KENYAN AVOCADO SECTOR GETS US$1MILLION BOOST FROM THE

NETHERLANDS Full Story On Page 20

AFRICACOM-WATCH

Cameroon Cocoa Grinder Purchases Down 17%

ISSUE 46 | MARCH 2015

Mali Cotton Industry Targets Production Of 800,000MT

KTDA & Dutch Development Bank Sign US$10m Tea Pact

09 18 25

Kenyan Avocado Sector Gets US$1Million Boost From the Netherlands

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Cameroon Cocoa Grinder Purchases Down 17%

09

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KTDA & Dutch Development Bank Sign US$10m Tea Pact

Mali Cotton Industry Targets Production Of 800,000MT

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AFRICACOM-WATCH

ISSUE 46 | MARCH 2015

Contents03 / General

05 / Cashew, Groundnut & Shea

07 / Cassava

08 / Cocoa

13 / Coffee

17 / Cotton, Textiles & Leather Goods

19 / Foodstuffs & Beverages

21 / Rubber

23 / Sugar

25 / Tea

27 / Timber

31 / Tobacco

Top Stories

News Headlines By RegionWestern AfricaCameroon: Grinder Purchases Down 17% By End-January / Bean Exports Up 10% By End January / Mid-February Farmgate Prices Rise / Tax Levies Raised On Cocoa & Coffee Exports / Sodecoton To Buy 266,400T In 2015 / Douala Port Introduces Emergency Measures / Inadequate Land-Side Infrastructure Pushes Up Transaction CostsCAR: Higher Production In CARCote d’Ivoire: Production Expected At 600,000 Tons For 2014-15 Season / Ivorian Cocoa Rejections Jump On High Acidity Levels / Main Crop To Equal Last Year’s / Ivory Coast Posts Record Harvest, Growers Windfall / Output Seen At 500,000T As Prices Draw Farmers / Mango Industry To Meet Global StandardsGambia: US$30 Million Invested In Groundnut SectorGhana: Power Outage Slows Cocoa Processing / Main Crop Purchases Down 23.9% / Ghana To Distribute 25 Million Seedlings / Ghana Ratifies ECOWAS-EU EPA / 2014 First 10 Month Export PerformanceGuinea-Bissau: EU Supports Cashew Sector Projects In Guinea-BissauLiberia: Rubber Exports Receipts Fall 10%Mali: Industry Targets Production Of 800,000MTNigeria: Targets US$2 Billion Cashew Nut Export / Midcrop Battles Amid Sparse Rains, Heat

Eastern AfricaEthiopia: Ethiopia-Djibouti To Establish Committee For Speedy Movement Of CommoditiesKenya: Government Plans To Revitalise The Coffee Sector / Gatundu South Coffee Factories To Merge / Avocado Sector Gets US$1Million Boost From the Netherlands / US$5 Million Bailout To Rescue Mumias Sugar / Kenya Seeks Extension of COMESA Sugar Safeguards / KTDA & Dutch Development Bank Sign US$10 Million Pact / Kenya Allocates US$4.9 Million For Tea FarmersMalawi: African Cassava Production Meeting / Alliance One Spends US$1 Million On Planting / ARET Introduces New VarietiesMauritius: 2014 Sugar Output Hit By Strike, Heavy RainsMozambique: Cassava To Be Produced On A Large Scale In InhambaneTanzania: Law On Commodity Exchange in Pipeline / Record Exports Despite Challenges / COSTECH Intervention In Mara Improves Cassava Farming / Board Projects Increased Output / Cotton Board Lowers Crop Forecast On Erratic Weather / Sugar Hoarding Creating Shortages / Despite Abundant Opportunities, Production Is Still MinimalUganda: Sharp Decline In Uganda’s Coffee Exports / New Coffee Policy

Southern AfricaSouth Africa: Industry Seen Losing US$81 Million From DroughtZambia: Cashew Nut Project Needs Over K20m / Zambia Sugar To Spend US$82 Million On RefineryZimbabwe: Government Introduces Penalty On Raw Hides Export / Tobacco Exports Fetch US$196 Million / Tobacco Selling Season Set to Begin in March / Premier Tobacco Faces Collapse

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

Rachel Bennett Dominic Rawle

Ethiopia/DjiboutiCountries To Establish Committee For Speedy Movement Of CommoditiesEthiopia and Djibouti have agreed to establish a joint committee to enhance the port and customs services in order to speed up transportation of commodities to Ethiopia. The committee will be made up of experts drawn from the revenues and customs, transport, maritime and logistics services of both countries. The establishment of the committee was part of the efforts of the 2-countries to get rid of unnecessary procedures which have led to the congestion of goods at the port of Djibouti. Various measures taken earlier to improve the process, including the opening of an office by the Ethiopian Revenues and Customs Authority in Djibouti and the establishment of a joint customs and border committee, had not had the desired results. The new committee will be searching ways to move Ethiopia’s import and export commodities quickly through the port.

[Ethiopia Government 18/02/15]

TanzaniaLaw On Commodity Exchange in PipelineThe legal framework for establishment of a commodity exchange market awaits cabinet approval before landing in parliament in the near future. The stakeholders, via the Capital Market and Securities Authority [CMSA] have completed drafting a bill seeking amending of the CMSA Act and presented it to the Ministry of Finance and Economic Affairs. On completion of the legislation procedures, Tanzania would host the first East African exchange market. President Jakaya Kikwete, the pioneer of the commodity 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. However, the road has been bumpy for lack of the law and regulations to support establishment and operations of commodity exchange.

