Com-Watch - Issue 49 - June 2015.indd

FOCUS ON COTTON:CMA CGM / DELMAS YOUR COTTON TRANSPORT SPECIALISTS OFFERING TAILOR MADE SOLUTIONS AS 2014/15 AFRICAN CROP PRODUCTION SOARS TO RECORD HIGHSFull Story On Page 3

AFRICACOM-WATCH

Ghana: Failing Cocoa Harvest Drives Global Prices Higher

ISSUE 49 | JUNE 2015

West Africa: 2014-15 Cotton Production Soars To Record

Malawi: MOU Signed With Egyptian Tobacco Company

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Francophone West Africa: 2014-15 Cotton Production Soars To Record

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CMA CGM / DELMAS Your Cotton Transport Specialists

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Malawi: MOU Signed With Egyptian Tobacco Company

Ghana: Failing Cocoa Harvest Drives Global Prices Higher

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AFRICACOM-WATCH

ISSUE 49 | JUNE 2015

Contents03 / Corporate

05 / General

06 / Banana

07 / Cashew, Groundnut & Shea

09 / Cocoa

14 / Coffee

18 / Cotton, Textiles & Leather Goods

22 / Fish

23 / Foodstuffs & Beverages

29 / Palm Oil

31 / Rubber

32 / Sugar

35 / Tea

37 / Timber

41 / Tobacco

Top Stories

News Headlines By RegionWestern AfricaRegional: 2014-15 Cotton Production Soars To Record High / Producers Face 9-Year Price Low In 2015-16 / Producers Avoiding Timber Stock Build Up / Sipo Makes A Come-Back / Tight Supply Underpins Log Prices / Sawnwood Export Snapshot / Satisfying Timber ‘Due Diligence’ RequirementsAngola: 4th Feira da Banana / Portuguese Group Buys State Coffee Company / 2nd International Fair of Fisheries and AquacultureBurkina Faso: IFC, Société Générale Invest In Sector / Monsanto Offer ‘Mobicot’ Consultancy ServiceCameroon: Exports Increased 34,000T In First 8-Months Of Season / Exports Up 24% Y-Y In April / Cameroon Looking To Double Production Via Crop Processing / GIZ Finances The Training Of 18,000 Cocoa & Coffee Farmers / Farmgate Prices Fall On Scant Buyers / Cameroon To Triple Output To 100,000 Tonnes By 2020 / April Robusta Prices Remained At 1,000 FCFA Kg / Delays In Marketing 2014-15 Cotton Crop / Pamol To Open Palm Oil Plant / Socapalm / Decline In Global Rubber Prices Sinks Safacam’s Net Figures For 2014Côte d’Ivoire: Mid-Crop Could Equal Last Year’s / Rains Supports Mid-Crop / Cémoi Inaugurates Chocolate Factory / Cocoa Grind To ‘Slump’ As Tax Weighs / Grinding Expected To Drop This Season / Cote d’Ivoire Sees 11% Increase In Cotton Production / DekelOil Increases Production / SAPH CI Announces FCFA3.79 Billion LossGabon: Slow French Market And New Tariffs Hit African PlywoodGhana: GEPA Pushes For Investments In Groundnuts Value Chain / Cashew Processors Shutdown In Droves / Failing Harvest Drives Global Prices Higher: Worst Harvest In 5-Years / 2014-15 Cocoa Output Under 700,000T / EU Threatens Ban Over Quality Of Cereals / Benso Oil Palm Plantation Makes Profit / Exports 27% lower in Q3 2014 / Air Dry Sawnwood Dominates January Exports / Neighbouring Countries The Main Market For PlywoodGuinea-Bissau: Opens “One-Stop-Shop” For Exports / Guinea Bissau To Review Timber ContractsLiberia: Construction Funding For Tarjuowon Palm Oil Mill / Equatorial Palm Oil H1 Loss Narrows As Ebola Hits OperationsNiger: IFAD To Mechanise Rice, Cassava ProductionNigeria: Government To Reduce 2015 Rice ImportsSenegal: Groundnut Products Make Sharp Increase

Eastern AfricaRegional: EAC Develop 5,000 Standards To Ease Regional Commodity Trade / Companies Launch Sugar Umbrella AssociationBurundi: Sector On Verge Of CollapseEthiopia: Ethiopia To Quadruple Production In 5-Years / Ethiopia Lifts Ban On Teff Flour Exports / Revaluating Ban On Private Palm Oil ImportsKenya: Coffee Production Steady / Deloitte To Revive Murang’a Coffee Cooperative / Dormans To Double Exports / Kenya Plans To Privatise Sugar Companies Within A Year / 5th Africa Sugar Outlook Conference / Traders See Tea Prices Rising / Kenya’s Loss Is Indian Tea Sector’s Gain / Deal To Pay Tea Farmers More / Producer Sasini Sees H1 LossMalawi: Malawi To Spend US$47 Million On Maize / MOU Signed With Egyptian Tobacco CompanyMauritius: Omnicane 2014 Pretax Profits Down 52%Mozambique: South Africa Invests In Milk Production / Mega-Agricultural Projects / Mozambique Plans To Reactivate Búzi Sugar Company / Mozambique Lifts Ban On LoggingTanzania: Cashew Nut Processing Plants / Harvest & Exports To Hit Record High / Yields Slide As Temperatures Rise / Tanzania Plans US$100 Million Oil Palm Project / Bagamoyo Sugar Project On Course / Board Assures Sugar Stakeholders On Future / Task Force To Check Illegal Sugar ImportsUganda: Greenlights Superbananas And GMO / Coffee Sector Recovery / Uganda Bans Fruit & Vegetable Exports

Southern AfricaSouth Africa: Citrus Set For US / South Africa To Meet US Government Over Poultry Import Impasse / Livestock Import Requirements / Krispy Kreme To Launch In South Africa / Low Sugar Prices Hurt Producers / Sector Strike As Unions Declare DisputeZambia: AfDB Invests US$40 Million In Cashew / Projects Increased Cotton ProductionZimbabwe: Cottco Seeks Rescue Partner / Zimbabwe Poultry Production Rises 22%

000 Cocoa &onnes By 2020amol To Open

Chocolate d’Ivoire Sees 9 Billion Loss

In Droves /00T Q3 od

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Website: www.delmas.comEmail: [email protected]: @DelmasWeDeliver

CMA CGM Marseille Head Offi ce4, Quai d’Arenc 13235 Marseille cedex 02 France

Tel : +33 (0)4 88 91 90 00

www.cmacgm.com

Disclaimer of LiabilityCMA CGM / DELMAS make every effort to provide and maintain usable,

and timely information in this report. No responsibility is accepted for

the accuracy, completeness, or relevance to the user’s purpose, of

the information. Accordingly Delmas denies any liability for any direct,

indirect or consequential loss or damage suffered by any person as a

result of relying on any published information. Conclusions drawn from,

or actions undertaken on the basis of, such data and information are the

sole responsibility of the reader.

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

Rachel Bennett Dominic Rawle

CMA CGM / DELMAS: Cotton Transport Specialists Handling Sensitive Commodities Almost 10% of the world’s cotton is grown in Sub-Saharan Africa [SSA]. The Sahel states along the southern belt of the Sahara [Mali, Burkina Faso, Niger...] generate US$1.5 billion each year by exporting cotton, which accounts for up to 35-75% of the agricultural export earnings in this region, making this natural fibre one of the most important agricultural exports on the African continent.

As a leading shipping line on the African trades CMA CGM / DELMAS has the flexibility and knowledge to offer tailor made solutions in the transportation of such sensitive commodities. We review our specialist handling of cotton by interviewing Sandrine SIMON, Global Commodities Manager, Global Accounts Department [[email protected]].

Cotton is mainly found in landlocked countries. What transport solutions does CMA CGM / DELMAS offer? The Group has extensive experience of on-carriage throughout Africa, we provide through transport services to and from the land-locked countries of Mali, Burkina Faso, Niger and Chad where cotton is mainly cultivated.

Using a single document, the Combined Transport Bill of Lading [CTBL/BLD], we take full responsibility for the safe shipment and delivery of cargo whether it has to move by road or rail, no matter how many different stages the cargo must go through before reaching its final destination. We can arrange all your shipping, trucking, and transit formalities.

What are the main cotton transport corridors? Our main corridors are the Bamako-Dakar, Bamako-Abidjan, Ouagadougou-Lome/Cotonou/Abidjan and N’Djamena-Douala corridors where we offer fast transit options by road and rail. CMA CGM / DELMAS provides a competitive through transport tariff giving shippers ready access to simplified all-in quotes with charges made under a single invoice. We also manage local haulage operations throughout our African coastal markets.

What are the main export destinations? The main destinations from West Africa are the Asia countries of China, Indonesia and Vietnam as well as some cotton to Pakistan [Port Kasim and Karachi] and also to Bangladesh and India [Tuticorin and Chennai] where traders bolster their own crop production. Unfortunately due to the lack of factories in Europe we see less cotton moving to European destinations.

How is cotton transported? Cotton is usually shipped in largely square bales compressed to different degrees. Bales vary in size and weight but in Africa it is normally 200kg and intensely compressed. In liner terms we ship full container loads [FCL] in 40’ dry containers. The main season runs from January to July / August with last shipments in September / October when contracts finish.

Sandrine SIMONGlobal Commodities Manager

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COMMODITY NEWSCORPORATE

What specialist handling does this involve? The bales are tied firmly with steel straps or wire. Strapping is essential to maintain compression of the bales during transport. If the strapping is damaged or broken, compression is diminished, which at the same time results in an increased supply of oxygen to the inside of the bales. This in turn increases the risk of combustion or feeds a fire which has already started. Bursting or chafing of the steel straps and wires may lead to sparking and external ignition. To protect the cotton bales from contamination and damp, they are wrapped in jute or plastic fabric, or sometimes in plastic films perforated so as to regulate bale moisture content.

