AFRICAN COMMODITY EXCHANGE• ANGOLA TO HAVE COMMODITIES EXCHANGE (P.3)• TANZANIAN COMMODITY EXCHANGE IN PIPELINE (P.3)• ICE TO LAUNCH EURO-DENOMINATED COCOA CONTRACT (P.6)

AFRICACOM-WATCH

Gambia Government Targets 35,000T Of Groundnut

ISSUE 45 | FEBRUARY 2015

Kenya Boosting Coffee Exports With Branding Initiative

Senegal Onion Sector Self-Suffi cient By 2016

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ICE To Launch Euro Cocoa Contract

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Angola To Have Commodities Exchange / Tanzania Commodity Exchange In Pipeline

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Kenya Boosting Coffee Exports With Branding Initiative

Senegal Onion Sector Self-Sufficient By 2016

Gambia Government Targets 35,000T Of Groundnut

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AFRICACOM-WATCH

ISSUE 45 | FEBRUARY 2015

Contents03 / General

04 / Cashew, Groundnut & Shea

05 / Cassava

06 / Cocoa

13 / Coffee

17 / Cotton, Textiles & Leather Goods

19 / Fish

20 / Foodstuffs & Beverages

22 / Palm & Edible Oil

24 / Rubber

25 / Sugar

29 / Tea

31 / Timber

33 / Tobacco

Top Stories

News Headlines By RegionWestern AfricaAngola: Angola To Have Commodities Exchange / Bioenergy Company Produces 3,100 Tons Of SugarBenin: Import Embargo On Poultry From NigeriaBurkina Faso: 2014-15 Cotton Harvest Seen Just Under 700,000T / 2014-2015 Cotton Marketing Year Sees Production At 540,000TCameroon: 10 Cassava Processing Units In Development / Cocoa Bean Exports Rise 9.5% Yr-Yr By End December / Cocoa Bean Prices Rise / Robusta Exports At 698T In December / To Boost Palm-Oil Production 26% In 3-Years / CFAF13.7 Billion Program To Develop Timber Industry / Timber Think Tank Publishes Critical ReportCôte d’Ivoire: Cashew Production To Hit 600,000T in 2015 / Stricter Cocoa Controls Cause Bottleneck In Ports / Puratos Inaugurates Cocoa Plant / Cocoa Arrivals At 1,045,000T By Jan. 25 / Exceeds 2014 Rubber ForecastGambia: Government Targets 35,000T Of Groundnut / Government To Licence Dealers In Basic Food CommoditiesGhana: Cocoa Board To Cut Crop Forecast On Dry Winds / Touton Sets Up Cocoa Processing Factory / Q3 Timber Exports Up 21%Guinea-Bissau: Cashew Export Forecast At 200,000TLiberia: Equatorial Palm Oil Secures Development LoanMali: Targets 800,000T Of Cotton Per Year By 2018 As Output JumpsMorocco: To Export 100,000T Less Citrus Fruits Than ProjectedNigeria: NEPC To Train Farmers In Shea Butter Production / Cocoa Processors Groan Under Huge Debts / Mid-Crop Cocoa Threatened By Prolonged Dry Winds / Cotton Fetches Lower Price In Global Market / Dufil’s Backward Integration In Palm Oil SectorSao Tome & Principe: European Parliament Approves Fisheries AgreementSenegal: Onion Sector Self-Sufficient By 2016Togo: Togo To Resume Cocoa And Coffee Production

Eastern AfricaEthiopia: Heineken Inaugurates Largest Brewery In The CountryKenya: Cassava Plant For Teso South / Cassava Virus Alert / Coffee Earnings Jump 17% In 2013-14 Crop Year / Coffee Boosting Exports With Branding Initiative / Government Raises Concern Over Coffee Industry / Measures Introduced To Increase Cotton Output To 140,000 Bales / Kenya To Establish Leather City To Spur Industrialization / Sugar Import Safeguards Come To An End / Raw Sugar Production Expected To Rebound In 2015 / Tea Farmers Demand Reduction Of KTDA Management Levy / Microfinance Institution To Expand Beyond Tea Sector / Tea Farmers Reject Takeover By County / Egypt Will Go On Buying Kenyan Tea / Top Price Of Kenya’s Best Grade Tea Rises At AuctionMalawi: Malawi Assesses Flood-Damaged TobaccoMozambique: Niassa Company Sells US$8 Million In CottonTanzania: Commodity Exchange In Pipeline / Arabica Prices Rise As Auctions Resume / Kagera Needs 67 Million Coffee Plants To Boost Production / Bulk Sugar Importation Scheme DelayedUganda: Coffee Exports Down 13% Yr-Yr In December / Sugar 2015 Output At Top Producers Up 11%

Southern AfricaMadagascar: Chezda Cyclone Destroys 25% Of Rice ProductionSouth Africa: Drought Closes KZN Sugar MillSwaziland: Sugar Production Expected To Grow 5% Over 3-YearsZambia: Zambia Sugar Posts Record Sugar Production / ZAFFICO Pressed To Meet Timber DemandZimbabwe: Tongaat Hulett To Double Cane Production By 2016 / Zimbabwe Imported US$29 Million Tobacco For Blending

neck In Ports / er Forecastod Commoditiestory / Q3 Timber

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THE AFRICAN COMMODITY REPORTBrought to you by CMA CGM / DELMAS Marketing

Rachel Bennett Dominic Rawle

AngolaAngola To Have Commodities ExchangeThe Capital Market Commission [CMC] of Angola will this year prepare a study with the aim of opening a Commodity Exchange to trade agricultural and livestock commodities contracts. The exchange will trade spot products. The exchange aims to bring together large, medium and small farmers from around the country.

[Macauhub/AO 22/01/15]

TanzaniaCommodity Exchange In PipelinePlans to set up the first commodity market in the East Africa Community [EAC] has made progress after registering a company and identifying a trading house. The move, that started 2-years ago, is waiting for the passing of relevant laws and regulations, training, testing and licensing of dealers. The process is to be finalised next year. The Tanzania Commodity Exchange Market Company Ltd was incorporated 3-months ago. The trading office will be in Kijitonyama along New Bagamoyo Road with funds secured from the World Bank.

The exchange will initially trade in 4-crops - cashew, coffee, cotton and rice which are currently being traded under the warehouse receipt system. The exchange is designed to include a trading floor, warehouse delivery locations and price tickers. President Kikwete, the pioneer of the market, said after visiting Ethiopian Commodity Exchange [ECX] in 2013 that the exchange would provide a marketplace where buyers and sellers meet to trade and be assured of quality, delivery and payment. A special committee was set up last year to fast-track the scheme.

[Daily News 01/01/15]

The Ethiopia Commodity Exchange

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COMMODITY NEWSGENERAL

Côte d’IvoireCashew Production To Hit 600,000T in 2015Whilst the cashew campaign for the 2014-2015 season opens next month, the Ivorian authorities have indicated an estimated production of 600,000 tons. According to Council of Cotton and Cashew, 540,000 tons will be destined for export while 60,000 tons will be processed locally. During the 2013-2014 campaign the country produced 550,000 tons. This ranked the country first within Africa and represents 20% of the world production. The challenge will be to create further infrastructure similar to a processing factory launched in Bouake in October 2014 by Cajou des Savanes to continue the trend.

[Agent 26/01/15]

GambiaGovernment Targets 35,000T Of GroundnutThe government through the Gambia Groundnut Corporation [GGC] is to purchase 30-35,000 MT of groundnuts for the 2014/15 trade season. GGC has pre-financed 80 Cooperative Produce Societies across the country for the trade. The GGC, the government’s corporative body responsible for the commercialisation of groundnuts, officially announced the start of the trade season on 9th January. GGC pegged the farm gate price at the secco at D15,250 per ton and at national depots at D16,500 with a commission of D1,250. The target is to buy all groundnuts produced. 18 private traders have been also pre-financed by the government to trade. GGC will embark on a nation-wide trade during which they will find out whether farmers have easy access to the primary buying points. The quality of groundnuts this year are higher than that of last year’s despite poor rainfall at the beginning of the season. URR North and South are leading areas in production. Meanwhile there is more than enough fertiliser with each secco and is sold to farmers at an affordable price.