Tanzania Commodity Exchange [TCX] was recently registered as a company and was now in the process of identifying a trading house. The trading office will be housed at LAPF building in Kijitonyama along New Bagamoyo Road. CMSA has also secured funds from the World Bank to train dealers/brokers and the process will start soon. The exchange will initially trade in 4-crops - cashew nut, coffee, cotton and rice which are currently traded under the warehouse receipt system.

[Daily News 20/02/15]

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COMMODITY NEWSGENERAL

Pan AfricaAfTra Approves US$1.4 Million To Support Value Chains DevelopmentThe Technical Review Committee of the Africa Trade Fund [AfTra], a trade-related technical assistance facility hosted by the African Development Bank, has approved US$1.4 million for 4-projects that will support trade development in Africa including value chain development, standards and tracking of goods.

African Cashew Alliance [ACA] To support cashew industries in East and West Africa by improving the product quality and market development, as well as the environmental standards and sustainability in cashew processing. It offers the chance for Africans to upgrade within the cashew global value chain. It also has an added focus of targeting women who will be supported to move up the value chain - from selling crops to local traders to processing them.

Apiculture Sector [Honey] Trade and Institutional Capacity Building will be implemented by SNV Netherlands Development Organization, Zambia to improve the capacity of traders, processors and producers of honey and bee products to comply with SPS measures - to upgrade within the honey global value chain by exporting table honey instead of bulk honey, thereby capturing more of the value.

African Organization for Standardization [ARSO] [Foods]

“Harmonization of African Standards for Agriculture and Food Products”, aims to provide coherent and systematic codes of practice for African food products. Harmonizing standards and codes of practice across African countries will provide a clear and predictable policy framework for regional trade so that institutions that facilitate exchange and mitigate the inherent risks associated with food production.

Regional Cargo Tracking System on the Northern Corridor

To assist the 6-member countries of Northern Corridor Trade and Transit Coordination Authority [NCTTCA], Burundi, DRC, Kenya, Rwanda, South Sudan and Uganda, prepare for the implementation of the regional electronic cargo tracking system. The study will also examine the required legal framework and establish other areas of policy intervention to make transit along the corridor more efficient, thereby improving intra-regional trade.

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Cote d’IvoireProduction Expected At 600,000 Tons For 2014-15 SeasonIvory Coast cashew nut output rose 14% to 560,000MT in 2014 from the previous year, in line with its future aim to become the world’s top producer. Just a decade ago, Ivory Coast was a middling cashew producer, growing around 80,000 MT of raw nuts per year. With output growing by over 10% annually, the sector has attracted the attention of a government desperate to jump-start its economy. That places Ivory Coast in second place after India. Ivory Coast is expected to produce 600,000 MT of raw cashew nuts during the 2014-2015 campaign – with 540,000 MT for export and 60,000 MT to be processed locally.

The quality of Ivorian cashews has improved due to a government reform that set a minimum price for farmers who received 127 billion CFA francs [US$219 million] for their cashews last season. The official opening of the 2015 cashew season was 20th February. The guaranteed minimum price is 275 CFA francs [US$0.48] per kilogramme. The price during the previous season was 225 CFA francs/kg.

Output has increased as new plantations planted in recent years are coming into production. For the country, which represents 20% of world production, it now remains to meet the challenge of transforming the raw material by creating similar infrastructure to that launched in Bouaké in October by the Cashew Savannah which transforms 20,000 MT per year.

[Reuters 19/02/15]

GambiaUS$30 Million Invested In Groundnut SectorGAMWORKS revealed during their Annual General Meeting that US$30 million was spent on enhancing value in the groundnut sector project. The Gambia Groundnut Corporation [GGC] groundnut project funded by the Islamic Development Bank [IDB] aims to modernize, expand and enhance the efficiency of the operations of the GGC to include improving processing facilities, groundnut river transport system, storage and handling infrastructure and shell waste management as well as technical assistance for supporting groundnut value chain and improving quality testing systems among others. A tripartite agreement has been signed between the Ministry of Finance and Economic Affairs, GGC and GAMWORKS for the implementation of the project.

[FOROYYA 03/02/15]

Guinea-BissauEU Supports Cashew Sector Projects In Guinea-BissauThe European Union [EU] plans to contribute €1.5 million for projects to improve the income of small cashew producers in Guinea-Bissau. The funds will support yield improvement, production quality, integration of activities of producers in the value chain, promoting local processing and improving management skills. This financial support is part of an integrated action programme for Nutrition and Agricultural Development [EU-AINDA].

[Macauhub/GW 11/02/15]

5

COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

NigeriaTargets US$2 Billion Cashew Nut ExportTo diversify the economy and move it away from over-dependence on oil, the Nigerian Export Promotion Council [NEPC] notes Nigeria is targeting the export of US$2 billion of cashew nuts over the next 2-years. A 4-year master plan is being developed by the agency to promote exports This is part of the Nigerian Industrial Revolution Master Plan to diversify the economy. Nigeria has already exported cashew US$106 million to Vietnam in 2014. The country hopes to scale up production and export its raw kernels as well as undertake further processing.