Cotton is very sensitive to moisture. What controls do you offer? Cotton cargo must be protected from moisture since it readily absorbs moisture. This may lead to discoloration, decay, mould, mildew stains and rot. In addition, the cotton may swell by absorbing water vapour, resulting in an increase in volume of 40 - 45%. A high water content is difficult to detect from outside, since the cotton does not feel damp even with a water content of 20%. To secure the cargo it must be secured in such a way that the bales or strapping are not damaged.

Undamaged strapping is essential to maintain compression of the bales during transport. If the strapping is broken, compression is diminished, which at the same time results in an increased supply of oxygen to the inside of the bales. This in turn increases the risk of combustion or feeds a fire which has already started. Bursting or chafing of the steel straps and wires may lead to sparking and external ignition. Due to cotton’s combustible nature hooks are not used for cargo handling, since they may lead to sparking when they come into contact with the strapping. In addition, smoking is absolutely prohibited during cargo handling.

Cotton is seen as a hazardous cargo, can you expand? Although not classed as a hazardous cargo, cotton’s high cellulose content makes it particularly liable to catch fire through external ignition. Therefore, it must always be protected from sparks, fire, naked lights and lit cigarettes. Cotton is assigned to Class 4.1 of the IMDG Code [Flammable solids] yet dry cotton does not fall under this class if its density is not less than 360 Kg/m3. However the specific characteristics and negative external influences may cause it to behave like a substance from Class 4.2 [Substances liable to spontaneous combustion] of the IMDG Code or ADR.

What are the most common delivery terms for cotton consignments? The most common ways to buy cotton are FOB [free on board], FAS [free alongside ship], CNF [cost and freight] or CIF [cost, insurance and freight]. For CMA CGM / DELMAS the shipper mainly sales FOB to the traders and the traders sell to the factories or buyer at destination. In the case of FOB or FAS, the buyer books and pays the ocean freight, and the seller delivers the cotton to the docks of the common carrier specified by the buyer. FOB/FAS contracts should specify the loading range. The buyer is responsible for costs after the cotton is delivered to the common carrier. In CNF, the seller is responsible for all shipping costs excluding marine insurance. Under CIF, the seller has additional responsibility for providing marine insurance. Once the cargo arrives and is discharged from the ship, the buyer becomes responsible for all costs.

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East AfricaEAC Develop 5,000 Standards To Ease Regional Commodity TradeThe East African Community [EAC] Secretariat is set to introduce 5,000 new standards to ease the movement of goods. Some of the new standards include seeds standards on maize, soya beans, sunflower, sorghum and groundnuts. Such standards will help address challenges of fake seeds in the market when implemented by producers and government. Other standards will be on sugar and sugar products such as chewing gum, liquid glucose used in industry, molasses, sugarcane and sweets. These will help facilitate trade in the region.

Experts say the new standards could be an answer to the puzzled private sector whose products have been traded for more than 10 years but have no national standards. Currently, EAC has 1,500 standards and will bring on board 5,000 more. The EAC will urge member states to domesticate these at national level.

[New Times 11/05/15]

RESOURCES: Export Promotion AgenciesEast African Community Trade [EAC]: http://www.eac.int/trade/ Tanzania Board of External Trade [TANTRADE]: http://www.tantrade.or.tz/Rwanda Development Board [RDB]: http://www.rdb.rw/ Kenya Export Promotion Council [EPC]: http://www.epckenya.org/ Uganda Export Promotion Board: http://www.ugandaexports.go.ug/en/

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COMMODITY NEWSGENERAL

Angola4th Feira da Banana The 4th edition of Feira da Banana was held 7-9th May at Panguila, Bengo province. The event saw 200 participants representing 14 provinces discussing matters related to the trade of banana, incentive policies and business among local and foreign growers. Angola is now self-sufficient and has even turned into modest exporter of banana.

[ANGOP 06/05/15]

UgandaGreenlights Superbananas And GMOUganda’s ruling party has approved the ‘National Biotechnology and Biosafety Bill’ that will give the green light to superbananas* and other genetically modified foods. The debated GMO bill is a framework to regulate the production but also the import and export, of biotechnology products. Farmers are worried that the bill could make them more dependent on patented seeds, fertilisers and pesticides. Many Ugandan farmers already practice de facto organic production. But only about 200,000 are certified organic farmers – a condition for access to large organic markets like the European Union and Japan.

[RFI 07/05/15]

*A genetically modified fruit inserted with a green pepper gene that prevents plants from dying from a bacterial wilt disease.

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COMMODITY NEWSBANANA

GhanaGEPA Pushes For Investments In Groundnuts Value ChainThe Ghana Export Promotion Authority [GEPA] is encouraging investments in groundnuts as a sustainable way to address the need for foreign exchange. Ghana’s non-traditional exports earning in 2013 was US$2.4billion, out of which groundnut exports amounted to US$6.4 million. Improvement is required if the government is to achieve its US$5 billion target to be generated from the non-traditional exports sector by 2019.

A major challenge that needs to be addressed in the export of groundnuts is the high rate of aflatoxin contamination in groundnuts which reduces the quality on the international markets. GEPA is targeting farmers and processors in 20-districts covering 4-region - Brong Ahafo, Northern, Upper East and Upper West - with training programmes to enhance export quality control, management and certification of groundnut and cereal products. The project is funded by the European Union [EU] and supported by the Trade Related Assistance and Quality Enabling Programme [TRAQUE], and under the auspices of the Ministry of Trade and Industry [MOTI].

[Ghana Web 14/05/15]

Cashew Processors Shutdown In DrovesAlmost all the major cashew processing companies in the country have shut down their operations as the result of many challenges, including lack of raw nuts, skyrocketing cost of raw cashew, high cost of credit, inefficient processing methodology and the infamous power crisis. Of the 12-processing companies in the country’s cashew hub -- the Brong Ahafo Region -- only one, Mim Cashew Nuts Limited, remains in operation. Amidst insufficient local production of the commodity, processors are feeling the pinch from the 2013 ban by Ivorian Authorities on exports. Ghana trades around 150,000-200,000 MT annually and relies heavily on RCN from Cote d’Ivoire and other West African countries to supplement local production, which hovers around 40,000-50,000 MT.

[Ghanaweb 21/05/15]

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COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

Guinea-BissauOpens “One-Stop-Shop” For ExportsA “one-stop-shop” to facilitate bureaucratic procedures for cashew exports has started operating in Guinea-Bissau, under the responsibility of the Ministry of Trade, Industry and Crafts. The “one-stop-shop” centralises all the parties involved in the sale of cashews and expedites bureaucratic procedures for economic operators to export the nuts. The facility also allows for data to be collected on the country’s main export. Exports in this campaign are expected to reach 200,000 tons against 136,000 tons previously.

[Macauhub/GW 26/05/15]

SenegalGroundnut Products Make Sharp IncreaseGroundnut production in Q1 2015 increased by 112.8% compared to 2014 from 7,400 tons to 15,800 according to the Directorate of Forecasting and Economic Studies [DPEE]. The increase is due to the boom in oil cake which rose from 3,800 tons in 2014 to 7,900 tons in 2015 up 106.6%.

[APA 22/05/15]

TanzaniaCashew Nut Processing PlantsThe cashew nut sub-sector is to get a hefty financial boost of up to 6bn/- from the Cashew Industry Development Trust Fund [CIDTF] for the construction of 3-processing plants to be constructed in Mtwara, Tunduru and Mkuranga. The aim is for the country to export processed cashew nut instead of raw ones.

[IPP 07/05/15]

ZambiaAfDB Invests US$40 Million In Cashew The African Development Bank [AfDB] will this year invest US$40 million in the production of cashew in Western province. The deal is expected to be signed by December this year. Funds will be used to re-capitalize the production of nuts which has been lacking for many years – to rehabilitate plants and engaging local farmers to produce the nuts.

[ZNBC 20/05/15]

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GeneralCocoa Hits 7-Month HighCocoa hit a 7-month high backed by continuing worries about production in Ghana and the potential weather effects of El Niño later in the year. Cocoa broke through key technical levels with the Liffe September cocoa reaching £2,092 a tonne, the highest level since September 30 last year. Cocoa prices rebounded strongly in April, surging by 8% to end the month, erasing all of this year’s losses. The recovery in prices reflects growing concern over the impact that Ghana’s poor 2014/15 crop, which is at least 100,000 MT short of expectations, will have on the supply of cocoa on the global market. Prices remain within the US$2,700- 3,100/MT range they have traded over the past 6-months. But as global demand recovers and expectations grow that there will a global deficit this season, prices could strengthen further during the second half of the year.

[FT 19/05/15]

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COMMODITY NEWSCOCOA

CameroonExports Increased 34,000T In First 8-Months Of SeasonAt the close of March 2015, 8-months into the 2014-2015 cocoa season, Cameroon, exported 177,509 tonnes, according to the National Cocoa and Coffee Board. These exports have increased by 34,000 tonnes relative to the 143,374 tonnes exported for the same period in the previous season. Although production has significantly increased compared to the last season, exports slowed in March 2015, amounting to only 10,810 tonnes compared to 19,806 tonnes in February. The export market was dominated primarily by 3-operators: Cameroon Marketing Commodities [Camaco] 2,558T, Olam Cam 1,713T and Ndongo Essomba establishments 1,621T of cocoa bean last month.

[Business in Cameroon 06/05/15]

Exports Up 24% Y/Y In AprilCameroon cocoa exports jumped 24% to 181,893 tonnes year-on-year by end-April since the start of the 2014/15 season on Aug. 1. Statistics from the National Cocoa and Coffee Board [NCCB] showed Cameroon shipped 4,384 tonnes of cocoa beans in April, down from 10,810 tonnes in March. But exports rose slightly, compared with 3,043 tonnes exported during the same month a year ago.

Ten firms exported cocoa during the month, with Olam Cam, a unit of Singapore’s Olam topping the chart with 1,818 tonnes, followed by Telcar Cocoa Ltd with 1,053 tonnes and Cameroon Marketing Commodities [CAMACO] with 752 tonnes. Cameroon cocoa season runs from August 1 to July 31, with the main harvest period from October to January/February and the light crop harvest period from April/May to June/July. Output stood at 209,905 tonnes in 2013/14 season.

