriculture and will bring together small scale tea farmers tea, directors of all tea factories, political leaders from tea growing regions and the Kenya Tea Development Agency. Prices have fallen significantly impacting tea earnings now at the worst level in the last 2-decades. KTDA released the second payment of Sh19.80 billion, bringing the cumulative earnings for the nearly 600,000 small scale tea farmers contracted to 66 factories under its management to Sh35.54 billion for the year ended June 30. This is 30% than the Sh51.30 billion total dividend paid to farmers in the 2012/13 financial year.

[Star 24/09/14]

Mombasa Tea Brokers Begin Real-Time Streaming Of AuctionThe real-time streaming of the Mombasa tea auction to authorised stakeholders has commenced this month ahead of the April implementation of electronic trading. The East African Tea Trade Association [EATTA] that runs the auction at the Tea Trade Centre says the move will provide transparency in the way bids are communicated. Web cameras will stream auction proceedings live to all authorised stakeholders. Auctions have been available online since August 25, with the net-cast capturing buyers’ bids and the accepted final bids by brokers. The live transaction is only offered through CFC Stanbic Bank. EATTA announced it is finalising the integration of Equity and Citi banks platforms to effect the real-time electronic tea sales payment system. The EATTA-run Mombasa tea auction is the largest black tea exchange centre in the world, with 32% of global tea exports passing through it.

[All Africa 10/09/14]

27

COMMODITY NEWSTEA

Revenue From Kenya’s Small-Scale Tea Farmers Falls 24%Tea revenue from Kenya’s small-scale tea farmers fell 24% to 52.9 billion shillings [US$594.38 million] in the 2013/14 financial year due to a global glut. Tea is a leading foreign exchange earner in East Africa’s largest economy and members of Kenya Tea Development Agency [KTDA] account for about 60% of tea output in Kenya, the world’s top exporter of black tea and represents about 500,000 small-scale farmers. The rest of Kenya’s tea is produced by large-scale farmers and corporations. KTDA, said in the financial year that ended in June, tea prices at the weekly auction conducted in Mombasa averaged US$2.43/kg compared with US$3.26/kg in 2013.

The global supply of tea is high and will have an impact on overall prices and earnings. The favourable weather conditions experienced in 2013 through 2014 led to an oversupply of tea which triggered a significant drop in prices. The volume of green leaf produced by small-scale farmers remained flat at 1.1 billion kg over the period compared with the previous year.

In the previous 2012/13 financial year, the KTDA posted record earnings of 69 billion shillings as a result of better farm husbandry, efficient factory processes, favourable exchange rates and increased auction prices.. Exports raked in US$1.3 billion last year. Kenya’s tea exports rose slightly in the first 6-months of the year, while average prices at the auction dipped. Kenyan agricultural firms Kakuzi, Williamson Tea, Kapchorua Tea and Sasini have reported lower earnings this year on lower prices.

[Business Recorder 21/09/14]

MPs Urged To End KTDA Monopoly In Tea MarketingTea farmers in Meru county have called on the government to abolish the marketing monopoly enjoyed by the Kenya Tea Development Agency [KTDA]. Members of Kinoro and Kionyo tea factories told the parliamentary Committee on Environment and Agriculture that the monopoly has led to a drastic fall in tea prices. Allowing other competitors to market the commodity would revive the sector.

[Star 23/09/14]

Traders Say Taxes Curtailing DemandTea traders have maintained that the Ad valorem tax has continued to affect Kenyan tea in the competitive global market. They said the tax has made Kenya’s tea exports less competitive in the international market. According to the East Africa Tea Traders Association [EATTA], the tax is not in the farmer’s interest and only makes Kenyan tea loose its market to other countries with fewer levies. EATTA has asked the government to review such bottlenecks that affect tea prices. Ad valorem tax is charged on the total worth of tea at the point of sale at the auction. The association wants taxation to be done per kilogramme and not on percentage, which comes with the Ad valorem tax. This, they say will help Kenyan tea regain its market share.

[The Star 12/09/14]

Auction [Per kg] 23rd Sept 16th Sept 9th Sept 2nd Sept Aug 26th

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TEABP1-BEST-KE$2.12-3.50 $2.21-3.82 $2.20-3.51 $2.28-3.73/kg $2.50-3.90/kg

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$2.36-2.97 $2.42-2.78 $2.34-$2.70 $2.36-2.72/kg $2.34-2.74/kg

Tea Factory to Be Set Up in KapsokwonyPlans are underway to establish a tea factory in Mt Elgon, Bungoma County. The Department for Agriculture will partner with the Kenya Tea Research Foundation, which has carried out feasibility studies on the region’s potential for tea farming.