[Daily Observer 16/01/15]

Guinea-BissauCashew Export Forecast At 200,000T Guinea-Bissau is expected to export 200,000 tons of cashew nuts, according to a forecast from the Ministry of Trade. The official forecast is based on the tonnage exported in 2014, around 136,000 tons, and an additional 20,000 tons that were intercepted in the port of Bissau for illegal export and more than 70,000 tons that were seized along the northern border with Senegal. However 4-constraints were noted including poor access roads for selling cashew nuts, high export taxes, the exchange of cashew nuts for low quality rice, disrespecting parity in trading and poor monitoring.

[Macauhub/GW 07/01/15]

NigeriaNEPC To Train Farmers In Shea Butter ProductionThe Nigerian Export Promotion Council [NEPC] will train 600 farmers in quality Shea butter production to enhance its export value. The council is also trying to increase the quality of exported products and has seen positive growth in exports to the United Kingdom, USA, and other European countries.

[This Day 01/01/15]

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COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

Cameroon10-Processing Units In Development Ten cassava processing units are in development in the Northwest of Cameroon. In all 2-million high-yielding cuttings are to be planted over 300ha. The move will create added value and guarantee revenues from production. The move is financed by the African Development Bank [AfDB] Bank with a budget of 19 billion Cfa francs.

[Ecofin 23/01/15]

KenyaCassava Plant For Teso SouthEast African Agricultural Productivity Project [EAAPP] plans to construct a cassava processing plant in Simba Chai area of Teso South sub-county. The facility which will cost Sh10 million is expected to serve 15,000 farmers in Busia and neighbouring Bungoma and Siaya counties. The ground breaking will be held next month.

[Standard Digital 02/01/15]

Cassava Virus AlertThe cassava brown streak disease [CBD] has affected more than 50% of the Kenyan cassava crop according to the Food and Agriculture Organisation. Several African countries have been affected by the fast-spreading cassava mosaic virus. West African countries have managed to contain the disease, which has ravished hundreds of acres in other parts of the continent.

[The Star 05/01/15]

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COMMODITY NEWSCASSAVA

General

ICE To Launch Euro Cocoa Contract Intercontinental Exchange [ICE] has announced the launch of a new euro-denominated cocoa contract ahead of rival CME Group’s entry into the market. The new contract adds to ICE’s existing contracts - the dollar-denominated cocoa contract traded in New York, and a London contract traded in pounds. It comes as CME is preparing to enter cocoa trading with a contract in Europe. The New York market is favoured by hedge funds and other financial investors while the London contract has been used by physical traders to hedge their positions as they trade their cocoa from west Africa to importing countries.

The ICE launch, scheduled for April 2015, is seen as a pre-emptive move to head off any movement by cocoa traders to the CME when it launches its new cocoa contract. CME officials said in June last year that it was preparing to launch a Europe-based cocoa contract, although no details have been released. Europe is the largest consumer of chocolate and confectionery, and a euro-denominated cocoa contract may attract hedging from traders and manufacturers looking to hedge their positions. The large processors, such as Cargill, Barry Callebaut and ADM are understood to be supportive of the new contract as it will help reduce currency hedging costs.

The CFA franc, which is the currency of Ivory Coast, the leading cocoa producer, is also pegged to the euro. A euro-based contract will also enable processors operating in euro zone to reduce their foreign exchange risk. But the problem is that Ivory Coast will have sold forward much of its 2015/16 crop by the time the new futures are launched. These forward sales will have largely been hedged in sterling. Traders say the volumes may not support 3-contracts in Europe.

[Trading Exchange 06/01/15]

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COMMODITY NEWSCOCOA

Lindt Predicts Price Decline By H2 2015According to Lindt & Spruengli AG cocoa prices will decline by H2 2015 noting the harvest outlook is good. Lindt notes consumption will not rise as fast as some expect. Although demand in China and India is coming the countries have such small consumption that it will not have an influence yet. Lindt is expecting a growth rate of 6-% this year, excluding its acquisition of Russell Stover Candies Inc. The world’s largest producer of premium chocolate reported a surge in full-year sales after Russell Stover gave it access to more U.S. consumers. The stock rose to an all-time high. The Kilchberg, Switzerland-based chocolatier spends millions of francs every year to support 20,000 farmers in Ghana with training, equipment and education with the goal of doubling productivity. With these programs, production will substantially increase in the near-term.

[Swiss Info 13/01/15]

Europe Grind 2.8% Lower In Q4 On Sluggish EconomyCocoa processing in Europe, the biggest consuming region, dropped 2.8% in Q4 as a sluggish economy weighed on demand. Grindings fell to 338,738 MT in the 3-months ended Dec. 31 from 348,406 MT a year earlier. That follows a 1.1% drop in Q3. The European Central Bank will consider expanding stimulus measures at a meeting later this month in an attempt to revive growth and stave off a deflationary spiral in the euro area. Consumer prices in the region fell in December for the first time in more than 5-years amid a weak economic environment and falling oil prices. While consumption improved in North America, the European economic climate was sluggish. Cocoa for March delivery was about £34/MT more than the May contract in London. An inverted market makes it costly to carry stocks, suggesting factories may be more inclined to limit grindings.

[Bloomberg 13/01/15]

Europe Cocoa Processing At 9-Year Low As Factories MigrateA gauge of chocolate demand in Europe fell in Q4 to the lowest for the period since 2005 as the region’s economy struggles and processing capacity shifts to producing countries. Cocoa grinding fell 7.4% in the 3-months ended Dec. 31 from a year earlier according to the European Cocoa Association. Grindings were 323,061 tons compared with 348,963 tons a year earlier. The World Bank cut its forecast for global growth in 2015, as an improving U.S. economy and low fuel prices failed to offset disappointing results from Europe to China.

While economic woes are weighing on demand, the drop in grindings also reflected the transfer of processing capacity to West Africa and Indonesia, the main cocoa producers. Bean processing generates butter, which accounts for as much as 20% of a chocolate bar’s weight, and powder, used in ice cream, cereals and cookies. The so-called combined ratio, a measure of grinders’ profitability, fell 10% in Europe in Q4 from the same period in 2013. Cocoa grinder Euromar Commodities GmbH said in October it would close its Fehrbellin factory outside of Berlin for 3-weeks over Christmas.

Ivory Coast, the world’s top cocoa producer, is set to become the biggest grinder of the beans this year, surpassing the Netherlands, according to the International Cocoa Organization. Factories there processed just 10,000 tons less than the Netherlands in 2013-14, compared with a gap of almost 180,000 tons in 2010-11, according to ICCO estimates. Grindings in Indonesia, the third-biggest producer, increased by almost 70% from 2010-11 to 2013-14, ICCO data showed, as companies such as Olam International Ltd and Cargill Inc. have set up new plants. Lindt & Spruengli AG [LISP] noted that chocolate consumption would not rise as fast as expected by some, as Asian demand is as yet too small to have an influence on the global outlook. And anticipated that cocoa prices would fall by the H2 2015.

[Bloomberg 15/01/15]

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COMMODITY NEWSCOCOA

Asia Processing Declines 17% As Global Demand ShrinksCocoa processing in Asia dropped in Q4 as slowing global growth and a surge in prices to a 3-year high in September reduced demand for the beans used to make chocolate. The grind, an indication of consumption, declined 17% to 141,396MT from 170,684 tons a year earlier, the Singapore-based Cocoa Association of Asia noted. Full-year grindings fell 3.9% to 614,461 tons from 639,505 tons in 2013. The data are for Malaysia, and members in Singapore and Indonesia. Grinding also declined in Europe, North America and Brazil, separate industry reports showed this month. Slowing global economies are crimping demand as consumers look for ways to cut disposable spending after chocolate costs increased.

Cocoa futures touched a 3-year high in September amid concern that the deadly Ebola disease would disrupt shipments from West Africa, which produces 70% of global supply. Prices have since fallen 19% as exports continued to flow from Ivory Coast and Ghana, the top growers. The demand for chocolate is down because prices are quite high. Futures surged 38% in the previous 3-years as Asian consumers led global demand growth, eroding inventories. The gains prompted chocolate makers including Hershey Co. to boost prices in 2014 to cover ingredient costs. Prices are likely to fall to US$2,650 by the end of the year. Meanwhile cocoa butter has surged 38% since the end of 2010. The higher prices may prompt some confection makers to use more substitutes, including alternative fats.