[Daily Independent 18/02/15]

TanzaniaRecord Exports Despite ChallengesCashewnut Board of Tanzania [CBT] notes 149,742 MT of raw cashew nuts worth US$225.5 million have been exported overseas during the 2014/15 agricultural season. The amount is part of 195,000 MT collected by farmers in their primary associations through the warehouse receipt system. This was a 28% increase on the 117,012 MT exported last season. Mtwara port shipped 74,056 MT while Dar es Salaam port has shipped 75,686 MT. Although the purchasing period has not yet ended, figures point to a significant increase in production of the cash crop. So far 195,000 MT has been collected, an amount never recorded since the country began producing the cash crop. This rise is attributed to better distribution of crop inputs to farmers and their willingness to apply better agricultural techniques including proper conservation methods such as drying, seasoning and grading before transporting them to the warehouses. The price of cashew in this season’s auction was between 1,440/- and 2,200/- per kg compared to last season’s price of between 1402/- and 1723/-.

[Guardian 09/02/15]

ZambiaCashew Nut Project Needs Over K20mWestern Cashew Nut Industries requires K22 million to invest in the plantation of 2.7 million new cashew trees in order to harvest 13,500 MT of nuts per annum. The project is expected to generate K133 million p.a if global price of cashew nuts remain constant at US$7-10/kg. The project is scheduled to start this month and anticipated to take 2- years to materialise.

The Citizens Economic Empowerment Commission [CEEC] under the industrial clusters and value chain programme gave the firm a K2.8 million loan to buy equipment and assets from the defunct Zambia Cashew Nut company. The company, which has a factory and 2,000 ha of plantation in Mongu, also has plantation in Lukulu and Senanga with an area of 1,000 and 600 ha respectively. In Kalabo, the hectarage is 140 ha bought from CEEC funding.

[Daily Mail 02/02/15]

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MalawiAfrican Cassava Production Meeting Representatives of 5-African countries are in Malawi to interact with local entrepreneurs and experts to explore business prospects in the cassava production and processing. The countries include Kenya, Nigeria, Ghana, Tanzania and Uganda. The team aims to significantly boost the incomes of small-scale African cassava farmers by linking them to new markets. A survey is currently underway to assess the cassava market base in the 5-countries and business prospects across the continent. There are challenges which include low knowledge on production among small holder farmers, which in turn is also influencing a drop in the yields. Financing also remains a challenge.

[APA 19/02/15]

TanzaniaCOSTECH Intervention In Mara Improves Cassava FarmingInterventions by the Tanzania Commission for Science and Technology [COSTECH] against Cassava Mosaic Disease [CMD] and Cassava Brown Streak [CBSD] which ravaged farms in Mara Region last year has paid dividend. The involvement has seen Mikocheni Agricultural Research Institute [MARI] produce 160,000 clean cassava varieties free from diseases, that will now be distributed to affected farmers in the region with the support of Bill & Melinda Gates of US.

[Daily News 15/02/15]

MozambiqueCassava To Be Produced On A Large Scale In InhambaneThe Dutch Agricultural Development & Trading Company [Dadtco] is to sign an agreement with the International Fertiliser Development Centre [IFDC] aimed at large-scale cassava production in Inhambane province. The partnership, since 2001, has processed cassava produced by small Mozambican farmers into cassava cake, a product used by Cervejas de Moçambique to produce beer. Impala beer is one of the most popular in Mozambique and its success required cassava cake production to double in H2 2014. Currently, Dadtco gets cassava from 6,000 small farmers in Nampula and Inhambane. In 2012 the IFDC, through government funding from the Netherlands, created a public-private partnership [PPP] to support small cassava farmers, with the distribution of improved cassava planting material from the Mozambique Agrarian Research Institute and training of farmers in improved practices.

[Macauhub/MZ 18/02/15]

7

COMMODITY NEWSCASSAVA

GeneralCocoa Hits 1-Year Low On Weak Demand, Strong Arrivals Cocoa futures on ICE fell to their lowest level in more than 1-year, weighed down by weak demand and stronger-than-expected port arrivals in top grower Ivory Coast. Exporters estimated around 48,000 MT of cocoa beans were delivered to Ivory Coast’s two ports of Abidjan and San Pedro between Jan. 26 and Feb. 1, up from 30,000 tonnes during the same period last year. For the season-to-date, cocoa arrivals reached around 1,093,000 MT by Feb. 1, virtually unchanged from 1,097,000 MT in the same period of the previous season. These rather positive deliveries and the very weak data on demand are weighing on cocoa prices. As well as a weak Q4 grind from Europe, North America and Asia. ICE March New York cocoa hit US$2,677 a tonne on February 2nd its weakest level since January 2014.

[Business Recorder 02/02/15]

Cargill And Mondelz Sign Agreement To Support Sustainable CocoaCargill has signed a formal partnership agreement to support Mondelz International’s Cocoa Life program, which strengthens both companies’ commitment to improving the livelihoods of cocoa farmers and to investing in a sustainable future for cocoa. Mondelz International’s Cocoa Life program shares several similarities with Cargill’s own Cocoa Promise program, as each initiative is focused on developing a cocoa supply chain that enables farmers to achieve better living standards, and on delivering a sustainable supply of cocoa and chocolate products. Under this agreement, Cargill Cocoa Promise activities, which include farmer training, community support and farm development, will support Mondelz International’s goal to reach more than 200,000 farmers in cocoa growing regions and to ultimately source 100% of its cocoa from sustainable sources.