[Reuters 20/05/15]

Cameroon Looking To Double Production Via Crop ProcessingOn May 5th the Minister of Agriculture, Essimi Menyé, launched the ‘whole crop’ processing campaign for 2015. Previously only 20% of the crop was processed. Meanwhile aging plantations and farmers has hindered production and bad processing has reduced current yield by 40-50%. More appropriate processing methods are needed to reduce such losses and increase production to 400,000T p.a. Average yield over the last 5-seasons was 200,000T. Cameroon is aiming to produce 600,000T by 2020.


GIZ Finances The Training Of 18,000 Cocoa & Coffee FarmersThe Interprofessional Council of Cocoa and Coffee [CICC], the National Cocoa and Coffee Board [NCCB] and the German cooperation agency [GIZ] have signed a financial agreement with a cocoa and coffee farmers program to train 18,000 farmers over 3 years. A second phase rollout will expand to other agricultural sectors.

[Med Africa 11/05/15]

Farmgate Prices Fall On Scant BuyersFarmgate cocoa prices fell across growing regions in May compared with the previous months as few buyers entered the market at the start of the mid-crop harvest. Most buyers stayed away as only small quantities of cocoa were available for sale. A kilogram of cocoa sold for 1,100 CFA francs [US$1.92] in Sangmelima in the South Region this month, compared with 1,225 CFAF/kg in April.

In Bafia in the Centre Region, one of Cameroon’s top growing areas, prices were 1,240 to 1,290 CFAF/kg compared with 1,300 CFA francs in April. The cocoa season in Cameroon runs from August 1 to July 31, with the main harvest period from October to January/February and the light mid-crop harvest from April/May to June/July.

[Reuters 15/05/15]

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Côte d’IvoireMid-Crop Could Equal Last Year’s This mid-crop harvest [April-September] is on track for a similar outturn to last season. Bean arrivals at Abidjan and San Pedro ports reached 1.405mn MT by May 17th, up 1% from the same period last year, reflecting the slow start to the season owing to dry weather that could delay the bulk of the harvest to June-July. However, initial forecasts of a 15% downturn could prove pessimistic as outturn is proving strong in the southwest [Soubré and San Pedro], offsetting a poorer outturn in the east. The only potential upset to mid-crop production is well-organised smuggling of beans to Guinea and Liberia, which, despite its estimated total of 10,000 MT, is drawing scrutiny from traders. There is a mixed outlook on bean quality as the southwest has been producing larger beans, with counts around 105/100g, while the east has been producing small beans with counts around 110-120/100g. As the Conseil du café-cacao [CCC] will allocate half of the mid-crop to grinders, owing to lack of exporter interest, it might struggle to sell all its production, owing to an unfavourable mid - crop rebate. While the CCC has increased the discount for bean sizes 106-120/100g in tandem with rising international prices last year, it kept the same discount for bean counts above 121/100g, representing an effective decrease.

[Ecobank 21/05/15]

Rains Supports Mid-CropAbundant rains in main cocoa growing regions bode well for the April-to-September mid-crop but farmers said they feared cocoa diseases could damage production. Pods will reach their peak in June but heavy rains can also damage roads, making it harder to get the crop off the farms and can lead to increased levels of bean mould.

[Reuters 05/05/15]

Cémoi Inaugurates Chocolate FactoryCote d’Ivoire inaugurated its first industrial-scale chocolate factory on 18th May, aiming to stimulate and support growing local consumption. With an investment of US$6.7 million for a production capacity of 10,000 tonnes per year, the new factory, owned by Cémoi, will produce chocolate “made in Ivory Coast” for the first time on an industrial scale. The country which produces more than 35% of global cocoa harvests and saw a record production of more than 1.7 million tonnes in 2014, wants to establish itself in other more lucrative sectors of the industry.

[AFP 19/05/15]

Cocoa Grind To ‘Slump’ As Tax WeighsCote d’Ivoire’s reign as the world’s top cocoa processor may prove short-lived, with an export tax, besides power hiccups, to prompt a “slump” in its grinding volumes this year, Ecobank has warned. Grinding fell to 500,000-540,000 tonnes in 2014-15, from last season’s record 570,000 tonnes. The forecast reflects the unfavourable conditions weighing on the sector, especially changes to the fiscal regime over 2-years ago that led to a 25% increase in the export tax. The drop in grindings could demote Cote d’Ivoire back behind the Netherlands in the world cocoa processing league, and interrupt a long shift in processing from major consuming regions to producing countries. The International Cocoa Organization has forecast Dutch processors grinding some 529,000 tonnes of cocoa this season.

The Ivorian government, which has a target of processing half of domestic output, will need to make concessions on the export tax if it is to achieve its aim. Ecobank, forecasts that this season the grinding level will reach 29-32%. Since the beginning of this year, the majority of the country’s grinders have been grinding an average of 40,000-45,000 tonnes per month. However grindings slumped to 37,000 tonnes last month, owing to disruptions to the power supply in Abidjan. Operators have also been undermined by the price for smaller, lower-grade beans exceeding in number 121 per 100 grammes, which are offered to domestic grinders at a discount in order to stimulate the Ivorian processing industry. The discount was increased this year, but may not be large enough to support domestic grinding.

[Agrimoney 28/05/15]

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COMMODITY NEWSCOCOA

GhanaFailing Harvest Drives Global Prices Higher: Worst Harvest In 5-YearsA poor cocoa harvest in Ghana has left the world’s #2 producer struggling to fulfil sales contracts and is driving up the price of the commodity on global markets. The unexpected fall in production, blamed on a lack of pesticides and bad weather. 2014/15 crop estimates will now not exceed 700,000T far below industry regulator Cocobod’s initial forecast of more than 1-million tonnes. Ghana’s 2013/14 crop was 900,000T.

European traders say the shortfall means Ghana might be unable to supply around 150,000-200,000T of cocoa which it has sold and may seek to roll those contracts forward to next season. Ghana’s cocoa is sold to international buyers by the state-owned Cocoa Marketing Company [CMC], a wholly-owned subsidiary of Cocobod. Global cocoa prices have already begun to climb, with a smaller crop in Ghana likely to lead to a significant global deficit in the 2014/15 season. ICE London futures have risen about 5% in the last few weeks. Some traders have been scrambling to buy any available Ghana cocoa stocks in Europe and premiums for in-store bagged supplies have risen to around 200 pounds above London futures, compared with about 80 pounds a couple of months ago.

[Reuters 06/05/15]

2014-15 Cocoa Output Under 700,000TGhana estimates its 2014/15 cocoa season output will be not more than 700,000 MT, down from an initial target of more than 1 million tonnes that had already been revised down to 850,000 MT. There has been a crop failure and the latest indication is that best output will be around 690,000-700,000 MT. Industry regulator Cocobod’s purchases stood at 559,169 MT in the first 28 weeks of the season, sharply down on purchases in the same period last season.

Ghana produced 750,122 MT of cocoa in the first 28 weeks of the 2013/14 season. The figures support reports that the harvest is likely to fall below expectations due to adverse weather and a lack of pesticides. Ghana has oversold its crop by promising to deliver more to buyers than it has been able to produce, but blamed the problem on the output shortfall. The government took out a US$1.7 billion syndicated loan last September to finance purchases. Ghana has started talks with international lenders to finance its next cocoa season.

[Reuters 05/05/15]

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

Date ICCO daily price (SDRs/tonne)

ICCO daily price (US$/tonne)

London futures (£ sterling/tonne)

New York futures (US$/tonne)

1 May 15 2081.60 2929.38 1972.67 2875.00

4 May 15 2099.08 2938.39 1988.67 2874.00

5 May 15 2131.92 2982.72 2004.67 2925.67

6 May 15 2112.49 2968.14 1990.33 2905.00

7 May 15 2112.42 2979.42 1997.33 2920.00

8 May 15 2131.04 2996.94 1982.00 2934.67

11 May 15 2170.59 3048.79 1997.33 2988.33

12 May 15 2190.45 3090.46 2010.33 3032.33

13 May 15 2206.03 3110.31 2017.00 3046.67

14 May 15 2206.30 3134.06 2029.00 3074.67

15 May 15 2240.42 3172.39 2049.67 3115.33

18 May 15 2240.89 3177.88 2063.00 3126.33

19 May 15 2258.23 3178.35 2084.00 3127.33

20 May 15 2253.28 3158.02 2070.67 3102.67

21 May 15 2279.73 3206.26 2080.33 3155.33

22 May 15 2264.02 3185.32 2094.33 3131.33

26 May 15 2288.54 3183.70 2101.33 3135.33

27 May 15 2284.88 3173.68 2109.67 3119.67

28 May 15 2278.02 3165.56 2109.67 3109.33

29 May 15 2258.32 3140.19 2095.67 3083.33

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COMMODITY NEWSCOCOA

AngolaPortuguese Group Buys State Coffee Company Angonabeiro, an Angolan company of Portuguese group Nabeiro, will invest US$1 million in the purchase of the entire share capital of Angolan state coffee company Liangol.

[Macauhub 26/05/15]

BurundiSector On Verge Of Collapse

Production in Burundi is facing collapse. Outturn for the 2014/15 season is forecast at 10,000 MT, down 13% from last season and less than half of the 24,000 MT produced in 2012/13. Burundi has struggled to increase coffee production since liberalising the sector in 2008, when it abolished the minimum fixed price. Fluctuating prices, lack of inputs and ageing trees [which reduced yields], and erratic weather have driven an exodus of farmers out of coffee into more lucrative crops, like bananas.

Farmer groups are fragmented and the few existing cooperatives are poorly organised and lack capital. This has prevented farmers from acquiring washing stations , which would allow them to capture a higher share of the international price from traders. In an effort to inject capital into the sector, the Burundian government has put 117 washing stations up for sale, but so far only Switzerland’s Webcor has entered the sector, buying 13 stations, including in Kayanza province which prod uces high quality Arabica beans.