[Bloomberg 23/01/15]

Harmattan Winds Hit West African OutputThe worst Harmattan winds to hit Africa’s top cocoa producers in several years may lower light-crop output, farmers, exporters and analysts said, dimming hopes that they can make up ground after a slow start to the season. The dry seasonal winds began to blow down from the Sahara last month, blanketing much of West Africa’s cocoa-growing regions. The impact was visible in the world’s top 2-producers, Ivory Coast and Ghana, but farmers in Nigeria and Cameroon said their light crop - which typically produces smaller, lower-quality beans - had not been affected.

Ivorian farmers said the Harmattan had hindered development of the April-to-September mid-crop. Cocoa arrivals at Ivorian ports were around 11% lower than last season’s bumper crop. Some exporters thought the Harmattan might simply reduce bean size. Others, however, predicted output losses. The 2014/15 forecast was an overall decrease in the harvest size in Ivory Coast of 15-20%, but with the Harmattan that drop will be bigger. In Ghana, where cocoa purchases were down nearly 23% by December 25 according to industry regulator Cocobod, farmers and buyers said the Harmattan could trim output by 20,000-50,000 tonnes. Cocobod will conduct a field assessment of the Harmattan’s impact in February, before deciding whether to revise the Ghanaian production target of 850,000 tonnes of beans. The Cocoa Association of Nigeria said the winds were not expected to impact output in Africa’s No 3 producer. In Cameroon, farmers said trees had so far resisted the harsh conditions.

[Business Recorder 20/01/15]

Noble Group Winding Down Cocoa OperationsCommodities trading house Noble Group is rumoured to be winding down its cocoa operations allowing its joint venture [JV] with China’s COFCO to focus on larger agricultural markets such as grains. The Hong Kong-based commodities trader is expected to have liquidated its cocoa trading book by June at the latest. Noble declined to comment. Noble has reportedly struck a deal to offload some of its cocoa pod counting and sustainability operations to cocoa trader and processor Transmar Group, and the U.S.-based company would also help wind down Noble’s trading book.

The planned exit from cocoa is the first major change since Chinese state-grains trader COFCO paid US$1.5 billion for a 51% stake in Noble’s loss-making agricultural division in April last year. The joint venture links COFCO’s grain and oilseed processing and distribution business in China with Noble’s grain sourcing and trading arms. The joint venture also included sugar, coffee and cotton as well as the cocoa operations. Noble’s cocoa business included exporting operations in the world’s top 2-growers Ivory Coast and Ghana. The move follows the departure of Paul Davis, a veteran cocoa trader, who resigned as global head of cocoa in October 2014.

[Reuters 19/01/15]

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CameroonBean Exports Rise 9.5% Yr/Yr By End DecemberCameroon exported 115,951MT of cocoa beans in the season to end-December or 9.5% higher compared with the same period last year, according to statistics from the National Cocoa and Coffee Board [NCCB]. Africa’s 4th biggest cocoa producer shipped 42,668 MT in the month of December compared with 29,198 MT the previous month. Cameroon had exported 25,848 MT in December 2013. Output hit a record of 240,000 MT in the 2010/11 season but has been slipping steadily due to a prolonged dry season and attacks by pests and black pod diseases. Output fell sharply to 209,905 MT in 2013/14.

[Reuters 22/01/15]

Cocoa Bean Prices RiseCocoa prices have exponentially increased in recent weeks in Cameroon, with the kilogram rising from 1,000 CFA francs to 1,250 CFA francs, an increase of 25% compared to the prices at the end the year. According to the National Cocoa and Coffee Board [ONCC], the general situation is improving in production areas in January 2015 compared to prices in effect until December 2014. The price increase of beans is due to better accessibility to production areas as access roads have been upgraded. This has led to competition among buyers. Also the quality of the beans has improved since the beginning of the campaign in August 2014 thanks to a national awareness campaign on better maintenance of the cocoa pods during drying as well as fermentation.

[Star Africa 19/01/15]

Côte d’IvoireStricter Controls Cause Bottleneck In PortsStricter government controls at Ivory Coast ports have doubled the time needed to clear cocoa beans and products for shipping, finished cocoa products have piled up in warehouses in Abidjan and San Pedro. Exporters have noted all the export warehouses at the ports are full of cocoa with around 100,000 tonnes in San Pedro alone and the cocoa is continuing to arrive. While cocoa shipments are going out daily, companies have been unable to clear a backlog created when authorities introduced tighter controls at the start of the season in October.

In previous seasons, cocoa delivered from plantations typically waited at port warehouses between 5-7 days for inspections and paperwork. That wait has now increased to between 10-15 days. Exporters blame measures put in place this season to combat fraud by transit companies, which are meant to pay taxes and customs fees on behalf of exporters but, according to authorities, often fail to do so.

Exporters said officials in the ports now wait for cheques to clear before issuing shipment certificates. A number of exporters noted delays have disrupted their shipping cycles, causing them to miss loading windows for vessels and forcing them to pay penalties. Warehousing costs are also accumulating.

[Reuters 21/01/15]

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COMMODITY NEWSCOCOA

Puratos Inaugurates PlantPuratos has inaugurated a cocoa collection and fermentation plant in San Pedro created in partnership with French chocolate maker Cémoi. The official opening ceremony took place on the site near Adjamené. The move is in line with CEMOI’s sustainability vision to promote a traceable, cocoa.

[Perishable News 02/01/15]

Arrivals At 1,045,000T By Jan. 25Cocoa arrivals reached 1,045,000T by Jan. 25 since the start of the season on Oct. 1, down from 1,067,000T in the same period of the previous season. Exporters estimated around 50,000T of beans were delivered to Abidjan and San Pedro between Jan. 19 and 25, up from 32,000T during the same period last year.

[Reuters 26/01/15]

GhanaCocoa Board To Cut Crop Forecast On Dry WindsGhana is expecting an output of 820,000MT of cocoa this season as the hot, dry Harmattan winds reduce the potential crop by as much as 9% from assessments made in November. As recently as October the Ghana Cocoa Board [GBC] said the crop in the season that will end on Sept. 30 would exceed 1 million tons. The main crop season, which lasts from October to May, will see 780,000MT being reaped while the so-called light crop, harvested between June and August, will yield 40,000MT. So far this season purchases from farmers by the board are about 10% lower than last year. The country reaped about 920,000MT last season. In addition to cutting rainfall the Harmattan can cause cocoa trees to lose many of the flowers that turn into pods. Last month central and northern areas of Ghana got as little as 10% of normal rainfall for this time of year, while Nigeria saw 20-30% of its average.

[Bloomberg 07/01/15]

Touton Sets Up Cocoa Processing FactoryCocoa Touton Processing Company Limited [CTPC], a subsidiary of Touton S.A. of France has signed a bean supply agreement with Ghana Cocoa Board [COCOBOD] to process cocoa beans locally. The CTPC, which is located in the free zones enclave is expected to commence operations in April, 2015 with an initial capacity of 25,000T, and eventually expand to about 50,000T over the next 3-years. In addition, CTPC is embarking on a programme dubbed Reducing Emissions from Deforestation and Forest Degradation [REDD+] which aims to protect the forest in the Western Region of Ghana and increase sustainable certified cocoa production.

[Ghanaweb 26/01/15]

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NigeriaProcessors Groan Under Huge DebtsNigeria’s Cocoa processor companies are paying the price for their un-serviced loans and high input costs, with cost eroding sales. Many of them are burdened with un-serviced debts estimated collectively at about N40 billion [US$241 million] according to the Cocoa Processors Association of Nigeria [COPAN]. This may also prevent new credit lines from banks. Analysts agree the huge costs and debt in the capital structure of these companies is crimping their operations. Meanwhile, the costs of exporting products to Europe have gone up by 30%. Industry players say this culminated in loss of direct revenue to the local processing industry.