[Star 05/09/14]

28

GeneralEuropean Buyers Stay On The Side Lines Producers in West Africa report that the rather quiet but sustained demand continues with new orders flowing at a steady but unchanged pace. European buyers have not yet returned in any strength to negotiate contracts for Q4. This is a slower resumption of the autumn and winter round of purchases. Analysts suggest this may be because prices are fairly stable and there is no immediate pressure from a lack of availability.

[ITTO 15/09/14]

Potential In Middle East ImprovesProducers report that mills are busy preparing shipments for the Middle East and China but order levels have not improved beyond the steady flow seen over the past 3-months. For instance the Saudi housing and construction market is growing at an annual rate of between 5-7% due to high demand for housing development and commercial projects. Estimates suggest that the Kingdom will need more than 5 million new housing units across all cities by 2020.

[ITTO 15/09/14]

FOB Prices Largely UnchangedThe market for W. African timbers in Vietnam has grown and this market is now well established but mainly for ahandful of favoured species. Sawnwood prices in the region are largely unchanged and producers appear satisfied with the current levels and there have been no serious attempts by producers to raise prices. FOB prices for a few log contracts have moved up but these changes reflect only the normal adjustments not a shift in overall trend. The overall market outlook appears stable through into Q4 with shippers in Cameroon reported as being the most active at present.

[ITTO 15/09/14]

Weaker Demand In Chinese Market AnticipatedInternational markets are said to be quiet at present and no price movements for either logs or sawnwood have been reported. Demand for China is said to be steady but some exporters have been told that domestic demand in China for tropical wood products is easing as the government cools the housing market.

[ITTO 31/08/14]

Zhangjiagang Port Acts On EbolaZhangjiagang Port authorities began a programme to eliminate the risk of the Ebola virus entering China. A shipment of logs from Ebola affected African regions was quarantined. In order to protect dock workers strict measures have been introduced. Quarantine officers follow strict guidelines for disinfection of imported timber from Ebola affected countries which requires:

- Imported timber from affected countries will not be released until disinfected.

- All containers will be disinfected and inspected. - All on-site staff and workers must wear gloves and

other protective equipment. - If animal carcasses are found in the shipment

additional protection measures will be applied.

As the animal host of the disease is not completely clear Chinese authorities are acting to eliminate all animals in timber shipments. At present the port quarantine staff use methyl bromide or sulfuryl fluoride fumigation treatment of containers from African ports.

29

COMMODITY NEWSTIMBER

EU Tropical Hardwood Log Imports Slide Even FurtherEU imports of tropical hardwood logs were 68,000 cu.m in H1 2014, 35% less than the same period of 2013. Continuing delays in shipment of logs from Douala port has had a significant impact on log exports from Cameroon and Congo this year.

The civil war in Central African Republic and EUTR-related concerns over the reliability of legality documentation are other factors impeding EU tropical log imports this year.

Lack of availability elsewhere has encouraged an increase in EU log imports from Equatorial Guinea and Liberia during 2014, although the volumes involved are very small.

[ITTO 15/09/14]

Producers Content With Current Prices In EU MarketsEuropean buyers have not yet resumed purchasing after the summer vacation period but, with the economies in the main markets in the EU looking more positive. West African producers are convinced they will see sustained business through to year end. Overall, producer are expecting current price levels to be maintained and are saying that, because of rising production costs, price discounts are unlikely. At the same time, few would expect any major upward movements in prices and will be content, for the time being, to see prices hold on to the better levels attained during Q3.

[ITTO 31/08/14]

CameroonDouala Port Log Stockpile To Move In SeptemberThe new contractors, reportedly a consortium of Chinese companies, are due to take over port operations at Douala during September so the huge stockpile of logs awaiting export shipment may soon begin to move. Reports suggest that there could be as much as 400,000 cubic metres of timber at the port. Analysts are speculating on the impact in the market of a surge in log availability and suggest that, in the short-term, demand could ebb but note that demand for logs remains firm so the export of the large volumes from Douala may not have much impact.

[ITTO 31/08/14]

Tropical Log ImportsJan to Jun - 1000m3

30

CongoGenerous Incentives For Congo Investors There are positive developments in Congo Brazzaville where the government is very supportive of new investment in the forestry sector providing generous log export allowances for companies investing in processing capacity. On completion of the processing plants companies will be subject to log export quotas. Because of the number of new investors the availability of logs for export will improve. In the medium term the volumes of sawnwood and other processed products from Congo Brazzaville are expected to increase significantly.

[ITTO 15/09/14]

GabonGabon Millers Holding Back On InvestmentsCompanies in Gabon say there is still no sign of the government effecting repayment of the TVA tax. Exporters say it is becoming more and more difficult to do business and the economic outlook is uncertain. The burden on company waiting for the tax refund is affecting investments and adding to the perceived risk in the sector such that commercial financing is becoming more expensive and difficult to secure. Most new private investment in the region is now concentrated in Congo Brazzaville where the government is pouring money into the renovation of road, rail and port facilities.