[PR Newswire 19/02/15]

8

COMMODITY NEWSCOCOA

CameroonGrinder Purchases Down 17% By End-JanuaryCameroon’s cocoa grinders purchased 24,855 MT of beans by the end of January, down 17% on the same stage of last year. The National Cocoa and Coffee Board [NCCB] noted Sic-Cacaos, a subsidiary of Swiss chocolatier Barry Callebaut, bought 2,235 MT in January, having bought none in December. This was an increase from 1,983 MT for the same month the previous season.

The business is the leading processor and total purchases since the start of the 2014/15 season on Aug. 1 stand at 23,434 MT. The only other grinder, Chocolaterie Confiserie du Cameroun [CHOCOCAM], an affiliate of South Africa’s Tiger Brands , bought 423 MT in January, up from 345 MT in December.

Purchases for the 2014/15 season hit 1,421 MT. Both companies have declared plans to extend their markets in the coming years, with Sic-Cacaos selling to West Africa and CHOCOCAM to all the countries of the CEMAC sub-region.

[Reuters 19/02/15]

Bean Exports Up 10% By End JanuaryCameroon exported 146,893T of raw beans in the season to the end of January, about 10% more than at the same stage last year, statistics from the National Cocoa and Coffee Board [NCCB] showed. Cameroon shipped 30,942 MT in January, down from 42,668 MT in December 2014 but up from 27,720 MT for the same month a year ago.

The season runs from Aug. 1 to July 31, with the main crop harvest from October to January/February and the light crop harvest from April/May to June/July. 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.

[Reuters 20/02/15]

Mid-February Farmgate Prices RiseCocoa farmgate prices in Cameroon, Africa’s fourth-largest grower, have risen as the main harvest ends with few crops on the market. A kilogramme of cocoa is being sold at 1,375 CFA francs, up from 1,235 CFA francs last month in the Centre Region according to the Cameroon Cocoa and Coffee Farmers Association [APCCC]. APCCC also fears that 5-10% of the crop could be destroyed by the capsid disease before the mid-harvest period kicks off due to the long dry season.

[Business Recorder 18/02/15]

Tax Levies Raised On Cocoa & Coffee ExportsSince the start of the 2014-2015 cocoa and coffee seasons, Cameroon has been imposing tax levies on cocoa and coffee respectively at rates of 150 FCFA and 100 FCFA per kilogramme. This tax levy was previously only 54 FCFA. This amounts to a 200% increase on cocoa and a 100% increase on coffee.

Collections are estimated at 31 billion FCFA in 2015 and 35 billion FCFA for 2016. These funds will be paid over to the Cocoa and Coffee Sectors Development Fund [FODECC] towards the cocoa-coffee re-launch plan adopted by the government on September 30, 2014.

[Business In Cameroon 11/02/15]

9

COMMODITY NEWSCOCOA

Cote d’IvoireIvorian Cocoa Rejections Jump On High Acidity LevelsExcessive acidity in cocoa beans arriving at ports in top grower Ivory Coast has led to the rejection of around 33% of deliveries in recent weeks. High rejection rates is likely to lead to the double counting of trucks entering export facilities potentially inflating arrivals’ estimates. The level of Free Fatty Acid [FFA] levels is above accepted levels. The European Union has set a ceiling for FFAs in cocoa beans of 1.75% oleic acid equivalent. However, trucks arriving at the ports of Abidjan and San Pedro contained beans with levels up to 4%. In some cases exporters have seen one in three trucks rejected since Feb. 1. There is debate within the industry over what causes high FFA levels, which erode the quality of cocoa butter. Dry weather, exposure to black pod disease, and whether beans are broken are all believed to have an effect on FFAs. Stored beans also tend to have higher FFA levels. Ivory Coast is in its mid-November to March dry season, which this year has been marked by very little rainfall, high temperatures and unusually harsh Harmattan winds.

[Reuters 13/02/15]

Main Crop To Equal Last Year’sIvory Coast’s October-to-March main crop cocoa harvest will likely equal that of last year, falling short of farmer and exporter expectations due to problems with disease, rainfall and a harsher than expected Harmattan desert winds and a drop in smuggling from neighbouring Ghana. The cedi currency of Ghana, the world’s number 2 producer, plummeted in the early months of 2014, creating a discrepancy in the price it paid its cocoa farmers and the amount received by growers in Ivory Coast. As Ghanaian farmers began selling their beans across the border to take advantage of the higher price there, exporters and analysts estimate that 60,000 to 100,000 tonnes of cocoa were trafficked into Ivory Coast. Ghana set a higher farmer price at the start of the 2014/15 season though and the central bank has managed to stabilise the cedi, meaning little smuggling has been recorded this season.

Ivory Coast, the world’s top producer, had a record output of 1.7 million MT of cocoa last year, due mainly to an exceptionally large April-to-September mid-crop. Around 1.2 million MT of beans were harvested during last season’s main crop. Output this season has got off to a slow start this season, due partly to outbreaks of black pod disease caused by heavy rains in August and September as well as insect infestations. Many exporters had counted on a strong second half to the main crop to close the gap on last season and arrivals have indeed outstripped 2013/14 levels in recent weeks.