[Business Day 12/01/15]

Mid-Crop Cocoa Threatened By Prolonged Dry WindsThe Cocoa Farmers Association of Nigeria has noted mid-crop cocoa output is threatened by the Harmattan that have evaporated moisture and caused buds to break off trees. The winds have persisted for 1-month unbroken by rainfall, increasing the adverse effects on cocoa trees with an average of 6 buds rather than the usual 12-15 buds. The last rains in the southwest belt that accounts for about 70% of Nigeria’s production were recorded in November. For the surviving trees, the quality of yield declines, resulting in cocoa pods with underweight beans. Nigeria has set a target to produce at least 500,000T of cocoa by the end of the season running through September 2015. Nigeria produced 350,000T of cocoa in the 2013-2014 season.

[Bloomberg 16/01/15]

TogoTogo To Resume Cocoa And Coffee ProductionIn a move to renew plantations and increase cocoa production to 25,000MT/pa and coffee to 20,000MT within 3-years the Togolese Minister of Agriculture, Colonel Ouro-Koura Agadaz, formally handed over 70,000 cocoa pods and 445,000 coffee cuttings to local producers. The Agriculture Sector Support Project [PASA] is one of the components of the 5-year National Program for Investment in Agriculture and Food Security [PNIASA]. The move will also strengthen the economy and generate funds to producers. In 2014, only 15,000 cocoa pods were distributed to farmers. Ghana has helped the state by providing 50,000 pods. Since 2010, Togolese cocoa production is between 11,000-13,000T/pa. Togo is the 8th producer in the world and cocoa is the 3rd export product after phosphate and cotton.

[Med Africa 12/01/15]

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COMMODITY NEWSCOCOA

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)

2 Jan 15 2051.17 2971.75 1963.33 2930.67

5 Jan 15 2073.98 2973.07 1984.33 2927.67

6 Jan 15 2047.16 2933.67 1970.00 2882.00

7 Jan 15 2061.63 2946.87 1988.67 2900.00

8 Jan 15 2107.24 3005.38 2018.00 2965.00

9 Jan 15 2091.46 2989.09 2009.00 2938.67

12 Jan 15 2116.72 3024.03 2026.67 2980.00

13 Jan 15 2112.49 3018.58 2023.00 2973.33

14 Jan 15 2117.62 3026.85 2023.33 2976.00

15 Jan 15 2108.43 3009.87 2020.00 2962.67

16 Jan 15 2096.70 2982.59 2007.33 2931.00

19 Jan 15 2095.50 2980.89 2010.33 2923.67

20 Jan 15 2090.75 2968.84 1996.00 2916.33

21 Jan 15 2045.95 2906.19 1965.33 2844.33

22 Jan 15 2010.16 2860.76 1944.33 2799.67

23 Jan 15 2012.30 2819.72 1921.00 2759.00

26 Jan 15 1996.21 2802.32 1903.67 2737.33

27 Jan 15 2000.16 2813.83 1897.67 2747.67

28 Jan 15 1974.14 2787.03 1885.00 2718.00

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CameroonRobusta Exports At 698T In DecemberNational Cocoa and Coffee Board [NCCB] statistics show Cameroon exported 698T of robusta coffee in December, the first month of the 2014/15 season, a sharp increase from 236T in the same month of the previous season. There were 6-exporters for the month. Nealiko Enterprises exported the most with 284T, followed by Nestle Cameroun [180T] and Polis Agro Cam [27T]. No arabica coffee was exported from the country during the month. Cameroon’s total exports since the start of the 2014/15 season, which started prior to the robusta season on Oct. 1, remain at 249T. Cameroon is one of the few countries in Africa that grows both robusta and arabica coffee. The robusta coffee season runs from Dec. 1 to Nov. 30 and the arabica coffee season runs from Oct. 1 to Sept. 30. The country exported 19,704Tof robusta coffee in the 2013/14 season, up from 14,725T in the previous season, and 2,175T of arabica coffee in 2013/14, a slight drop from 2,522T in 2012/13.

[Reuters 23/01/15]

13

COMMODITY NEWSCOFFEE

Kenya Earnings Jump 17% In 2013/14 Crop YearKenya’s earnings from exports of its coffee rose 17% to US$254.2 million during the 2013/14 [Oct-Sept] crop season due to improved production and higher prices. The nation is a relatively small coffee grower compared with other producers, but its speciality beans are known for their quality, attracting demand from roasters. Kenya’s Coffee Directorate said farmers benefited from subsidised fertiliser from the government during the period, helping them to raise production by 25% to 49,475 MT. Kenyan growers also benefited from better prices after the average auction price of the commodity increased to US$212.7/50-kg bag in 2013/14 from US$166.7 a year earlier.

Uncertainty about the crop in leading producer Brazil after a long drought helped prop up global prices of coffee in 2014. Brazil grows about 40% of the world’s arabica beans. Kenya secured 4-new export markets for its coffee in the 2013/14 season. Besides traditional European and USA markets, other non-traditional markets expanded to Turkey, Bulgaria, Seychelles and Zambia with Zambia mainly absorbing roasted coffee. Kenya is expected to produce 45,000 MT of coffee in 2014/15, fetching US$150 million from an estimated average price of US$200 per bag.

[Reuters 08/01/15]

Boosting Exports With Branding InitiativeKenya has launched a coffee branding initiative designed to boost the country’s reputation for producing high-quality beans and help the industry regain its position as a top foreign exchange earner. Under a scheme set out by the government, bulk coffee sold to roasters will be branded “Coffee Kenya Mark of Origin” by producers and traders, with the Kenya Coffee Directorate policing the system and ensuring the beans are from the country. The government wants to add value to exports through initiatives such as branding, widening the appeal of Kenyan coffee with consumers and following similar schemes used by other producers.

Coffee exports, worth US$254 million in the 2013/14 season which runs October to September, are Kenya’s 4th-biggest foreign exchange earner after tourism, tea and horticulture. In the 1980s, the sector was the leading earner accounting for 40% of foreign exchange. But output plummeted as farmers said political corruption meant they were not paid and many switched crops or sold fields for real estate development. Output was 49,475T in 2013/14, down from a peak of 130,000T in 1988/89, although Kenya’s high-grade beans are still appreciated by roasters who often blend them with lower-quality beans from other growers.

[Africa Report 14/01/15]

Government Raises Concern Over Coffee IndustryThe government has expressed concerns that the country may lose their privileged position in the world’s coffee market because production levels are predicted to drop. Currently, Kenya is producing in the region of 50,000MT per year – a sharp decline from the nation’s peak of 130,000 tonnes which was achieved in the late 1980s accounting for about 40% of Kenya’s export revenue.

Climatic challenges are seen as one of the main reasons for this drop, but, worryingly, so is amount of prime coffee growing land that has been lost to other industries. According to the Agriculture Fisheries and Food Authority, the past decade has seen the coffee industry lose 60,000 ha of arable land. For example Kiambu, Murang’a and Nyeri regions are under threat by advancing new-build construction projects, while elsewhere in the country plots are being transformed into grazing fields for livestock. But with exports slipping and the government sounding warnings, national decision makers are launching programmes in order to boost the sector. During the 2013-14 season farmers were able to harvest some 825,000 bags of coffee, weighing in at just over 49,000 MT, which brought in some KSh 19 billion.

[Coffee Press 19/01/15]

14

TanzaniaArabica Prices Rise As Auctions ResumeAverage arabica prices in Tanzania, Africa’s 4th-biggest coffee producer, edged higher at the first auction of the year, buoyed by strong demand from exporters. The Tanzania Coffee Board [TCB] noted the average price for top grade arabica coffee was US$192.01 per bag up from US$185.29 previously. Overall average prices at the Moshi exchange were up by US$7.92/50 kg for mild arabica compared to the last auction. The TCB said 12,127 bags were offered at the latest sale compared with 17,046 bags offered at the last auction in December. The regulator resumed the weekly auctions last week after suspending trading on Dec. 18 for the Christmas and New Year holidays. The next auction will be held on Jan. 29.