[Ecobank 21/05/15]

CameroonCameroon To Triple Output To 100,000 Tonnes By 2020Cameroon aims to triple annual coffee output to 100,000 tonnes over the next 5-years by attracting more young people into the business, where output has been in decline due to low investment levels and an ageing farming population. Backed by the European Union, the government plans to invest US$21 million. The programme will create centres to produce cocoa and coffee seedlings, targeting around 452,000 farmers. Production bounced back to about 32,808 tonnes in the 2013/14 season from an all-time low of 16,000 tonnes the previous season. But it is still far from a record 156,000 tonnes produced in 1990.

[Reuters 28/04/15]

April Robusta Prices Remained At 1,000 FCFA/KgSince the start of 2015, Robusta prices, the variety that makes up 80% of the total production, has remained at a stable 1,000 FCFA/kg, despite some minor fluctuations. Launched in September 2009 the SIF project, financed by the Cocoa and Coffee Development Fund [FODECC] and the National Cocoa and Coffee Board [ONCC], supports farmers with daily prices - FOB and CAF- in real time. Daily text messages are sent to operators broadcasting reference prices using local radio, notice stations and the national media.


14

COMMODITY NEWSCOFFEE

Cote d’IvoireGrinding Expected To Drop This SeasonEcobank noted that cocoa processing in Cote d’Ivoire is expected to dip this year as a 25% increase in export tax hits smaller grinders and other unfavourable conditions weighs on the sector. Total cocoa grindings are forecast at between 500,000-540,000 tonnes, compared with an all-time high of 570,000 tonnes last season, and far below the government target of half of the forecast 1.7 million tonnes output. As part of reforms in 2012, Cote d’Ivoire abolished a 20-year-old tax break for local grinders. When it was repealed, the incentive equated to a 75 CFA franc ($0.12)/kg reduction of the DUS, the main export tax. Amid complaints from local processors, the government allocated to them half of this year’s April-to-September mid-crop and launched efforts to negotiate new tax breaks to take effect in the 2015/16 season. However talks over the new incentives have stalled, spawning pessimism among processors who say the uncertainty discourages investment in additional grinding capacity and could lead to stagnation in the sector. Ecobank also cited the discount grinders get on mid-crop beans being reduced, making the beans more expensive.

Ivory Coast’s top grinder is Swiss Barry Callebaut, the world’s biggest maker of industrial chocolate, which has about 27.5% of the Ivorian grinding market. Others include Cargill 17%, ADM 12%, followed by Cemoi and Singapore’s Olam at 10% each. Ecobank noted Olam’s acquisition of ADM, which has stopped processing this season, could further cut overall grinding levels as it remains unclear if Olam will keep ADM’s factory. It said Sucso, which was processing for Cemoi, has shut down operations while Condicaf, which has an offtaker agreement with Transmar, was not grinding at full capacity due to high costs.

[Reuters 27/05/15]

EthiopiaEthiopia To Quadruple Production In 5-YearsThe Ministry of Agriculture [MoA], in cooperation with the Ministry of Trade [MoT] has finalised a Coffee Development Strategy to boost coffee production in the second Growth and Transformation Plan [GTP II] over the next 5-years. The strategy, developed after a 6-month study conducted by Agrear Consultant, is targeted at raising the current coffee production capacity of the country four fold. Agrear began the €200,000 study in April 2014 commissioned by the European Union. To enhance production the study indicated that there should be structural reform, providing its own Ministry; loans should be facilitated for the coffee farmers and traders; the marketing of coffee should depend on quality rather than quantity; old coffee plants should be pruned; and the work procedure at the Ethiopian Commodity Exchange [ECX] should be changed to allow international buyers to directly contact the farmers and buy the coffee from the farmers themselves.

Ethiopia planned to reach export capacity of 600,910 MT/pa by the end of 2014/15 marking the end of the GTP I. At the start of the GTP I levels were 319,647 MT/pa in 2009/10. Currently exports stand at 190,876 MT for 2013/14 far below from the plan of exporting 277,500 MT. However for the 2014/15 fiscal year, Ethiopia expects to produce 461,620 MT, of which it expects to export 239,950 MT an increase of 23.6% in volume. In order to reach that target the Ministry has prepared half a million coffee seedlings, and 5,000qt of seed coffee to be distributed to the potential areas.

[Addis Fortune 27/04/15]

15


KenyaProduction SteadyA USDA report notes Kenyan production holding steady at 900,000 bags, with the loss of plantations around Nairobi to real estate development offset by officially-based moves to expand elsewhere, notably in the Northern Rift Valley, Coast and Western Kenya regions. Nevertheless, coffee production continues to face numerous challenges including: high cost of labour and inputs; erratic rains; high incidences of pests and diseases; competition from other farm enterprises; and poor governance of farmer organisations.

[IGC 20/05/15]

Deloitte To Revive Murang’a Coffee CooperativeMurang’a county will hire the services of Deloitte East Africa to revive the Murang’a Coffee Farmers Cooperative Union over 2-years. The union is an umbrella for 56 coffee cooperative societies. Deloitte will manage the value-chain from production, processing and marketing as well as look for buyers to sign long-term contracts with the cooperative. An interim board was inaugurated to serve for 90 days while the basis of a clean-up is set up.

[Star 20/05/15]

Dormans To Double ExportsLeading roaster, Dormans Coffee, plans to double its exports of roast coffee under new expansion plans. The company is investing US$7 million in integrated facilities [roasting, packing, warehousing and trading] as part of its new headquarters outside Nairobi, with the aim of boosting exports of roasted coffee to 15,000 MT. Although this investment is targeted at exports, it could also serve the company’s local chain of coffee shops that is set for expansion after last year’s take-over by the restaurant chain, Artcaffé. Dormans’ investment is a response to strong international demand for Kenya’s high quality Arabica beans.

Prices have surged on the Nairobi Coffee Exchange [NCE], with total sales of beans rising to US$93.2mn by mid-March, 12% higher than last season. The surge reflects a drop in bean supplies owing to dry weather which is expected to curb output at 40,0000 MT in 2014/15, around the same level as the past 3-seasons. Stagnating output reflects the fact that many farmers have abandoned coffee for more lucrative crops, owing to low international prices and low yields. This has also motivated farmers to sell farmland in the key coffee and tea belt [Kiambu, Murang’a and Nyeri counties] to real estate developers, leading to a reduction in the 170,000 ha planted with coffee. In response the government has vowed to restructure the sector, especially the marketing of beans, but it remains unclear what measures it will adopt to stop the gradual decline of the sector. In the meantime, the stagnation in Kenyan production could undermine the expansion plans of roasters like Dormans, whose export target represents over 20% of Kenya’s current crop.

[Ecobank 21/05/15]

16

TanzaniaHarvest & Exports To Hit Record HighTanzania’s coffee crop will hit a record high, taking a large step towards meeting an ambitious government target, boosted by weather improvements and official support measures. The harvest will hit 1.25m bags in 2015-16, on a July-to-June basis representing a rise of 100,000 bags year on year, and get the harvest within striking distance of a government target of increasing output to 80,000 tonnes [1.33m bags] by 2016, and 100,000 tonnes [1.67m bags] by 2021. Output at this level would lift exports to 1.22m bags, also a record high, and up 25% year on year.

Enhanced production prospects reflected improved husbandry practices being encouraged by government measures to boost agronomic practices and investment. However the arabica coffee harvest has historically shown the same tendency for alternate years of higher and lower crops also shown in some other producing countries, notably Brazil. Red tape is also curtailing progress for example a ban on direct cherry sales from farmers to the big coffee houses, such as Ecom, Neumann and Volcafe active in the country, and limits too on the presence these traders can have in the processing chain.

[IGC 20/05/15]

Yields Slide As Temperatures RiseTanzania is producing less coffee as higher temperatures affect yields, hurting the nation’s producers. According to researchers from the University of Witwatersrand higher night-time temperatures are the main factor behind a significant decline in yields. For each 1-degree Celsius rise farmers are likely to see a loss of approximately 137 kg/ha. That is almost half the average small producer’s production, which is currently 225 kg/ha. Negotiators at U.N. climate talks are working toward a global agreement to limit global warming to 2 degrees Celsius – but the world is currently on a path toward at least 4 degrees Celsius of warming by the turn of the century, scientists say. Forecasters indicate that if the trend continues production in Tanzania will drop to 145 kg/ha by 2060.

[Reuters 27/04/15]

UgandaCoffee Sector RecoveryA USDA report forecasts a recovery in coffee output in Uganda by 250,000 bags to 3.80m bags in 2015-16, on an October-to-September basis, after a dent to this season’s result from drought. A government-backed programme to boost output from use of better husbandry and planting of trees from improved stock is also helping prospects. The Uganda Coffee Development Authority [UCDA] hopes to lift domestic output to 4.5m bags a year.

[IGC 20/05/15]

17


Francophone West Africa2014-15 Production Soars To Record HighFrancophone West Africa is on track to reach a new production record high as the 2014/15 season draws to a close. Output was strong, with growth in Mali, Côte d’Ivoire and Benin offsetting a slight drop in Burkina Faso. In total, the region’s 2014/15 seed cotton production rose by an estimated 10% to 2.04mn MT.

[Ecobank 28/04/15]

Mali After 3-consecutive years of stagnating output, production surged by 25% to 552,000 MT, thanks to good rains and an increase in the area planted.

Côte d’Ivoire Overtaken Benin as 3rd largest regional producer & is on track to boost output by 11% to 450,000 MT, owing to an increase in area planted.

Benin Will continue to consolidate gains in seed cotton production, rising 18% to 360,000 MT, it is still facing lingering problems in its cotton value chain that will lead to lower cotton fibre volumes.

Burkina Faso To maintain its status as the region’s largest producer, but its output will dip by 4% to 680,000 MT, owing to dry weather earlier in the season. Given political instability last year, cotton companies faced delays in securing financing, which resulted in up to a 2-month delay in ginning. However, this did not ultimately affect output of cotton fibre, as factories ran at full capacity to close the gap.