Exporters estimated that 1,093,000 MT of beans were delivered to ports by Feb. 1 since the start of the season on Oct. 1, virtually unchanged from 1,097,000 MT in the same period of the previous season. This season’s April-to-September mid-crop is widely expected to fall well short of last season. And hopes that a strong end to the 2014/15 mid-crop would offset the anticipated weaker arrivals later on have been dashed by the negative impact of the seasonal Harmattan winds. Analysts had expected 250,000 MT of arrivals in February and March, but given the situation in the fields, that has been revised to around 130,000 MT.

[Reuters 09/02/15]

Ivory Coast Posts Record Harvest, Growers Windfall Ivorian cocoa farmers enjoyed a 20% boost in revenues thanks to a record harvest last year worth US$2.26 billion. The nation’s 2013-14 cocoa crop produced a record 1.74 million MT at a fixed price of 750 CFA francs/kg [US$1.29]. The cocoa commodities market soared to 3.5-year peaks last September on worries that the Ebola virus could hit output in Ivory Coast and Ghana. Ivory Coast produces more than 35% of the world’s cocoa. The crop represents 22% of GDP and 50% of its export revenue, according to the World Bank. The guaranteed price is slated to rise by 13% for the 2014-15 season to 850 CFA/kg [US$1.47]. A 3-year reform of the cocoa sector has improved fortunes of cocoa farmers.

[Mail 02/02/15]

10

GhanaPower Outage Slows Cocoa Processing The Cocoa Processing Company [CPC] is currently halting production for at least 2-days every week due to the persistent power outage. Generators were deemed too expensive. CPC has an annual throughput of 64,500 MT of premium Ghana cocoa beans. It processes the beans into semi-finished products such as cocoa liquor, cocoa butter, cocoa cake and cocoa powder for export. COC also produces chocolate products including drinking chocolate and spread under the Golden Tree Chocolate brand name.

[GNA 16/02/15]

Main Crop Purchases Down 23.9%Cocoa purchases declared to industry regulator Cocobod reached 494,960 MT by Jan. 29 since the start of the main crop, down 23.9% from Jan. 30 last year. Cocobod is conducting a field trip to assess the crop and will decide in coming weeks whether to lower its annual output target. The purchases, which covered 17 weeks of the main crop season, were lower than the 650,852 MT recorded for a period that ended Jan. 30 last year. Ghana aims to buy at least 850,000 MT of cocoa in the 2014/15 crop year which is expected to end in September.

[Reuters 10/02/15]

Ghana To Distribute 25 Million SeedlingsThe government is to supply 25 million cocoa seedlings to farmers in the Brong-Ahafo Region. In addition, it will also provide the farmers with fertilizers and other agricultural inputs free of charge in the 2015 cocoa season.

[Spy Ghana 05/02/15]

NigeriaMidcrop Battles Amid Sparse Rains, HeatNigeria’s midcrop cocoa harvest is threatened by sparse rains and a heat wave in the main producing region in the southwest. Lack of rains in January were inadequate to create the moisture needed for flowering and fruiting in the southwest region which accounts for 70% of national output. The current weather, dictated by north-south winds from across the Sahara Desert, will probably continue until the end of March.

[Bloomberg 19/02/15]

11

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 Feb 15 1948.10 2744.64 1873.67 2677.00

3 Feb 15 1970.43 2778.00 1888.33 2703.67

4 Feb 15 1982.10 2807.45 1898.33 2730.67

5 Feb 15 2003.74 2836.56 1911.67 2753.33

6 Feb 15 2017.48 2859.43 1933.33 2773.33

9 Feb 15 2082.15 2934.81 1981.33 2858.00

10 Feb 15 2080.92 2929.14 1970.00 2856.00

11 Feb 15 2092.53 2948.10 1984.33 2877.33

12 Feb 15 2121.49 2993.47 1990.33 2928.00

13 Feb 15 2114.02 2992.40 1992.67 2921.67

16 Feb 15 2094.17 2964.29 1958.00 2921.00

17 Feb 15 2101.09 2976.25 1978.00 2920.33

18 Feb 15 2125.05 3003.93 1984.67 2949.00

19 Feb 15 2119.76 3000.14 1982.33 2941.33

20 Feb 15 2134.90 3013.09 1996.67 2959.00

23 Feb 15 2152.99 3037.07 2003.00 2980.00

24 Feb 15 2160.58 3049.79 2011.00 2997.00

12

GeneralAfrica Coffee Fund Proposed To Boost Production Africa’s 25 coffee-producing nations are being asked to support a new fund proposed by the African Development Bank [AfDB] and Inter-African Coffee Organization [IACO] to boost output of the crop across the continent. The fund will provide training and improve the financial literacy of farmers to make production more sustainable and profitable. IACO is also promoting the formation of viable farmer groups to improve productivity. With average productivity across the continent one-third of that in Asia and South America, the potential for boosting farmers’ incomes is high.

[Bloomberg 13/02/15]

13

COMMODITY NEWSCOFFEE

12th African Fine Coffee Conference and Exhibition More than 1,000 global coffee producers met in Nairobi, Kenya, on February 12-14th to address the challenges facing the coffee value chain and, particularly, the dipping production levels. The 12th African Fine Coffee Conference and Exhibition [AFCC & E] is Africa’s leading platform for gathering valuable coffee information, building trade relations and buyer and seller interaction. The meeting comes as African coffee industry, whilst rich in variety of coffees, has struggled tremendously to gain back the influence it enjoyed in the early 1970s within the coffee producing world. Overshadowed by South American and Asian producers, its mark and significance has often been under looked on the world stage. The meeting reviewed ways of increasing coffee productivity.