[Reuters 20/01/15]

Grade Amount Sold Low High Average

Arabica AA 3,782 3,782 165.00 229.60 192.01

Arabica A 1,911 1,900 165.00 190.00 185.19

Arabica AB 1,703 1,703 171.80 207.00 194.45

Arabica B 1,806 1,633 165.20 190.00 183.67

Arabica PB 1,289 1,165 158.80 198.80 186.99

Arabica C 805 768 155.00 186.00 186.00

Robusta Organic 309 309 97.80 98.00 98.00

Robusta Screen 18 233 233 104.20 104.20 104.20

Robusta Superior 21 21 95.00 95.00 95.00

Robusta FAQ 43 43 83.60 83.60 83.60

Kagera Needs 67 Million Coffee Plants To Boost ProductionKagera Region needs to plant about 67 million new Arabica coffee plants in place of the current poorly cultivated ones for farmers to gain good yields. The Maruku Agricultural Research Institute [ARI] has set aside about 100,000 new coffee stems to facilitate the move, that are waiting to be collected by farmers ready for the farming season between March and April. Poor extension services coupled with outdated application of techniques are some of the reasons behind the current trend and this appears to demoralize farmers from improving the crop. Current coffee production stands at 20,000-30,000 tonnes a year.

[Daily News 23/01/15]

15

COMMODITY NEWSCOFFEE

UgandaExports Down 13% Yr/Yr In DecemberUganda’s coffee exports fell 13% to 224,803 60-kg bags in December compared with the same month a year ago according to Uganda Coffee Development Authority [UCDA]. No reason was given for the fall but an industry source said rains in parts of the central region disrupted harvesting and transportation from rural areas. UCDA forecast Uganda would export 230,000 bags this month from 391,514 bags in same period last year, without elaborating on the reasons for the decline.

[Reuters 22/01/15]

16

Burkina Faso2014/15 Cotton Harvest Seen Just Under 700,000TBurkina Faso expects a cotton harvest of just under 700,000T during the 2014/15 season, up from the last year’s 650,000T but revised down from an initial target. The figure is about 100,000T below a target set last year for the 2014/15 harvest due to poor rains at the beginning of the season. SOFITEX, the country’s biggest cotton firm, will account for around 80% of the harvest, producing 540,000T. SOCOMA and Faso Coton will produce 90,000T and 50,000T respectively. Cotton is the second-biggest source of revenue after gold.

[Reuters 27/01/15]

2014/2015 Marketing Year Sees Production At 540,000T Cotton production in the 2014/2015 marketing year is expected to reach 540,000T according to the Society Of Fibres and Textiles [SOFITEX], the main ginning company, representing an increase of 6.2% over the previous year.

[Ecofin 21/01/15]

KenyaMeasures Introduced To Increase Output To 140,000 BalesThey Government is currently putting in place measure to increase production in order to meet local demand which stands at 140,000 bales. One key challenge is the lack of access to certified seed. The Kenya Agriculture and Livestock Research Organization is to begin breeding high yielding varieties to increase output. Kenya’s average yield is 572kg/ha against an international average of 800kg/ha. The government is also promoting irrigation schemes. Production stood at 30,000 bales in 2014 an increase from 22,000 bales in 2013 a year impacted by drought.

[Yarns & Fibres 17/01/15]

Kenya To Establish Leather City To Spur IndustrializationThe Kenyan government has announced plans to establish a Leather City, a fully-fledged product development facility in Athi River, a town outside capital Nairobi, that will be the first of its kind in the region. The industrial park will be set on 500 acres of land which the government is optimistic could generate 10 times the current value of exported raw leather to about US$1.09 billion in 18 months.

The move is in line with government policies to move the country from an exporter of raw and semi-processed hides and skins to finished leather goods. The City will feature an effluent treatment plant that is a critical enabler in the tanning of hides and skins, as well as carefully master-planned integrated leather and leather goods production facilities. The project will be fully funded by the private sector. The ground-breaking is slated for February.

In the past Kenya established measures to prop up the leather industry, such as increasing export duty on raw hides and skins as well as budget allocations for development of tanneries in rural areas. The park will house tanneries, a training center, common manufacturing facilities, chemical storage and distribution units, leather goods’ accessories production units and a Common Effluent Treatment Plant [ETP]. The initial phase will target at least 15 tanneries, each with a production capacity of 10 tonnes of raw hides and skins per day and at least 10,000 pairs per day each of shoes, hand bags, leather garments and industrial gloves.

[Coastweek 20/01/15]

17

COMMODITY NEWSCOTTON, TEXTILES & LEATHER GOODS

MaliTargets 800,000T Per Year By 2018 As Output JumpsMali plans to produce 800,000T of unginned cotton per year by 2018 after output surged by more than 25% in the 2014/15 season on the back of improved farm inputs. According to state-owned textile development firm CMDT final production figures for the season stood at 552,000T, compared with 440,000T the previous season. The government increased input subsidies and lowered the price of fertilizers. Mali, Africa’s 3rd biggest gold producer behind South Africa and Ghana, also counts cotton as one of its main exports. Mali is expecting to produce 650,000T in the 2015-2016 season, 725,000T in 2016-2017, and 800,000T in 2017-2018, according to CMDT’s 5-year development plan. Mali plans to invest between 60-70 billion CFA francs [US$122 million] per year to achieve its targets. The measures include lower farm input prices, improving soil fertility, motivating farmers with favourable farmgate prices and immediate cash payments after harvest.

[Mail Online 22/0/1/15]

MozambiqueNiassa Company Sells US$8 Million In CottonSociedade Algodoeira de Niassa [SAN] the only cotton company in Mozambique’s Niassa province, in 2014 posted turnover of US$8 million in the last cotton campaign from the sale of 5,600 tons of raw cotton and 7,000 tons of seeds. Last year cotton campaign exceeded production targets of 12,000T compared to actual production of 15,000T. The raw cotton was purchased by customers based in China, India and Bangladesh. SAN’s entire cottonseed production was bought by a single company based in Malawi.

[Macauhub/MZ 13/01/15]

NigeriaCotton Fetches Lower Price In Global MarketCotton from Nigeria is sold at lower prices in the international market, compared to the price of cotton from Burkina Faso, China, and India is it does not produce Biotechnology [BT] cotton. This is due to the non-passage of the bio-safety bill which would allow cotton producers to purchase and cultivate BT cotton in Nigeria.

Speaking at a Cotton Value Chain stakeholders’ forum held in Abuja last month, Hamma Ali Kwajaffa, president of the National Cotton Association of Nigeria [NACOTAN], said BT cotton which is significantly cheaper to produce, commands higher prices in the global market. The use of BT cotton would increase the quality and quantity of cotton output in Nigeria, reduce the spraying of insecticides, and thereby, reduce cost of production. Nigerian farmers get less than 1T/ha against BT cotton that provides 4T/ha. Nigeria’s cotton is currently discounted in the international market and sold for an equivalent of N80,000/T, whereas BT cotton is sold for N200,000-300,000/T.

[Fibre2 Fashion 07/01/15]

18

Sao Tome & Principe

European Parliament Approves Fisheries Agreement Members of the European Parliament signed a new fisheries agreement between the European Union and Sao Tome and Principe, authorising 34 vessels from Spain, France and Portugal to fish in the country’s waters. The new partnership agreement protocol provides fishing opportunities for 28-tuna seiners and 6-fishing vessels for surface trolling. The protocol aims to promote a policy of sustainable fisheries, providing for a financial contribution of over €2.8 million for 4-years.

[Macauhub/ST 14/01/15]

19

COMMODITY NEWSFISH

BeninImport Embargo On Poultry From NigeriaThe Ministry of Agriculture announced a ban on the import, distribution and transit of all poultry and products from Nigeria to protect the country of bird flu currently plagued by Nigeria. But many analysts are questioning the ability of Benin to enforce this ban, given the porosity of borders between the 2-countries. Nigeria announced a few days ago the appearance of the H5 virus indicating that 5-states were affected by the disease.

[Ecofin 24/01/15]

EthiopiaHeineken Inaugurates Largest Brewery In The CountryHeineken has recently launched a €110 million plant in Kilonto, Ethiopia with a production capacity of 1.5 million hectolitres making it the largest brewery in the country. The plant will produce Barnard and Harar brands along with a new brand Walia. The facility will allow the company to better position itself in the local market more than doubling capacity.