[ITTO 31/08/14]

EU Plywood Imports From Gabon Are Low But RisingEU imports of hardwood plywood from Gabon were 10% higher in H1 2014 compared to the same period the previous year. Imports into France declined, but was offset by rising imports into Netherlands, Italy and Belgium. This is despite the change in Gabon’s GSP status which led to imposition of a 7% tariff on EU imports of hardwood plywood from Gabon at the start of 2014. Imports this year have also been disrupted by occasional strikes by customs officials at Libreville port in Gabon.

Both EU manufacturers and importers report better demand for okoume plywood in 2014 than in the previous year. This is driven by improved construction activity in the opening months of 2014 in Netherlands and Belgium and, more recently, by rising boat-building in Italy. However European consumption of okoume plywood is still very low by historical standards. Much of the existing demand is for FSC certified products. Apart from increases due to the imposition of higher export tariffs, prices for okoume plywood imported from Gabon have remained stable during H1 2014.

[ITTO 31/08/14]

Okume Import Tariff Reduced Following lobbying by associations representing European plywood manufacturers, the EU has reduced the tariff on imports of okoume veneer under product code 4408393010 from 7% to 0%. The tariff reduction was announced in European Council Regulation No 722/2014 of 24 June 2014 and backdated to 1 January 2014. This reverses the increase imposed at the start of the year due to the change in Gabon’s GSP status. The reduction does not apply to plywood imported from Gabon which continues to be subject to the 7% tariff. Gabon industry representatives have expressed concern that this measure favours EU-based over Gabon-based manufacturers.

[ITTO 31/08/14]

Imports of Plywood From Gabon by EU Member State

31

COMMODITY NEWSTIMBER

GhanaFirst Half Exports Up 4.5%Ghana’s H1 wood product exports amounted to 143,541 m3, up 4.5% on the 137,363 m3 shipped in H1 2013. Export of 3-products sawnwood, plywood and veneers accounted for 84% of H1 2014 export volume. The average unit value [AUV] dropped from €447/m3 in H1 2013 to €411 in H1 2014, an 8% decline. Exports to Mali recorded the highest AUV [€455/ m3] with exports to Nigeria earning the lowest at €312/ m3. Ghana’s wood exports in H1 2014 were shipped mainly to the Asian and Middle East markets [India, China, Israel, Singapore, Lebanon and Vietnam] 34%, Europe [Italy, France, Germany, Belgium and UK] 30% and Africa [South Africa, Egypt, Morocco, and the ECOWAS countries] 27%. Exports to ECOWAS countries totalled 31,741m3 valued at €9.75 million and comprised mainly the overland export of plywood and sawnwood.

[ITTO 31/08/14]

Exporters Seek Permission To Conclude Rosewood Export ContractsThe Importers and Exporters Association of Ghana has urged the Ministry of Lands and Natural Resources to amend the regulation putting a stop to rosewood exports. This is because several companies had concluded contracts prior to the ban on rosewood exports but now find their containers have been seized. The Customs Division of the Ghana Revenue Authority [GRA] said in August it had intercepted more than 50 containers of rosewood set for export.

[ITTO 15/09/14]

GFC Cracks Down On ContractorsThe Forestry Commission [FC] has ordered 6-timber contractors to temporary halt logging in the Kwahu Afram Plains North and South districts for failing to sign a social responsibility agreement with the local communities as called for in the concession agreement.

[ITTO 15/09/14]

Contractors Warned Not To Transport Timber At Night Timber contractors, firms and sawn millers have been warned not to transport timber at night. The ban on conveyance of timber after 1800 hours is still in force and culprits would be prosecuted and fined.

ZambiaZambia Plans A Timber MoratoriumZambia’s lawmakers are preparing to put a moratorium on the country’s timber trade, blaming foreigners for a surge in illegal logging and timber exports. The move will restrict domestic logging and ban the export of timber from the country. A bill is being finalised and is due to be submitted to President Sata for ratification before the end of 2014.

In June 2013, Wylbur Simuusa, the then-minister for lands, natural resources and environmental protection, cancelled all the government’s timber concessions with foreign nations and local private timber operators, citing allegations of corruption, malpractice and mismanagement. The timber concessions were originally intended to promote and stabilise investment in the forestry sector.

According to the Zambia Revenue Authority [ZRA], the nation earns US$12 million annually from timber exports. However, the cancelling of the concessions last year has spurred illegal logging for local use as well as for the export market. Zambia’s wood species, such as mukula and nkhula, are highly sought after on the international market due their quality and their suitability for making antique-style furniture. The United Nations Programme on Reducing Emissions from Deforestation and Forest Deforestation [REDD+] estimates that 298,000 ha are cut down each year.