West AfricaProducers Face 9-Year Price Low In 2015/16

As West Africa’s producers wind down ginning and marketing for this season, all eyes are turning to the 2015/16 season, which faces significant headwinds. The key players in the sector – from the regulators, to the cotton companies and farmer organisations – face the daunting task of setting minimum farmgate prices before planting starts in June. International cotton prices have lost a third of their value over the past year, owing to the glut of cotton on the international market. International cotton prices are expected to average less than US$0.70/lb in 2015/16, down 20% from US$0.88/lb the previous season, representing a 9-year low.

This will put pressure on governments to reduce farmgate prices, which ranged from XOF 235-250/kg [37-41 US cents/kg] in 2014/15. But this is risky, as a steep price cut could prompt farmers to abandon cotton for other cash crops, such as sesame and soy. Governments will try to limit any reduction in the farmgate price, offsetting the subsidy elsewhere in the chain. Furthermore, Burkina Faso and Mali will continue to offer farmers an end of season bonus, whose size will depend on the value of fibre sales.

Given the issue’s sensitive nature, Burkina Faso’s and Mali’s key cotton companies, Sofitex and CMDT, set farmgate prices in consultation with farmers’ groups, Union nationale des producteurs de coton du Burkina [UNPC-B] and Union nationale des sociétés cooperatives des producteurs de coton [UN-SCPC] du Mali. This has been a key factor in building legitimacy for the process with farmers. However, negotiations will be clouded by leadership disputes within the farmers unions, which have led to threats from producers to boycott production. If unresolved, this could heighten the risk of disruptions to 2015/16 production, as in the past both Burkina Faso’s and Mali’s farmers have boycotted output in response to low prices and high input prices.

[Ecobank 28/04/15]

18

COMMODITY NEWSCOTTON, TEXTILES & LEATHER GOODS

Burkina FasoIFC/Société Générale Invest In SectorIFC, a member of the World Bank Group, and Société Générale announced the launch of a €70 million facility to help Burkina Faso’s biggest cotton company, SOFITEX, support local farmers and finance the 2014/15 cotton campaign. Signed under IFC’s Global Warehouse Finance Program, the facility will allow SOFITEX to purchase raw cotton from over 160,000 farmers in Burkina Faso to process and export to international markets.

Shifts in global demand and commodity prices make it difficult for cotton companies to secure finance. Through the facility, IFC, GAFSP and Société Générale will lend to SOFITEX against warehoused commodities, providing the company with liquidity to finance its crop purchases.

[Finchannel 13/05/15]

Monsanto Offer ‘Mobicot’ Consultancy Service American giant Monsanto is to join Sofitex and Airtel Burkina to launch a free mobile cotton consultancy service otherwise known as Mobicot. The initiative aims to improve practices and yields vis SMS messaging.

[Ecofin 22/05/15]

CameroonDelays In Marketing 2014-15 Crop Cameroon has yet to market half of its cotton production for the now-ended 2014/15 season [June-April] season, which could lead to heavy losses.

Sodecoton, the government-owned cotton monopoly, normally buys the lion’s share of its supplies early in the season, starting in November, which is critical to producing high quality fibre as it coincides with the dry season. This reflects the fact that higher quality seed cotton is produced shortly after harvesting, with lower humidity and contamination levels, while ginning machines run at a higher efficiency in drier temperatures, leading to higher fibre yields. Coupled with favourable climatic conditions of Cameroon’s Northwest cotton zone, this has helped Sodecoton build a reputation for high quality fibre among cotton traders in West and Central Africa.

Despite production of seed cotton surging by 19% in 2014/15, to an estimated 280,000 MT, producers are still waiting to sell around 150,000 MT of seed cotton, increasing the risk of damage to poorly - stored cotton at the onset of the rainy season. The reasons for this delay in marketing are unclear, but they could reflect financing constraints on Sodecoton’s buyers, and lack of trucks to collect the cotton up-country. Should farmers fail to sell a significant proportion of their crop, this could exacerbate the ongoing exodus of farmers out of cotton into more profitable crops.

[Reuters 17/05/15]

19


Cote d’IvoireCote d’Ivoire Sees 11% Increase In ProductionAt the end of the 2014/2015 marketing year, Côte d’Ivoire cotton production recorded an increase of 11% reaching 450,000 tonnes up from 405,000 tonnes previously. This performance is the second consecutive record for this sector. The Ivorian Cotton Ginners Association noted the increase was due to good rainfall, an increase in the number of producers and better practices. If the climate is good the sector hopes to reach 500,000 tons during the next campaign. Last year Côte d’Ivoire launched a cotton development plan setting a target of 600,000 tons within 2-years.

[Ecofin 27/05/15]

20

ZambiaProjects Increased Cotton ProductionZambia is expected to record an increase in cotton production in the 2014/2015 season. The Zambia Cotton Ginners Association (ZCGA) noted the nation is expected to produce 130,000 tons of cotton from 95,000 tons produced in the previous season due to the rise in the number of farmers and hectares planted.

[Xinhua 14/05/15]

ZimbabweCottco Seeks Rescue PartnerCottco Holdings Ltd., sub-Saharan Africa’s biggest cotton company, said it’s seeking a partner to help it with funding after talks with the China-Africa Development Fund collapsed and as it renegotiates debt payments with lenders. Cottco based in Harare, operates 5-ginneries with an annual processing capacity of 150,000 MT of seed cotton. It posted a loss of US$10 million in the 6-months ended Sept. 30 as the national harvest fell as some farmers switched to other crops with the international price of cotton falling 21% over the past year. The company has suspended its application for judicial management and is talking to lenders about reorganizing its debt.

Zimbabwe’s cotton crop is expected to plunge to between 90,000 and 100,000 tons this year from 145,000 tons last year as a result of poor weather. The Zambezi valley was affected by floods. Cottco expects to buy 33% of the national crop. Competitors include the local unit of Singapore’s Olam International Ltd., a company known as China Africa Cotton Zimbabwe Ltd. and ETG Parrogate. The cotton industry is still negotiating with farmers for this year’s producer price, which will be determined by the international lint price, costs of production for the farmer and cost of the ginner. Last year, the average price was 60 cents per kilogram of seed cotton.

[Bloomberg 19/05/15]

21


Angola2nd International Fair of Fisheries and Aquaculture The 2nd International Fair for Fisheries and Aquaculture [www.fil-angola.co.ao/] will take place from 26-29 November 2015 under the theme “Fisheries and Aquaculture Angola, Tide of Opportunities in a Sector in Development”. The event, organised by the Ministry of Fisheries, will feature over 100 Angolan and foreign companies. Its main aim is to promote the introduction of new techniques and technologies adaptable to the fisheries production process and to strengthen the scientific research system.

Fish production in Angola in 2014 reached 396,000 tons, including industrial, semi-industrial, artisanal and sea and inland fishing. In 2014 Angola exported 41,287 tons of seafood, fish and fishmeal, 1.4 million litres of fish oil and opened several industries to support the fishing sector.

[Macauhub 22/05/15]

22

COMMODITY NEWSFISH

EthiopiaEthiopia Lifts Ban On Teff Flour ExportsEthiopia plans to begin exporting teff flour, a local food staple, following a 2006 government ban on exports. Unless it is in the form of cooked products, Ethiopian companies have been prohibited from exporting teff. Instead, Ethiopian entrepreneurs can only export injera, a pancake-shaped bread, and other cooked teff products such as cakes and biscuits. The new initiative will allow exports of milled and packaged teff.

[AFK 05/05/15]

GhanaEU Threatens Ban Over Quality Of CerealsAccording to the Trade Related Assistance and Quality Programme of the EU, Ghana may face a possible ban from exporting commodities like groundnuts, peanuts butter and cereal products to the European market if it is unable to reduce the level of aflatoxin contamination in such commodities - a toxin produced by a fungus growing on crops which cause liver disease.

[Ghanaweb 15/05/15]

MalawiMalawi To Spend US$47 Million On MaizeMalawi plans to spend US$47 million on maize purchases locally and abroad to address food shortages after a combination of floods and drought damaged crops. US$18 million will be spent before the end of June with the remainder earmarked for purchases from July 1, when the 2015/16 financial year begins. In January torrential rains forced Malawi, which had a bumper crop of 3.9 million tonnes in 2014 and a surplus of over a million tonnes, to declare half the country a disaster zone.

[Yahoo 27/05/15]

MoroccoCastel Acquires Stake In BelvedereCastel has purchased a 5.66% holding in French drinks group Belvédère. The transaction has been completed within the framework of an agreement with Morocco-based Diana Holdings, the wine and spirits company’s single biggest shareholder. Together, the 2-partners control almost 23% of Belvédère’s capital. Meanwhile Belvédère has proposed changing its name to Marie Brizard Wine & Spirits as the final step in the group’s normalisation plan. The group recorded 4.4% sales growth in Q1 2015.

[Spirit Business 26/05/15]

Bel Takes Majority Stake In SafilaitFrench cheese maker Bel has acquired a majority interest in Moroccan dairy firm Safilait from private equity firms Fipar Holding and Sopar. Safilait is the 3rd largest dairy company in Morocco. It specialises in the processing, packaging and sale of fresh milk, UHT milk and fresh dairy products through its Jibal brand. Bel will acquire a 69.82% of Safilait’s share capital. The remaining 30.18% interest will stay under the ownership of Safilait’s founding company, Yasfi. The deal is subject to approvals. The expectation is that these will be secured by Q3 2015.

[Just Food 29/05/15]

23

COMMODITY NEWSFOODSTUFFS & BEVERAGES

MozambiqueSouth Africa Invests In Milk Production South Africa is to invest US$4.1 million in cattle and milk production in Mozambique under a bilateral cooperation agreement in force since 2007. The funding will be spent on the creation of a Milk Processing Centre [Copoleite] and construction of a plant for milk processing as well as the promotion of dairy farming. South Africa will continue to provide support to Mozambique following a bilateral agreement signed this month for the transfer of food production technologies.