[Ecofin 19/01/15]

GambiaGovernment To Licence Dealers In Basic Food CommoditiesThe Gambia government is to introduce a new measure that will licence or authorise importers, distributors as well as major and minor retailers of essential food commodities in the country. The measure is expected to kick-in next month. The move is meant to ensure a fairer and honest pricing of essential food commodities in the country. All importers, distributors or retailers will need a licence from the Ministry.

[Daily Observer 14/01/15]

MadagascarChezda Cyclone Destroys 25% Of Rice ProductionThe passage of typhoon Chedza across Madagascar has affected rice production by at least 25%. Fortunately stocks made through the production of the previous year will fill the gap. Madagascar is expected to achieve a good level of rice in this campaign but is now expected to rely on some grain imports.

[Ecofin 23/01/15]

MoroccoTo Export 100,000T Less Citrus Fruits Than Projected The citrus sub-sector In Morocco is experiencing problems with weather and disease. Exports are expected to fall below 500,000T at the end of the current campaign, a decrease of 100,000T over initial estimates. Projections were made at 600,000T. Moreover, the Russian market which traditionally buys 60% of the production will absorb less citrus this year due to current difficulties in the Ruble. In January, the Kingdom exported 217,000T of citrus fruits, against 300,000T a year earlier. Russia remains top with 94,000T followed by the Union European [47,000T], USA [35,000T] and Canada [25,000T].

[Ecofin 20/01/15]

20

COMMODITY NEWSFOODSTUFFS & BEVERAGES

SenegalOnion Sector Self-Sufficient By 2016The Senegalese onion sector wants to achieve self-sufficiency by 2016. The goal is to produce at least 350,000T within 2-years. A development plan has seen production from 90,000T in 2001 to 290,000T in 2014. Senegal expects a record campaign in 2015 with a harvest of 400,000T. Producers have asked the Government to ban imports of the bulb this year.

[Ecofin 23/01/15]

21

COMMODITY NEWSFOODSTUFFS & BEVERAGES

GeneralEuropean Commission Clears Sime Darby To Buy New Britain Palm OilThe European Commission cleared the acquisition of New Britain Palm Oil Ltd by Malaysia’s Sime Darby Plantation Sdn Bhd, saying the deal doesn’t give it concerns about competition. Both companies are active in the plantation, production and processing of palm oil.

[Alliance News 27/01/15]

Palm Trader Delivers On Sustainability PledgeWilmar International, the biggest palm oil trader in the world, has set up a website that reveals its supply chain and allows anyone to report violations of its recent sustainability pledge. It is also working closely with The Forest Trust, a third party that monitors corporations and helps them deliver on sustainability promises. The vast majority of palm oil traders have said that they will no longer buy from those who exploit forests.

[Grist 22/01/15]

CameroonTo Boost Palm-Oil Production 26% In 3-YearsCameroon, Africa’s third-biggest palm-oil producer, plans to start using higher-yielding seeds to help raise production by 26% over the next 3-years. The new seeds will be planted over an additional 30,000 ha and are expected to boost production to 290,000 MT/pa compared with 230,000 tons now. About 10,000ha of additional plantations will be planted each year. The seeds will be produced by the Institute of Agricultural Research for Development [IRAD]and distributed for free to farmers. An agreement between the Ministry of Agriculture and Rural Development, MINADER and IRAD was signed on 16/01/15. MINADER will disburse FCFA 495 million to help IRAD revamp its structures and produce palm oil seeds. Cameroon’s demand for palm oil, used in products from noodles to biofuels, is estimated at 325,000MT. It presently has 160,000 ha of palm-oil plantations. By 2020 government will limit the importation of oil palm.

[Bloomberg 19/01/15]

LiberiaEquatorial Palm Oil Secures Development LoanEquatorial Palm Oil PLC has secured a US$20.5 million loan for its 50/50 joint venture company Liberian Palm Developments Ltd. The AIM-listed palm oil development and production company with operations in Liberia, noted the loan agreement is with KLK Agro Plantations Pte Ltd, a subsidiary of Kuala Lumpur Kepong Berhad. KL Kepong holds a 62.86% stake in Equatorial Palm Oil and also holds the remaining 50% interest in the joint venture firm Liberian Palm Developments. The loan has a term of 5-years, and Equatorial Palm Oil said it will be used to develop its oil palm estates in Liberia.

[Alliance News 27/01/15]

22

COMMODITY NEWSPALM OIL & EDIBLE OILS

NigeriaDufil’s Backward Integration In Palm Oil Sector In its effort to boost the local production of Palm Oil, Dufil Prima Foods Plc has acquired and signed a Memorandum of Understanding [MoU] with the Edo State government for 60,000 ha for cultivation of palm to boost local production. Dufil has embarked on strategic backward integration to ensure 100 per cent local content in most of the products being produced by the company. This has led to investments worth billions of naira in the Nigerian economy in the last 10 years. These include the establishment of a seasoning plant, the establishment of flour mills, the establishment of oil refinery and the establishment of a palm tree plantation under the Edo State Government Agribusiness revolution scheme.

Nigeria’s palm oil production is estimated at 55% of African output making it the largest producer of palm oil in Africa. However Nigeria has lost its dominant position in the international trade after 1980s and is currently the 5th largest producer, behind Indonesia [51%] and Malaysia [34%] in 2013/14. Its output represented only 1.57% of the world production in 2013/14.

Due to the constant shortage of palm oil for both domestic consumption and industrial usage, major companies like Dufil and PZ Wilmar are investing heavily in the cultivation of palm tree plantations that will revolutionize the palm oil industry in Nigeria. A combination of the above will help the Government transformation agenda to achieve its 300,000 ha for agribusiness in palm oil sector.

[This Day 18/01/15]

23

COMMODITY NEWSPALM OIL & EDIBLE OILS

Côte d’IvoireExceeds 2014 Rubber ForecastAccording to the Association des Professionnels et Manufacturiers de Caoutchouc [APROMAC], Ivory Coast’s natural rubber output for 2014 reached 311,429T exceeding a forecast of 296,456T. But lower prices for farmers and harsh Harmattan winds could dent 2015 output. Ivory Coast, the world’s top cocoa grower, is also Africa’s leading natural rubber exporter. It produced 293,293T of rubber in 2013 due to new plantations that entered production APROMAC expects output of 326,101T in 2015.

While Asian producers including Indonesia, Thailand and Malaysia dominate world output, Ivorian farmers, frustrated by cocoa’s low returns, have increasingly turned to rubber in recent years for the more stable income it provides. The farmgate price for rubber in Ivory Coast peaked at 942 CFA francs/kg [US$1.68] in 2011. But a drop in world natural rubber prices, which tend to mirror oil prices, has since cooled farmer interest. Meanwhile, a successful reform of the country’s cocoa sector has led to a progressive rise in prices paid to farmers over the past 3-seasons.

The Ivorian rubber farmgate price was at 386 CFA francs in January 2014 but fell to 281 CFA francs in December. [Reuters 15/01/15]

24

COMMODITY NEWSRUBBER

AngolaBioenergy Company Produces 3,100 Tons Of SugarCompanhia de Bioenergia de Angola [Biocom] produced 3,100T of sugar and 3,500 cu.m of ethanol in its experimental phase. The project will be formally opened in Q1 2015, when it will and start producing 256,000T of sugar, 28,000 cu.m of ethanol and 235 MW of electricity from sugar cane bagasse. Located in the Capanda Cacuso Agro-Industrial Hub, Biocom is a partnership between the Angolan State, through the National Agency for Private Investment [ANIP] and Sonangol Holding, with 20%, and the Angolan group Damer and Brazil’s Odebrecht with 40% each.

[Macauhub/AO/BR 01/01/15]

KenyaImport Safeguards Come To An EndKenya’s sugar industry is under threat as the final extension of sugar import safeguards comes to an end. Kenya has exhausted the reprieve limit set by Common Market for Eastern and Southern Africa [COMESA] which gives a market access at zero-rate tariff to goods from member states. The sugar directorate officials have begun to lobby COMESA for another extension despite exceeding the maximum allowable safeguard duration of 10 years. Kenya received a 1-year extension to delay duty-free sugar imports from COMESA member states till the end of February 2015, after failing to guide the sector towards competitiveness through privatisation and establishment of cane estates. Kenya plans to complete reforms in its sugar industry. However, state-owned sugar companies - Chemelil Sugar Company, Nzoia Sugar Company Ltd, South Nyanza Sugar Company Ltd, Muhoroni Sugar Company Ltd and Miwani Sugar Company - are yet to be privatised.