All the continent’s coffee producers except Ethiopia and Uganda have witnessed dramatic declines in coffee production in the past 2-decades or so. Africa Fine Coffee Association [AFCA] noted the decline in production is against a backdrop of an increase in world coffee consumption which is growing at an average of 2%. It is therefore critical for African coffee producing countries to increase their productivity and quality of their coffees to ensure that farmers realize higher incomes. Latest figures indicate global coffee production is 147 million bags annually with Africa’s production standing at 19.1 million bags. The continent’s share in world coffee production has declined from a high of 25% in 1988 to the current average of 14%. The continent’s biggest producer is Ethiopia, whose annual production is approximately 450,000 MT while Uganda produces at 220,000 MT.

[Xinhua 09/02/15]

Mondelez Seeks To Boost African Coffee Production 50% By 2017Mondelez International Inc., the maker of Oreo cookies and Ritz crackers, is seeking to boost African coffee output 50% by mid-2017 as part of a US$200 million global program aimed at farmers. The project, called Coffee Made Happy, began this month in Africa with assistance for 24,000 Ethiopian small-holder farms. The program will be extended to other East African nations. The initiative gives training in agronomy, financial literacy and promoting coffee farming to youth and women. It plans to reach 1-million farmers worldwide over the next 5-years. Mondelez wants to do is move away from just certification and paying premiums for certified crop. Mondelez buys from African nations including Ethiopia, Tanzania, Rwanda, Burundi and Kenya and sells about 80% of its products outside North America as the stronger dollar increases domestic costs and lowers the value of international revenue. The company buys about 5% of all the coffee produced globally.

[Bloomberg 19/02/15]

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Kenya Government Plans To Revitalise The Coffee SectorKenya has put in place measures to double coffee production in the next 5-years so that it can increase output from the current 50,000 to 100,000MT. Kenya’s coffee production peaked in 1988 when it produced 130,000MT. Kenya aims to achieve this goal by increasing growing acreage as well as access to high yielding coffee seeds and is to roll out the implementation of the Integrated Coffee Productive Program [ICPP]. The ICPP encourages coffee farmers to “double up” on their available land by growing other crops alongside coffee as well as providing extension services such as modern husbandry training. This will ensure diversification of revenue so that farmers are cushioned when the price of coffee is low.

US$55 million has been set aside from the commodities fund to give farmers, producers and suppliers access to low-credit loans in a bid to advance the industry. Another challenge facing the sector is the high cost of production. Coffee farmers are now eligible for subsidized fertilizers so as to reduce the cost of this critical input. Kenya’s national development blue print Vision 2030 recognizes coffee as one of the critical sub-sectors under the agriculture sector to include streamlining the institutional, legal and policy framework, infrastructure improvement and implementation of a credit access framework.

[Coffee Press 15/02/15]

Gatundu South Coffee Factories To MergeAll 12 coffee factories in Gatundu South constituency will merge to form one union to address disparities in coffee prices and give farmers more bargaining power. The CDF will finance the construction of the union headquarters and called on the management of coffee factories to put in place panels to streamline coffee farming to reduce the cost of production and earn more from the crop.

[Star 11/02/15]

TanzaniaBoard Projects Increased OutputCoffee harvests in Tanzania are projected to increase in the 2015 season to more than 60,000 MT, up from 40,000 MT in the previous season, the Tanzania Coffee Board [TCB] has said. TCB projects the 2014-15 harvest will be better than last year, partly due to improved agricultural practices within the country and good rains. Tanzania, is Africa’s fourth biggest coffee producer, after Ethiopia, Uganda and Ivory Coast. TCB expects global coffee prices to stabilize after increasing from US$2.5/kg to US$4/kg.

[Daily News 19/02/15]

15

COMMODITY NEWSCOFFEE

UgandaSharp Decline In Uganda’s Coffee ExportsCoffee is Uganda’s leading export commodity, but unfortunately has been in decline over the last year. The latest report from the Uganda Coffee Development Authority [UCDA] indicates that for the year between December 2013 and December 2014, the country exported some 3.5 million bags with a value of US$430 million. This represents a drop of nearly 5% in volume and just over 6% of revenue when compared to previous periods. To compound matters, exports for December last year dropped by 13% compared to the same month in 2013. The decrease was down to a prolonged dry spell and Black Twig Borer which continues to be a major threat to Robusta growing regions. In an effort to minimise the risk posed by the borer, the UCDA are expected to be distributing chemicals to tackle the pest.

[World Coffee Press 06/02/15]

New Coffee PolicyGovernment is to implement a new policy to develop the coffee sector. Coffee is an important cash crop and a source of income, which makes it essential to have clear and strong policies, regulations and strategies. The policy will guide the various activities in the sector, and ensure quality along the value chain. Focus will be on the need to improve extension services and put in place effective mechanisms to boost research, as well as develop technologies that can help increase production. The policy also provides a framework on how to improve and respond to demand on the international market through more enhanced processing and marketing strategies by the private sector. The policy will also streamline the operation of washing stations and ensure farmers work in a more organised manner. There are currently 229 coffee washing stations across the country and the number could be increased once the policy is implemented.