[Macauhub 04/05/15]

Mega-Agricultural ProjectsThe Government is planning to lease 240,000 ha of prime farmland in the Lurio River Valley to investors to grow crops for export. The Lurio River Valley Development Project in the country’s northeast would produce cotton, corn, sugar, ethanol and livestock. The proposed project expected to cost US$4.2 billion, involving 2-hydroelectric dams along with agriculture plans, is currently awaiting approval from the Council of Ministers. The proposal follows another major ongoing agricultural project in Mozambique with the government planning to approve the Brazilian-and-Japanese backed ProSavana Project covering several million hectares to grow soybeans by the end of the year.

[Sowetan 25/05/15]

24

NigerIFAD To Mechanise Rice, Cassava Production The International Fund for Agricultural Development [IFAD] has said that it would assist farmers in 3- government areas in Niger in the mechanisation of rice and cassava production to include improving irrigation facilities and rehabilitation of rural roads in t Wushishi, Katcha and Bida.

[NAN 02/05/15]

NigeriaGovernment To Reduce 2015 Rice Imports Nigeria’s rice import target will be 1.3 million MT down from 1.5 million in 2014. 1-million MT of this quota has been set aside as allocations to existing rice millers, importers and new investors with approved Domestic Rice Production Plans [DRPP], at a preferential levy of 20% and duty of 10%. This year’s supply gap is 200,000 MT lower than 2014, as rice importers with no DRPP will account for the remaining 0.3 million MT at the higher levy of 60% and duty of 10%. In 2014, rice importers and new investors were required to post a Domestic Rice Production Performance Bond from a qualifying bank to clearly demonstrate their commitment to domestic investment plans in production and processing. Under this year’s import quota, the Federal Ministry of Agriculture and Rural Development has identified 22 companies that will receive quota allocations.

[Guardian 11/05/15]

25


South AfricaCitrus Set For USThe first South African citrus fruit of 2015 will be arriving in the US in mid-May, while the first significant arrivals are scheduled for mid-June. Citrus growers in the Western Cape region say their 2015 harvest is earlier than usual following excellent growing conditions enabling them to be more price-competitive this year. The early fruit has been shipped in containers and should arrive in Newark followed by the loading of the first conventional vessel in Cape Town carrying the first significant volumes to arrive at Philadelphia earlier than last year.

The Western Cape Citrus Producers’ Forum [WCCPF] noted the strength of the South African currency and the impact of lower oil prices are in the country’s favour, and are further reason for confidence. South Africa also carried out pilot programmes last year in order to get fruit more quickly to consumers. One of these was shipping citrus to Houston, Texas. This year the first vessel to discharge South African citrus at Houston is expected in July.

Meanwhile the renewal of AGOA is very important for market opportunities. South Africa’s position in AGOA has been in doubt because of a dispute about restrictions on the exports of frozen chicken meat from the US to South Africa. The 2-governments asked the two respective poultry associations to sort their differences out, but apparently this has not been successful. AGOA’s renewal is currently before the US Congress, with a vote expected before the end of 2015.

[Fruitnet 15/05/15]

26

South Africa To Meet US Government Over Poultry Import ImpasseThe South African Poultry Association (Sapa) and the US Poultry and Egg Export Council are to deliberate over market access for US chicken bone-in cuts into South Africa. The meeting, to take place in Paris, France, on June 4-5, on the margins on the Organisation for Economic Cooperation and Development Ministerial Council Meeting, will be attended by South African Trade and Industry Minister Dr Rob Davies and US trade representative Ambassador Michael Froman. Both governments are committed to finding an amicable solution.

Davies is concerned about the terms outlined by the US with regard to South Africa’s re-entry into the African Growth and Opportunity Act (AGOA) – a nonreciprocal trade preference programme that provided duty-free treatment to US imports of certain products from eligible sub-Saharan African countries. This followed a decision by the US Senate to pass a Bill that provided for the Agoa to be extended for a period of 10-years, with South Africa included.

New provisions in the Bill, however, strengthen the conditionalities that will apply and clearly seek to chart a course to transform the relationship between the US and Africa from nonreciprocal concessions to reciprocal agreements.

[Engineering News 25/05/15]

Livestock Import RequirementsOn 17th April 2015 the South African Department of Agriculture, Forestry and Fisheries [DAFF] published proposed revised import requirements for live cattle, sheep and goats imported from Botswana, Lesotho, Namibia and Swaziland [BLNS]. The draft requests certificates for sheep and goat imports as per the exisiting requirements for cattle imports: origin and destination from a country/zone free from specified diseases and the testing and vaccination requirement for each animal. The proposed move ensures consistency with the World Trade Organization [WTO] Agreement on the Application of Sanitary and Phytosanitary [SPS] Measures.

[Economist 08/05/15]

Krispy Kreme To Launch In South AfricaU.S. doughnut franchise Krispy Kreme plans to launch in Africa this year in partnership with a local company, and the goal is to open 31 stores in South Africa within 5-years. The local company, Krispy Kreme Doughnuts SA, is owned by John & Gerry’s Brands and Fournews, which own the News Café, Café Fino, Smooch, Moyo and illy GO! Brands.

[AFK 26/05/15]

27


UgandaUganda Bans Fruit & Vegetable ExportsThe trade ministry has imposed a 1-month ban with immediate effect on Ugandan fruit and vegetable exports to the European Union [EU] following quality related complaints by Brussels. A technical team consisting of several government agencies has quickly been set up to devise ways of rectifying the issues associated with its exports to the EU and establish a value-chain. Since February 2014, the European Union has been threatening to suspend Ugandan products such as flowers, vegetables and fruits, due to the use of banned chemicals and phyto-sanitary requirements.

ZimbabweZimbabwe Poultry Production Rises 22%The Zimbabwe Poultry Association [ZPA] has reported a 22% year-on-year rise in poultry production. The latest report by the association claimed the total number of chicks produced rose by 14 million between 2013 and 2014 – from 64.4m to 78.4m. Upscale broiler sector meat production remained largely the same, at 2,690 MT per month. The total meat production from day-old chicks is estimated to have increased by 24% to 11,000 MT per month.

[African Farming 20/05/15]

28

CameroonPamol To Open Palm Oil PlantPamol, an agro-industrial company, is to approach banking institutions for funding to build a 30 MT/hr palm oil production plant as part of a contract plan signed with the Cameroonian government. The upgrading plan also involves the construction of a soap factory and a new 500 ha plantation to be created in the Bakassi Peninsula.


SocapalmPalm company Socapalm has achieved a net result for 2014 of FCFA5.9 billion s up 20% on its FCFA 5.1 billion in 2013. Socapalm year-end increase was up 11% with a turnover of FCFA 46 billion against FCFA 41 billion in late 2013.

[Ecofin 26/05/15]

Cote d’IvoireDekelOil Increases ProductionDekelOil Public, operator and 51% owner of an established palm oil project in Côte d’Ivoire, announced total crude palm oil [CPO] production in the first 4-months of 2015 has surpassed 14,242 tonnes, the production level achieved in 2014. This includes a record monthly production of 4,818 tonnes for April at the company’s 60 t/hr CPO extraction Mill, which is one of West Africa’s largest.

[Interactive Investor 05/05/15]

EthiopiaRevaluating Ban On Private Palm Oil ImportsThe Ethiopian Ministry of Trade [MoT] is revaluating its ban on private Palm Oil importing companies that has been in place since May 2011. The ban was placed following the government’s unsuccessful attempt to regulate the edible oil market with a price cap it had introduced in January and May 2011. During that time, there were 6-major importers together with Al-Sam International and Get-AS International importing 3 million litres of Palm Oil per year. The Ministry will first share its study with the Ministry of Finance and Economic Development [MoFED] and the Council of Ministers before any decisions are made.

[Addis Fortune 30/04/15]

29

COMMODITY NEWSPALM OIL

GhanaBenso Oil Palm Plantation Makes ProfitThe Benso Oil Palm Plantation Limited made a profit after tax of 12.9 million Ghana cedis in 2014 representing 112% increase over that of 2013. The company has been declared the first certified sustainable oil palm plantation in Ghana and second in the whole of Africa by the Round Table Sustainable Palm Oil [RSPO].

[Ghanaweb 18/05/15]

LiberiaConstruction Funding For Tarjuowon Palm Oil MillGolden Veroleum Liberia has signed a Letter of Acceptance with Malaysia-based Modipalm Engineering Sdn Bhd for the construction of its Tarjuowon Palm Oil Mill and Greenville Bulking Station. The contract, worth upwards of US$21 million is expected to be completed by 2017.

[GNN Liberia 07/05/15]

Equatorial Palm Oil H1 Loss Narrows As Ebola Hits OperationsEquatorial Palm Oil PLC said its pretax loss in H1 2015 was in line with expectations after the Ebola crisis had a significant impact on its operations but said it is still in a strong position to carry out its strategy. For H1 of the financial year ended March 31, it reported a pretax loss of US$439,000, which is narrower than the US$745,000 loss reported a year earlier.

[Alliance News 18/05/15]

TanzaniaTanzania Plans US$100 Million Oil Palm ProjectLand acquisition for a US$111 million Integrated Oil Palm Project in Ruvu Basin Coast region near Dar es Salaam has seen 6,000 ha purchased toward the project which requires a total 10,000 ha. The integrated oil palm project is being developed by the National Development Corporation [NDC - 20%] in partnership with the private sector and incorporate the out growers in a form of contract farming. In 2013 NDC of Tanzania inked a deal with Nava Bharat Pte Ltd of Singapore [NBS – 80%] to put up an oil palm farm and processing plant. The plant would be located in the Kisarawe District.

[EA Business Week 17/05/15]

30

CameroonDecline In Global Prices Sinks Safacam’s Net Figures For 2014Société africaine forestière et agricole du Cameroun (Safacam) made a net return of 1.8 billion FCFA compared to 2.8 billion FCFA at the end of 2013 - a 1-billion FCFA downturn. According to Safacam’s auditors, this loss is due to a decline in global rubber production and pricing last year. Safacam palm oil production grew by 8% in 2014, but that of rubber fell by a 12% for the same period while world prices for the latter raw material fell by 31%.