Kenya wants to privatise all its sugar mills, infrastructure development and diversifying the millers into Ethanol distillation and power co-generation before the expiry of the safeguards. The government applied for protection of the sector by way of a safeguard under Article 61 of the COMESA Treaty in 2003 to run till 2008 so that sugar imports from COMESA are subject to customs duties. Since then, the safeguards have been extended. Under the safeguard Kenya is allowed to limit the entry of imported sugar to 350,000MT to meet the annual production deficit. Kenya produces 600,000MT annually but not enough for its market. Potential demand is approximately 800,000MT leaving a net deficit to be filled by imports. It has been importing sugar from COMESA countries as it is allowed to cap sugar imports from the 19 countries.

[CNBC 06/01/15]

25

COMMODITY NEWSSUGAR

Raw Sugar Production Expected To Rebound In 2015Kenya’s raw sugar production is expected to rise 4% to 617,039MT in 2015, buoyed by extra factory capacity and improved supply of cane. Kenya has an annual sugar deficit of around 200,000MT, which is usually filled by imports from other producers in the region. The country is struggling to improve output due to relatively high production costs and loss-making sugar factories. The Kenya Sugar Directorate said Kenya produced 591,658MT of sugar in 2014, a 1.4% drop from a record harvest of 600,179MT in 2013 attributed to closure of the mills and cane under-supply in Mumias zone.

Mumias sugar factory in western Kenya was closed for a period to allow its cane to mature and for maintenance. There was also an unscheduled closure of Kibos sugar factory after its boiler broke down, as well as a scheduled shutdown of West Kenya sugar Company for maintenance. A fourth miller, Soin Sugar Company was also shut for the entire second-half of 2014 to allow for ongoing factory modernisation. Kenya has long had plans to privatise 5-sugar factories to reduce inefficiency. Privatisation of the public owned mills is in progress and will provide a platform for the injection of much needed fresh capital to facilitate modernization, expansion, value addition and diversification. The cost of producing a tonne of sugar at about US$570 in western Kenya. The cost is US$240 to US$290 in producers such as Egypt.

[Reuters 21/0/11/5]

South AfricaDrought Closes KZN Sugar MillOne of South Africa’s biggest sugar producers, Illovo Sugar, will close its Umzimkulu mill for the year-long 2015 milling season starting in April. Illovo blames significantly below-average rainfall in KwaZulu-Natal during the 2014 milling season and frost during the past winter which severely affected cane supplies for the forthcoming season. There are fears that next year’s crop is also going to be affected, as the planting season has been delayed by the drought. Estimated cane supplies for the 2015/16 season will fall by approximately 1 million tons [18%] compared against average deliveries in a normal season. Deliveries meant for Umzimkulu will be diverted to Illovo’s Sezela mill for processing.

This past season was particularly unfavourable to the sugar sector with a combination of bad weather and a sugar industry strike. Illovo took a further hit when cane production in Swaziland was also affected by weather and another industry strike. Total group sugar production for the period dropped by 9% to 1.3 million tons with the contribution to operating profit derived from sugar production declining from R847 million in 2013 to R692m last year. Meanwhile the KwaZulu-Natal Agricultural Union noted that the drought-stricken KwaZulu-Natal province, where more than 80% of the country’s sugar is grown, has 6-weeks to get sufficient rain for this year’s crop.

[Business Report 19/01/15]

26

SwazilandProduction Expected To Grow 5% Over 3-Years Production in Swaziland is projected to grow at an average annual rate of 5% to a record level exceeding 800,000T by 2018 and 2019 season according to the Swaziland Sugar Association [SSA]. The industry has been implementing measures to improve productivity and efficiencies since the European Union [EU] sugar sector reformed in 2005. The EU has recently allocated €1.8 billion, most of which is targeted at Smallholder Sugarcane Growers [SSGs]. The EU centre for the Development of Enterprise [CDE] also donated €1.2 million which has been spent on Fairtrade Certification for FSSC 2200 certification of one of the mills, reviewing provision of extension services, development of environmental guidelines and building capacity at SSA.

[Swazi Observer 02/01/15]

TanzaniaBulk Sugar Importation Scheme DelayedBulk sugar procurement will not start yet as the country has enough stocks of the product. A technical committee, comprising experts from the ministry and key stakeholders from the sugar sector advised Government that there was enough domestic stocks. The committee will make a further assessment of the situation later this month. The industry is in a crisis over continued supply of cheap and illegal sugar imports that have left millers holding tonnes of the product. The government has not issued a permit for importing domestic sugar in 2-years although the market is flooded with illegally smuggled product.

Local sugar producers say they have 55,585T of sugar as at December 31 from 4-mills - Kilombero Sugar [32,841T], Mtibwa Sugar Estates [84T], TPC Ltd [19,638T] and Kagera Sugar Ltd [3,022T]. The stock is enough to last for 2-months depending on market factors. According to the sugar board, Tanzania imported a total of 41,858T of domestic sugar in 2012/13 year and 182,845.39T in 2011/12. It imported 131,651T of industrial sugar in 2012/13 year and 101,528T in 2011/12.

[Daily News 27/01/15]

27

COMMODITY NEWSSUGAR

Uganda2015 Output At Top Producers Up 11%Uganda’s 3-largest sugar refiners are expected to produce 11.5% more this year, helped by an expanded cane acreage. Uganda consumes about 350,000T of raw sugar a year and the government wants more investment to meet rising demand, which is forecast to double by 2030.

The Uganda Sugar Manufacturers Association [USMA] projects the country’s 3-growers and processors will produce 416,000T of sugar in 2015, up from 373,000T last year. Output at Kinyara Sugar Works and SCOUL, will increase in 2015 as it has land for sugarcane expansion and capacity to still absorb the increased cane supply. Output at Kakira Sugar Works [KSW], the largest of the three, is set to remain stable at about 180,000T.

Production last year was up 25.2% from 2013, boosted by increased processing capacity and higher cane supply from the 3-firms’ plantations and independent farmers. This month, the Ugandan government signed a long delayed agreement with local owners of a large tract of land in northern Uganda where Madhvani Group, owners of KSW, intends to invest US$100 million in a new cane plantation and processing plant.

[Reuters 21/01/15]

ZambiaZambia Sugar Posts Record Sugar ProductionZambia Sugar, a unit of South Africa’s Illovo Sugar, posted record production of 424,024 MT during the milling season which ended in December - the highest-ever tonnage produced by a single sugar factory on the African continent in any given season. This topped its previous production record from 3-years ago of 404,000 MT. Illovo is Africa’s top sugar producer and its Zambian unit accounted for 31% of its operating profit in the 6-months to the end of September last year.

[Engineering News 08/01/15]

ZimbabweTongaat Hulett To Double Cane Production By 2016The Zimbabwean subsidiary of the South African Group Tongaat Hulett plans to double production of sugarcane by next year. Tongaat Hulett Zimbabwe [THZ] expects to harvest about 1.8 million tonnes as it has increased by 1,022 the number of producers under contract to ensure its supply. National demand is experiencing a steady increase from 475,000T in 2014 to 628,000T by 2016. At the end of its 2014fiscal year, the subsidiary recorded a turnover of US$58 million.

[Ecofin 22/01/15]

28

29

COMMODITY NEWSTEA

KenyaFarmers Demand Reduction Of KTDA Management Levy Farmers want the management agency fee that the Kenya Tea Development Agency [KTDA] charges factories reduced. They said the 2.5% charge on net sales is too high and should be reduced to 0.5% as it eats into their returns. The levy is charged on 66 farmer owned tea factories. Meanwhile KTDA noted the levy was previously 7% and was reviewed downwards after farmers complained.