[Reuters 17/09/14]

32

MalawiTobacco Revenue Reaches US$358 MillionAccording to the Tobacco Control Commission [TCC] Malawi’s tobacco revenue has hit US$358 million. Reports from the Auction Holdings Limited state Malawi had accumulated about US$138 million from the last tobacco sales at the auction floors. Since the market started, more than 100,000 million kg of tobacco have been sold together with barley 90.1 million kg and flue cured 7.5 million kg.

[Malawi 24 12/09/14]

Egyptian Investors To Promote Tobacco Malawi’s Tobacco Control Commission [TCC] noted the industry is set for a major boost following the visit of a group of 16 Egyptian tobacco investors exploring local opportunities. Areas of investment to be explored include primary processing and manufacturing of cigarettes. Malawi is one of the world’s largest tobacco producers where tobacco sales generate US$165 million annually – 53% of the country’s exports.

[Ventures 18/09/14]

ZambiaTobacco Farmers Form Union

The low demand and poor prices for tobacco experienced during this year’s marketing season has forced the creation of a Tobacco Farmers’ Union. The union which would be called Western Tobacco Growers’ Union was registered on August 15, 2014 under the Registrar of Societies. So far, the new union has managed to mobilise over 2,000 members and is in the process of affiliating to the Zambia National Farmers’ Union [ZNFU].

This year, Zambia projected to harvest 45 million kg of burley, virginia and fire tobacco valued at more than K750 million compared to last year’s 41.4 million kg valued at about K711.3 million. But producers felt betrayed when the country’s auction floors opened with offers as low as 30 cents /kg for the lowest grade of the golden leaf. Farmers protested against the low prices. The desperate situation forced the Tobacco Board of Zambia to write to merchants who underpaid farmers to top up on their payments relative to the prevailing kwacha/dollar exchange rate at the time farmers sold their produce.

The new farming season has already started with tobacco nurseries already in place but farmers still have produce left to be sold on the market in the current marketing season scheduled to formally end by September 30.

[The Post 09/09/14]

33

COMMODITY NEWSTOBACCO

ZimbabweTobacco Output Hits 216 Million KgThe 2014 tobacco marketing season has ended with the final production figure reaching 216.2 million kg after last sales took place on September 12th. The 2014 season started in mid-February. This represents a 30% increase compared to 2013 season’s total sales figure of 166,5 million kg. Earnings for this year were up 12% to US$685.2 million from US$612.1 million earned last year. Although deliveries and earnings were up, the average price for the season fell 14% to US$3.17/kg from US$3.67 last year. The contracted tobacco contributed 165,5 million kg, which translates to 76.5% of the total production for the year, while the balance of 50.7 million kg representing 23.5% of the received crop came from auctioned tobacco. In 2013 marketing season, contractors contributed almost 68% of total production while auction tobacco accounted for 32%.

In terms of purchases, Zimbabwe Leaf Tobacco received the most tobacco from both contract and auction sales of 3.,5 million kg valued at US$107.6 million that was sold at US$3.05/kg followed by Mashonaland Tobacco Company that received 31.5 million kg worth US$95.,9 million at US$3.04/kg and Tian Ze, which handled 31.1 million kg worth US$121.3 million at an average price of US$3.90/kg. Other major buyers included Northern Tobacco that bought 29.,4 million kg for US$108.7 million at an average price of US$3.70/kg and BOOST that handled 19.4 million kg worth US$50.3 million at US$2.59/kg. There were 18 registered buyers and contractors this season.

According to the Tobacco Industry Marketing Board [TIMB] 69,022 growers have registered for the 2015 season as compared to 63,668 who had registered by the same period last year. Tobacco is one of the country’s major agricultural exports, accounting for 10.7% of gross domestic product [GDP].

[Herald 24/09/14]

Belgium Largest Tobacco Export Market For ZimbabweBelgium has become the largest tobacco export market for Zimbabwean tobacco overtaking South Africa. Statistics from the Tobacco Industry Marketing Board [TIMB] show 18.4 million kg of the golden leaf had been exported to Belgium raking in US$92.5 million as at September 5. The tobacco was sold at an average price of US$5.03/kg. China was the second largest importer after 10.6 million kg were sold at a value of US$77.,8 million. During the same period last year, South Africa bought 13.,2 million kg of tobacco valued at US$42.7 million. China imported 12.3 million kg worth US$102 million.

[News Day 10/09/14]

34

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Com-Watch - Issue 41 - October 2014 Headlines By Region Western Africa Regional: West Africa To...

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