Cote d’IvoireSAPH CI Announces FCFA3.79 Billion Loss Ivory Coast’s natural rubber producer company SAPH CI reported a net loss of 3.79 billion CFA francs (US$6.47 million) in 2014 versus a profit of 13.70 billion in 2013. Turnover was 99.61 billion CFA francs, down from 155.62 billion in 2013, but gave no explanation. SAPH is the Ivorian leader of rubber with 70% of market share.

[Reuters 22/05/15]

31

COMMODITY NEWSRUBBER

East AfricaCompanies Launch Umbrella AssociationEast African sugar stakeholders have formed the East African Sugar Industry Association [EASIA] in an effort to collectively address serious challenges thwarting development the sector. The regional body will provide a platform to exchange ideas, advice partner states governments on factors affecting the sugarcane based sector in the entire east African region and provide advocacy on policy issues for development of the industry. Challenges range from excessive sugar imports in domestic markets, relatively slow growth of domestic production of sugarcane growers and millers to high costs of production.

[Xinhua 25/04/15]

KenyaKenya Plans To Privatise Sugar Companies Within A Year

Kenya has approved the sale of the government’s stakes in 5-sugar companies after writing off US$611 million of debt. It expects to sell 75% stakes in transactions that will be completed in the next 9-12 months. These companies account for 10% of the 592,100 MT of sugar produced in Kenya last year.

All are in urgent need of modernisation to survive competition from the entry of other sugar producers and an impending end to sugar import limits from the Common Market for Eastern and Southern Africa [COMESA] trade bloc after the end of a 1-year extension given early this year. The government will sell shares in millers Nzoia, South Nyanza, Chemelil, Muhoroni and Miwani [the latter 2 are in receivership]. The Privatization Commission said it plans to sell 51% of each of the millers to strategic investors with a track record of managing sugar companies with proceeds funding rehabilitation and modernisation. A further 24% of the companies will be sold to employees and outgrowers.

Kenya is struggling to improve output because of relatively high production costs and produces a total of 600,000 tonnes of sugar a year, compared with annual consumption of 800,000 tonnes. The deficit is covered through the strict import quotas from COMESA. The leading sugar producer, Mumias Sugar, reported a 2014 pretax loss of US$38 million blaming weaker sugar prices. The government has reached a US$54.9 million deal with banks to help cash-strapped Mumias as it implements a reorganisation. The government ultimately aims to sell its remaining 25% stake in the sugar companies by other means, including initial public offerings, while reserving a 6% stake for farmers.

[Reuters 15/05/15]

5th Africa Sugar Outlook ConferenceThe Africa Sugar Outlook Conference, held from April 28-30th in Nairobi, Kenya, confirmed itself as the largest annual sugar industry gathering in Africa. Co-hosted by the Kenya Sugar Directorate, hundreds of participants including governments’ representatives, international experts and industry leaders attended from Africa, the Middle East, Europe, Brazil, and Australia. The event explored future opportunities for the African sugar market, discussed new trade and financing strategies, and shared best practices and latest innovations in sugar production.

[CP Africa 07/05/15]

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COMMODITY NEWSSUGAR

MauritiusOmnicane 2014 Pretax Profits Down 52%Leading producer Omnicane reported a 52% fall in pretax profit in 2014 to Rp269.35 million [US$7.80 million] from a year earlier, that it blamed on low sugar prices and a workers strike. Last November around 4,000 workers in the Mauritius sugar industry went on strike over a pay dispute with sugar producers.

[Reuters 04/05/15]

MozambiqueMozambique Plans To Reactivate Búzi Sugar CompanyThe Mozambique government is looking for solutions to re-launch sugar company Companhia Açucareira do Búzi [CB] in Sofala province. The company, at a standstill for more than 2-decades, has completely abandoned sugar cane fields and the production plant is in an advanced state of disrepair. There are 4-factories in operation, Marromeu, Xinavane, Maragra and Mafambisse, 25 producer associations and 486 independent producers.

[Macauhub/MZ 06/05/15]

South AfricaLow Sugar Prices Hurt ProducersIllovo Sugar Ltd and Tongaat Hulett, Africa’s 2-biggest producers, reported weaker full-year profits this month, blaming softer global prices and lower output. Lower export prices to key regions such as the European Union [EU] were worsened by the weakening of the Euro and the Brazilian Real as well as weaker production in South Africa. Tongaat is expected to show a production decline of at least 22% of raw sugar reaching its level lowest for 15 years.

Shares in Illovo dropped 8% to R969, their lowest in 6-years and rival Tongaat fell 0.7% to R174. Illovo’s sugar’s production fell 3.8% to 1.76 million tonnes in the year, while Tongaat’s output dropped 7.7% to 1.31 million. Both attributed the fall to drought and winter frost.

The industry has grown increasingly competitive in recent years due to excess supplies and a crowded marketplace. World sugar prices are languishing near the lowest levels in more than 6-years below 13 cents per pound. The South African producers noted they were forced to sell at a loss due to low prices and high operating costs while countries such as Brazil produce cheaply and flood the market. Tough global markets were offset by stronger demand in South Africa and Tanzania after the governments there took import protection steps against cheap and illegal sugar. Mozambique is expected to introduce protection measures in the next few months.

[Reuters 25/05/15]

Sector Strike As Unions Declare DisputeFive thousand employees in the sugar industry could potentially go on strike, as Uasa and other trade unions involved in negotiations currently under way at the bargaining council declared a dispute. The union is awaiting the appointment of a commissioner by the Commission for Conciliation, Mediation and Arbitration. As such, a strike was looming ahead for the sugar sector if the dispute remained unresolved. Demands include a wage increase of 13.5%, from April 1 and a medical aid subsidy.

The industry is already in a difficult position as several mills had been shut down in recent months as a result of insufficient sugar cane owing to drought conditions. Operators are also hampered by sugar cane imports from neighbouring countries.

[Engineering News 20/05/15]

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COMMODITY NEWSSUGAR

TanzaniaBagamoyo Project On CourseThe Swedish International Development Agency [SIDA] has pulled out the US$500 million integrated sugar production and electricity generation project in Bagamoyo due to delays in implementation. The condition was to present a strategic partner willing to invest in the project by April 30 but none was found. However its private handler Agro EcoEnergy Tanzania Limited has vowed to look for new finance partners. Agro EcoEnergy Tanzania is jointly owned by EcoEnergy Africa AB which has 93.5%, 5% is held by Tanzanian Petroleum Development Company [TPDC] and 1.5% belongs to Community Finance Corporation Ltd [CFC]. The EcoEnergy project is expected to produce about 130,000 MT of sugar, 10 million litres of ethanol and 100,000 MW of electricity.

[Daily News 11/05/15]

Board Assures Sugar Stakeholders On FutureThe Sugar Board of Tanzania [SBT] has assured stakeholders that the door is open for their recommendations to be considered as the 2015 Sugar Industry Amendment regulations prepare for take-off. Members of the Tanzania Sugar Producing Association [TSPA] during the stakeholders’ annual meeting in Dar es Salaam threatened to walk out after a presentation on the new regulations seemed to show that their views and recommendations were not considered.

The much awaited bulk importation consortium buying system will be put in place that hopes to curb illegal sugar imports. The new regulations will help check mushrooming out-grower associations, have an independent audit for dealers of industrial sugar to ensure they use for the required purpose as well as regulate the repackaging of sugar which SBT has to prepare the required guidelines as it is in its mandate.

The consortium will be a non-profit making entity that will comprise of sugarcane growers, manufacturers and traders and members of the consortium will not be allowed to be buyers of this imported sugar. Many stakeholders commented that traders should have no part in the consortium as by nature they are profit driven and will conflict interests.

[All Africa 17/05/15]

Task Force To Check Illegal Sugar ImportsA task force involving the Tanzania Revenue Authority [TRA] in collaboration with other authorities has been formed to contain illegal sugar imports and check dumping of transit sugar on the local market. The task force will also undertake regular inspections to ensure industrial sugar is used appropriately.

[Daily News 24/05/15]

Tanzanian Industry In Figures300,858 MT: 2014/2015 production target304,007 MT: Produced by April when factories close operations - 1% above target590,000 MT: Local annual demand: 420,000 domestic / 170,000 industrial 300,000 MT: Annual production290,000 MT: Production shortage

34

KenyaTraders See Prices Rising Auction prices in Kenya rose to a more than 2-year high and may climb further as hailstorms damage the crop. The average price increased to US$2.77/kg at the sale in Mombasa during the 1st week of May. According to the East African Tea Traders Association that’s the highest since March 2013. Rains in April came with hailstorms, which destroyed leaves in Kericho and Nandi, worsening the damage that had already been caused by the dry spell. 5.3 million kg were offered compared with 8 million kg a year earlier and 8.1 million kilograms in the first auction of 2015, data from Tea Brokers East Africa show. Kenya produced 24.3 MT of tea in February, 28% less than a year earlier as of May 6. While forecasts indicate more rain in May, showers will be insufficient to improve production significantly. The delay in improvement will support higher prices.

[Bloomberg 10/05/15]

Kenya’s Loss Is Indian Tea Sector’s GainKenya’s loss could well be a gain for the Indian tea sector. After a dismal year in export, things are looking up for the sector, owing to a drought in Kenya, one of the world’s largest exporters of black tea. The drought in Kenya has pushed up tea prices to US$3-4/kg on an average. By comparison, Indian tea is priced at US$3-3.5/kg.

[Business Standard 04/05/15]

Deal To Pay Tea Farmers MoreThe Kenya Plantation and Agricultural Workers Union has signed a 22% salary increase agreement with Kenya Tea Packers. Nairobi and Mombasa will receive 22% whilst other urban centers is15%.

[The Star 12/05/15]

Producer Sasini Sees H1 LossKenyan tea and coffee producer Sasini posted a first-half loss of 131.4 shillings [US$1 million], from a 40.7 million shilling pretax profit a year ago, hurt by slowing revenues. Weeks of drought in major growing areas had driven down tea output and processing factories were receiving fewer deliveries from fields each week.