[Star 10/01/15]

Microfinance Institution To Expand Beyond Tea SectorGreenland Fedha Limited [GFL], a microfinance institution for small-scale tea farmers in Kenya, has implemented a new software solution to improve its efficiency and remain competitive in the market. The system has automated its processes and enabled it to develop a mobile payment solution. GFL is wholly owned by the Kenya Tea Development Agency [KTDA] Holdings and provides financial services to the tea sub sector. GFL can get money to farmers regardless of whether they have a bank account or how remote their farms are – by simply paying the money directly into their mobile phones.

[IT News 27/01/15]

Farmers Reject Takeover By CountyFarmers have rejected a plan by the Murang’a government to take over the management of tea. Farmers at Ngere, Njunu and Makomboki factories threatened to uproot their crop and hold demonstrations if the government replaces the Kenya Tea Development Agency [KTDA], noting the county government has no capacity to handle operations currently being carried out by KTDA.

[The Star 12/01/15]

Egypt Will Go On Buying Kenyan TeaEgypt will continue to be the leading importer in Africa of Kenyan tea, its trade Minister told a Kenya-Egypt business forum held in Nairobi. The forum was aimed at strengthening trade relations between the 2-countries which witnessed the formation of a business council that draws 10 representatives from each country to explore trade opportunities.

[Star 15/01/15]

Top Price Of Kenya’s Best Grade Tea Rises At AuctionThe maximum price of the top grade Kenyan tea, Best Broken Pekoe Ones [BP1s], rose at auction this week compared with the previous sale. Africa Tea Brokers noted the following tea prices from the Mombasa auction, in which tea from other producers in the region is also sold:

Tea Grades Prices This Week: $/Kg Prices Last Auction: $/Kg

BP1 Best Broken Pekoe Ones 2.20-3.60 2.40-3.56

PF1 Best Brighter Pekoe Fanning Ones 3.12-3.26 3.02-3.15

PD Pekoes Dusts 2.45-3.44 2.45-3.28

D1 Dusts 2.58-3.31 2.40-3.14

30

GeneralHarvesting Back To Normal After RainsFor a few of the most popular species minor price changes have been reported for early trade in the New Year. In general producers report demand remains steady despite the slight slowing of business for Asian markets ahead of the Chinese New Year celebrations towards in February. Some producers believe demand has peaked and without fresh stimulus it is possible that prices for some of the most sought after species may drift down. This could be accelerated as log harvests are now rising as the worst of the rain season is over.

[ITTO Report 1-15/01/15]

Producers OptimisticLog stocks at Douala Port have now been reduced and all outstanding shipments are expected to be cleared by month end. The Gabon government is reported to be making further changes to the permitted cutting sizes for sawnwood and boules. The market outlook for West and Central African business in Q1 is difficult to forecast but producers are more optimistic for Q2 as construction activity in the EU picks up after the winter lull.

[ITTO Report 1-15/01/15]

Competition For Market Share Toughens As EU Demand WanesThere is growing concern over economic prospects in the EU such that it is very difficult to forecast likely trends in demand even in the short-term. In terms of trade in all products, West Africa is the EU’s most important trading partner in the African, Caribbean and Pacific region. West African countries account for 40% of all trade between the EU and the African, Caribbean and Pacific region with Côte d’Ivoire, Ghana and Nigeria accounting for 80% of all exports to the EU. Demand from Middle East buyers remains firm and prices are stable even in the face of growing efforts on the part of suppliers of European softwoods and temperate hardwoods to capture market share.

The lack of clear direction in the international markets will make it difficult for producers in Cameroon as they consider preparing offers for the annual auction of forest concession areas. At the moment demand and supply is fairly evenly balanced but negative economic news in major markets could tip the balance and create pricing problems. The Chinese market now plays a major role in the timber trade and all eyes on how the Chinese economy will develop.

[ITTO Report 1-15/01/15]

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COMMODITY NEWSTIMBER

CameroonCFAF13.7 Billion Program To Develop IndustryThe Cameroon Government has provided the Programme For Processing Forest Products [PNATPF] with a budget of 13.7 billion Cfa francs.

[Cameroon Web 21/01/15]

Think Tank Publishes Critical ReportThe influential think tank Chatham House published a report examining the extent of illegal logging in Cameroon and its associated trade and response. It found that progress has stalled since 2010, with illegal activity accounting for nearly 33% of all timber felled. The checklist of failures include the proposed reform of the forestry sector’s legislative framework as incomplete, the availability of information on forestry projects as inadequate, transparency and enforcement in the sector is weak and on top of it all corruption remains rampant with little political will around to change this.

[All Africa 23/01/15]

GhanaQ3 Exports Up 21%The Timber Industry Development Division [TIDD] of the Ghana Forestry Commission [FC] has released its Timber Export Report for the first 9-months of 2014. Ghana exported a total of 249,846 cu.m of timber and wood products worth €98.50 million. This represented increases of 21% in volume and 7.8% in value compared to same period in 2013. Products for which increases were recorded included kiln and air dry sawnwood, poles and billets. A large volume of gmelina poles were exported to India.

The major markets for Ghana’s wood product exports in the first three quarters of 2014 were Asia/Far East 44%, Africa 26% with the balance going to Europe. Other markets included the US [5%], Middle East [3%] and Oceania. The Average Unit Price for 2014 exports to the ECOWAS market was in the range of €229-434 per cu.m, up slightly on the €223–392/cu.m in the same period in 2013. Exports to Niger were the lowest priced while export prices in the Togo and Gambia markets were the highest. The main export species included wawa, Mahogany, Gmelina, Teak, Papao, Koto, Odum, Ceiba, Walnut, Ofram.

[TIDD 15/01/15]

ZambiaZAFFICO Pressed To Meet DemandThe Zambia Forestry and Forest Industries Corporation [ZAFFICO] will this year harvest a total of 470,000 cu.m of wood to be distributed to 1,071 customers up from 587 customers last year. Zambia National Association for Sawmillers [ZNAS] called for transparency and accountability in the distribution of wood and requested a Government ban on the export of timber in order to meet the local demand.

[Daily Mail 19/01/15]

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MalawiMalawi Assesses Flood-Damaged TobaccoThe Tobacco Control Commission [TCC] has commenced the assessment of damages to tobacco by floods after heavy rains in recent months. The rains have caused leaching of nitrogenous related fertilisers applied in farms. It is also very difficult for farmers to control weeds in the fields and curing the leaves is also problematic. Rains have also led to tobacco disease that is affecting the production of the crop. It will take the commission 2-weeks to come up with a detailed assessment report that will indicate the amount of damages incurred to production.

[Star Africa 20/01/15]

ZimbabweZimbabwe Imported US$29 Million Tobacco For BlendingLocal companies last year spent US$29.3 million on tobacco imports that they use for blending with locally grown Virginia tobacco to make cigarettes. The companies imported about 8.1 million kg from 9-countries at an average price of US$3.64/kg. The tobacco imported during the period under review was however lower that the 14.3 million kg that was bought for US$51.7 million at an average price of US$3.60/kg in 2013.

2014: Imported From Amount [kg] Total Price [US$] Average Price [US$]

Zambia 6.5 million 21.4 million 3.28/kg

India 885,792 4.4 million 5.02/kg

Malawi 257,035 1.5 million 5.89/kg

Mozambique 99,000 711,810 7.19/kg

Bangladesh 79,200 237,600 3/kg

Other imports were sourced from South Africa, Uganda, the United Kingdom and the United Arab Emirates.

In 2014 Zimbabwe grossed US$722.5 million from exporting 135.5 million kg of Virginia tobacco at US$5.70/kg. This was slightly lower than the US$877.4 million that was received from the sale of 153.3 million kg at US$5.72/kg in 2013.

2014: Exported To Amount [kg] Total Price [US$] Average Price [US$]

China 48 million 401.9 million 8.37/kg

Belgium 29.7 million 131.5 million 4.01/kg

South Africa 13 million 52.1 million 4.01/kg

UAE 9.2 million 29.1 million 3.16/kg

Russia 4.7 million 14.2 million 2.98/kg

Tobacco is one of the country’s top foreign currency earners and accounts for 10.7% of the country’s Gross Domestic Product [GDP]. It is one of the country’s top foreign currency earners and is also one of the key crops that is expected to anchor the 9% growth in agriculture this year within the framework of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

[The Herald 12/01/15]

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