[Spy Ghana 10/02/15]

16

GeneralICAC: World Cotton Output To Drop 6%The International Cotton Advisory Committee [ICAC] has projected world cotton output would drop 6% to about 25 million MT in 2016 as farmers shift focus to crops such as maize and soy whose prices are now firming. Global cotton hectarage is also expected to tumble 6% next season due to persistently lower prices on the global market.

[ICAC 20/02/15]

CameroonSodecoton To Buy 266,400T In 2015Société de Développement du Coton [Sodecoton] intends to buy 266,400T of cotton from 250,000 farmers and has raised for this purpose 36.5 billion FCFA via a pool of 5-local banks on January 27th for the current cotton season. The bank loan will facilitate the payment of farmers a week after their harvest has been sold to Sodecton, compared to the previous 3-month delays. These extended delays combined with unattractive prices led Cameroonian farmers to sell their produce to neighbouring Nigeria despite receiving loans from Sodecoton. This practice often compromised local production, creating considerable losses in revenue for Sodecoton.

[Business In Cameroon 03/02/15]

Cote d’IvoireOutput Seen At 500,000T As Prices Draw FarmersIvory Coast expects to produce around 500,000T of unginned cotton in the upcoming 2015/16 season as attractive prices lure farmers back to the sector. Ivory Coast produced 405,000T of cotton in the 2013/14 season and is on track for around 450,000T this season. According to the ginners association if enthusiasm is maintained, production will be around 500,000T next season placing the nation as a leader in Africa.

Cotton production is rising across West Africa as governments set high prices to draw farmers back to a regional sector that once grew 15% of the world’s cotton but was decimated by a market crash in the early 2000s. Ivory Coast is now the region’s third biggest producer behind neighbouring Burkina Faso and Mali.

[Reuters 12/02/15]

17

COMMODITY NEWSCOTTON, TEXTILES & LEATHER GOODS

MaliIndustry Targets Production Of 800,000MTMali’s state-owned textile development company Compagnie Malienne pour le Développement du Textile [CMDT] announced its target cotton production will be 800,000MT by 2018. Last season, Mali produced a 552,000MT. Mostly figures are dependent on rainfall received. Mali’s cotton industry is rather well-organized and produces some of the world’s highest quality crops. However investment is needed in storage to ensure quality is preserved in the event of bottlenecks in the system and maintain prices. CMDT is very keen to expand acreage and meet those ambitious targets for the coming years. Meanwhile cash generated by CMDT’s forward-sales of cotton is used for key inputs, such as fertilizers, that are applied to promote both cotton and food crops. Mali’s cotton is exposed to the volatility of world prices and subsidies in nations like the U.S. Because it is exported in a largely unprocessed state, there is even more exposure. At present there is not a great deal of value-added potential. Currently, Malian cotton undergoes very basic processing, ginning the cotton and exporting cotton fibre and cotton lint.

[AFK 16/02/15]

TanzaniaCotton Board Lowers Crop Forecast On Erratic WeatherCotton production in Tanzania, East Africa’s biggest producer of the crop, fell 19% short of the country’s target after farmers used less pesticides and high quality seeds. Output in the marketing year that started July and runs through June is estimated at about 202,000MT, compared with the target of 250,000MT set in June, according to the Dar es Salaam-based Tanzania Cotton Board [TCB]. The target set in June replaced an initial goal of 287,500 MT after erratic weather affected the crop. Last season’s harvest was 246,000 MT. There’s no forecast yet for the next marketing year. Tanzania is Africa’s fourth-largest producer of the crop after Mali, Burkina Faso and Egypt. It exports the bulk of its crop to China, Indonesia, Thailand, Kenya, Bangladesh, Vietnam, Thailand, Malaysia and India.

Production in Tanzania has been faced with low productivity, poor quality and a low level of mechanisation where farmers opted for alternative cash crops such as tobacco and onions. Among the problems, according to the TCB, include uncertified cotton seeds, farmers using little or no fertilisers coupled with little utility of pesticides and lack of farming machinery as the main reasons for stagnating cotton yields in the country. TCB believes if its efforts of raising production to 1500kg per acre of land is achieved, then the country should move forward. Cotton production surged 57% last year from 225,000MT produced in 2011, helped by the introduction of contract farming across the country following a 3-year pilot programme in Mara Region. Under the system, farmers agreed with buyers to supply specific quantities and qualities of the crop, and farmers gained access to credit for inputs such as pesticides.

[Guardian 06/02/15]

18

RegionalUS$3.3 Million Rice Production GrantNigeria, Burkina Faso, Ghana and Tanzania are to benefit from the US$3.3 million grant provided by Bill and Melinda Gates [BMGF] and the German Development Cooperation [BMZ], under their Competitive African Rice Initiative [CARI] project. The implementing institutions of the grant are led by GIZ, Technoserve, the John A. Kufuor [JAK] and Kili Trust [KT]. The project, which will end in 2017 is targeting 120,000 small scale rice producers.

[This Day 10/02/15]

Cote d’IvoireMango Industry To Meet Global StandardsThe Government is to support the mango industry with a budget of FCFA1.7 billion [US$3.4 million] to ensure international standards are met. According to the Minister of Agriculture, Mamadou Sangafowa Coulibaly, the amount is aimed at intensifying the fight against fruit fly as mangoes are faced with the threat of a ban by the European Union. Annual production of mango is estimated at 100,000T with 20,000T exported. Mango is the third export fruit of Côte d’Ivoire, after bananas and pineapple. These 3 contribute 3-4% of GDP and between 8 -10% of agricultural GDP. Average yields reach 4T/ha. Côte d’Ivoire has doubled its mango exports over the last 3-years, whose main destination is the European market. Exports were 10,179T in 2011 rising to 20 475T in 2014.