[Reuters 14/05/15]

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COMMODITY NEWSTEA

Central/West AfricaProducers Avoiding Stock Build UpProducers report that demand levels remain only moderate with buyers concentrating on the most popular species. Sapele is back in demand and this has encouraged a rise in production but millers are careful to balance production with demand so as not to over produce and risk weakening prices. Other species for which demand is holding up are dibetou, belli and doussie. Buyers for the Chinese market are prepared to pay the asking prices for these species but have become very tough on specifications. Okoume remains out of favour with buyers for the Chinese market. Buyers say that okoume stocks in China are still high so they do not expect to resume any substantial new purchases of okoume logs or sawnwood for several months. Red species are in demand for Middle East markets but buyers have been negotiating hard on prices as there is strong competition in these markets from Malaysian timbers.

[ITTO 15/05/15]

Sipo Makes A Come-BackWhile sipo sawnwood prices are still soft due to poor demand, the fortunes of sapele have improved on the backof a modest improvement in interest from buyers. However, interest in the other red timbers has collapsed for now so producers are cutting back on milling of the redwoods to avoid a build-up of stocks. Buyers for the Chinese market are reported to have returned with steady purchases but of uninspiring volumes since the landed stocks in China are still above what the market can absorb. The Chinese economy is set to grow at a slower pace than over the past few years so it will take time for a new baseline to be established for volumes required in the housing and construction markets in the country. In response to the recent abrupt slowing in the economy analysts anticipate a wave of stimulus measures from the Chinese government which likely herald a period of volatility for West African exporters.

[ITTO 30/04/15]

Tight Supply Underpins Log PricesIn contrast to the slight fluctuations in sawnwood prices log prices have hardly been affected in the first months of the year. While demand is soft in the Chinese market producers say buyers are not pressuring for price reductions in the realisation that availability is an issue. Forest authorities through-out West and Central Africancountries have strengthened control of harvest levels and this, along with news of the tight log supply situation in SE Asia, is serving to support log prices. Middle East markets continue to be very price conscious and constantly looking for an opportunity to buy at the best price for their domestic market which remains healthy.

[ITTO 30/04/15]

Sawnwood Export SnapshotCameroon is the major supplier of sawn West African hardwoods to the EU but between 2011and 2014 has seen its market share drop by around 18%; Ghana too has seen sales to the EU decline over the same period. In contrast some other West African producer countries, notably Gabon, Côte d’Ivoire and Republic of Congo have achieved a growth in sawnwood sales to Europe.

[ITTO 30/04/15]

Satisfying ‘Due Diligence’ RequirementsAs countries in West and Central Africa negotiate VPAs with the EU trade is conducted based on meeting the “due diligence requirements of the EUTR. Producers are now becoming more confident that they can satisfy the documentary requirements of importers in the EU. The annual FLEGT Week was held last month and around 300 stakeholders representing EU member states, civil society, private sector, NGOs and experts met in Brussels to discuss progress on key topics such as forest governance, private sector engagement, drivers of deforestation and tracking timber legality. Participants contributed to setting new targets for the coming years, including the creation of synergies between FLEGT and other initiatives, and encouraging the private sector to participate in the debate on the legal and sustainable timber trade.

[ITTO 30/04/15]

For an overview of the event see:http://www.fao.org/forestry/43070-08caf09a8e1523414a77c298a5d976964.pdf andhttp://www.flegtweek.org/

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COMMODITY NEWSTIMBER

GabonSlow French Market And New Tariffs Hit African PlywoodTrends in EU imports of hardwood plywood from African countries varied widely in 2014. Imports from Gabon, by far the largest African supply country, declined 3% to 40,000 cu.m. A significant proportion of this product is FSC certified derived from large European-owned operations in Gabon. Demand was impeded by slow recovery in France, traditionally the main European market for okoume plywood. EU imports in 2014 were also disrupted by occasional strikes by customs officials at Libreville port in Gabon.

Gabon’s GSP status changed from 1 January 2014 leading to imposition of a 7% tariff on EU imports of hardwood plywood from Gabon. However, under pressure from EU-based plywood manufacturers, Gabon’s exports of hardwood veneers to the EU were exempt from the increase in duty. The overall effect of the new tariff regime is to favour EU-based over Gabon-based manufacturers. EU imports of hardwood plywood from Morocco declined sharply in 2014, continuing the downward trend of the previous year. Log export restrictions by Gabon and other countries in the Congo region have meant that Moroccan manufacturers now have limited access to logs. EU imports of plywood from Cameroon have climbed in the last 2-years, but were still limited at only 7000 cu.m in 2014. EU imports from Ivory Coast and Ghana were negligible in 2014. The majority of all African hardwood plywood imported into the EU is now destined for just 2-countries – Italy and the Netherlands – with smaller volumes destined for France, Belgium and Greece. European consumption of okoume plywood has been in long term decline, particularly in France, formerly the leading market. Imports into France were down 40% in 2014 at only 6000 cu.m. However imports into Italy were relatively stable, while there were small gains in imports by the Netherlands, Belgium and Greece.

Both EU manufacturers and importers reported slightly better demand for okoume plywood in 2014 than in the previous year. This was driven by slow improvements in the construction sector in the Netherlands and Belgium and by rising boat-building activity in Italy. Sales of okoume plywood – generally sold in euros unlike Asian plywood sold in US$ – also benefitted from the weak euro exchange rate during 2014. Another advantage is relatively short delivery time. Lead times for standard dimensions may be under 2 weeks. A growing share of supply and demand for okoume plywood in the EU market is FSC certified. With extremely tight margins in the industry, okoume plywood manufacturers were trying to push through price increases in 2014, but struggled in the face of weak European consumption and intense competition from alternative products. However, in early 2015 the market situation has been sufficiently favourable to allow manufacturers and distributors to push through limited price increases, particularly for FSC certified products.

[ITTO 30/04/15]

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Ghana Exports 27% lower in Q3 2014Contracts covering export shipments of 120,588 cu.m were approved by the Timber Industry Development Division [TIDD] of the Forestry Commission during Q4 2014. This represented a decline of 27% when compared to the volume approved for export in the third quarter of the same year. The main reason behind the decline in Q4 exports was the sharp fall in teak logs/billet exports where a 52% fall was recorded. Exports of plywood to the neighbouring West African countries and other international markets fell 9% and 20% respectively compared to Q3. An analysis of Q4 contracts showed that exports of all categories of wood products [primary, secondary and tertiary] fell from the previous quarter.

[ITTO 15/05/15]

Air Dry Sawnwood Dominates January ExportsThe Timber Industry Development Division [TIDD] of the Ghana Forestry Commission has just released the January export data which reported wood product exports for the month amounted to 25,720 cu.m valued at €12.61 million. Some 14 products were processed from 34 different species and were shipped by 99 exporters to 33 different countries. Air and kiln dried sawnwood, poles, plywood [for the regional market] and billets were the top 5 products exported in January. Compared to January 2014, the current export figures registered increases of 55% and 79% in volume and value respectively. But when compared to the previous month [December 2014] both the volume and values fell. African and Asian markets accounted for 67% of the total volume exported in January and the TIDD says average prices edged up in January. For 2014 exports of primary products accounted for approximately 24% of all exports while secondary and tertiary products accounted for 74% and 2% respectively. [ITTO 30/04/15]

Product Category Q3 exports cu.m Q4 exports cu.m Change %

Primary 40,090 27,573 -31.22

Secondary 122,319 90,444 -26.06

Tertiary 2,769 2,571 -7.15

Total 165,178 120,588 -27

Neighbouring Countries The Main Market For PlywoodWest African markets continue to be the major destinations for Ghana’s plywood. Of the 12,058 cu.m approved for export in 2014, 97% was destined for countries in the West African sub region with Nigeria being the major importer. Almost all the tertiary products, sliced veneer and kiln dried lumber were shipped to European markets. The United States continued to be an important market especially for mahogany and cedrella sawnwood and rotary peeled veneer. The Middle East and Egyptian markets emerged as major destinations for backing grade veneer. Little interest has been generated for any product other than teak sawnwood and logs and gmelina logs in India.

[ITTO 15/05/15]

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COMMODITY NEWSTIMBER

Guinea-BissauGuinea-Bissau To Review Timber Contracts Guinea Bissau is reviewing contracts including timber and mining signed by previous governments. The review aimed at diversifying investment in services such as maritime transport and telecoms, dominated by former colonial power Portugal.

[Africa Report 05/05/15]

MozambiqueMozambique Lifts Ban On LoggingThe governor of Sofala province, Helena Taipo, has lifted a logging ban and authorized the resumption of logging following a closed-door meeting with timber operators. Illegal logging had been rife, fuelled by poor law enforcement, endemic corruption, insufficient funding and incompetent leadership and thus a ban was imposed for Q1 2015 to eliminate such practices.

[APA 26/05/15]

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GeneralMOU Signed With Egyptian Tobacco CompanyThe 31st May marked the World No-Tobacco Day, where places all over the globe observed the occasion — including China. Indoor smoking and tobacco advertisements will be banned in public places in Beijing. This is part of new tobacco control regulations which come into force June 1st. Experts say China should raise the tax on cigarettes even further to reduce the use of tobacco. China has already increased its wholesale tobacco excise tax from 5% to 11% in early May, the first increase of the tax in 6 years. The global anti-smoking campaign is likely to adversely affect tobacco growers like Zimbabwe, Zambia and Malawi that depends on tobacco for more than a high proportion of its GDP. The ban, which will initially cover the capital Beijing and later go nationwide, will mean a ban on smoking in all indoor public places and this includes hotels, restaurants, bars, offices and other places. However China has 300 million smokers and tobacco revenues amounting to up to 10% of government revenues in 2013.

[CCTV 31/05/15]

MalawiMOU Signed With Egyptian Tobacco CompanyThe Malawi Government have signed a Memorandum of Understanding [MoU] with the Eastern Tobacco Company of Egypt for a cigarette manufacturing facility for local/regional sales. Malawi is the 12th largest producer of tobacco and the world’s leader in barley leaf.

[Nyasa Times 28/05/15]

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COMMODITY NEWSTOBACCO

Com-Watch - Issue 49 - June 2015.indd

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