[16/02/15]

19

COMMODITY NEWSFOODSTUFFS & BEVERAGES

KenyaAvocado Sector Gets US$1Million Boost From the NetherlandsPromoting the avocado sector will generate new export revenue for Kenya according to the International Trade Centre [ITC]. A US$1 million project to enhance the competitiveness of the avocado sector was launched in Nairobi on 2nd February financed by the Netherlands Trust Fund [NTF] III programme through the Centre for the Promotion of Imports from Developing Countries [CBI]. The move aims to capacitate farmer groups through technical and hands-on training to assist them in quality compliance with certifications required to export their products. This project, which will run until July 2017, will see exporters learn about export planning, development; marketing; utilising trade information; and quality management. The project is implemented in collaboration with the Horticultural Crops Directorate, Export Promotion Council of Kenya and the Fresh Produce Exporters Association of Kenya.

[ITC 02/02/15]

ZimbabweGovernment Introduces Penalty On Raw Hides ExportGovernment has imposed a penalty on the export of raw hides to encourage value addition and beneficiation. This is in line with the provisions of Zim-Asset’s value addition and beneficiation cluster. Dealers exporting raw hides would be levied US$0.75 /kg of hide. The Cold Storage Company used to have a wet glue factory in Bulawayo that enabled abattoirs to process their hides before they were sold. The facility is no longer functional. According to Zim-Asset, the value addition and beneficiation strategy is anchored on the private sector taking a key role in the funding and execution activities contained in the blueprint with Government providing the support including establishing agro-processing projects, apiculture, processing and canning of fruits and vegetables, oil expression, leather and leather products. Government was about to finalise the livestock policy document that would guide the livestock industry.

[The Herald 01/02/15]

20

LiberiaRubber Exports Receipts Fall 10%According to the Central Bank of Liberia’s [CBL] quarterly Finance and Economic Bulletin for July to September, there was a decline in rubber export earnings by 10.9% to US$22 million at the end of the review quarter, from US$24.7 million at the end of the preceding quarter.

CBL noted the decline was driven by both domestic and external factors citing the ongoing Ebola Virus Disease crisis which greatly affected production. Furthermore increasing rubber supply on the global market in the face of weakening consumption demand across major markets mainly China and the Eurozone continues to drive the downward spiral in rubber prices. Average quarterly rubber price declined by 13% to US$1,837.7/MT at the end of the quarter from US$2,118.3 recorded at end-June while year-on-year, rubber price fell by 29%.

[Inquirer 01/02/15]

21

COMMODITY NEWSRUBBER

22

KenyaUS$5 Million Bailout To Rescue Mumias SugarKenya’s government will inject US$5.5 million [Sh500 million] to bail out cash-strapped Mumias Sugar which accounts for close to a third of Kenya’s annual sugar production. As part of the bailout, the government would seek to change the company’s management. Mumias posted a loss before tax of US$38 million [Sh3.4 billion] in 2014 compared with a loss of Sh2.2 billion the previous year blamed on weaker sugar prices.

[Ventures 30/01/15]

Kenya Seeks Extension of COMESA Sugar SafeguardsThe government is seeking a further extension of Common Market for Eastern and Southern Africa [COMESA] safeguards on sugar as the current one expires on February 28, potentially exposing local millers to an influx of cheaper imports. The state is engaging with key decision makers, including the COMESA governing council, to secure the third extension. It is unclear on the duration of the extension and the likelihood that the request will be successful.

The COMESA safeguards allow Kenya to maintain a 350,000-tonne ceiling on duty-free sugar imports from within the trade bloc. The country’s sugar sector is ailing, with millers facing issues of cane supply shortage as varieties take a long time to mature and are rain-fed, rampant cane poaching and general mismanagement. This has led the state to turn to policy interventions to keep the sector afloat as cheaper imports would impact state-run millers, and those that it partially owns such as Mumias Sugar.

Last year, the government said the safeguards would help the privatisation of 5-state-owned millers to return them into profitability, but little has moved since the extension was granted. Millers include Nzoia, Sony, Miwani, Mohoroni and Chemilil. Mumias Sugar, which was partially privatised through sale of a stake on the Nairobi Securities Exchange in 2000 has returned into the red. Kenya reported net losses for the second year in a row for the period ended June 30, 2014, and is now seeking state intervention to rescue it from debts.

[Star 03/02/15]

Mauritius 2014 Sugar Output Hit By Strike, Heavy RainsMauritius estimated sugar production for 2014 fell 4% compared to forecasts blaming a workers strike and heavy rains for disrupting the harvest. Sugar accounts for roughly 1.2% of the state’s US$10 billion GDP. 2014 sugar output was estimated at 400,000T in 2014 down from a previous forecast of 415,000T. The harvest season, which typically extends from June to December, was affected when around 4,000 sugar workers stopped work last November demanding more pay and then further disrupted by heavy rains in the first weeks of January. Mauritius sugar producers also saw profits fall last year after global prices dipped due to a huge overhang of stocks after 4-straight years of surpluses. Meanwhile Mauritius sugar producer Alteo’s pretax profit rose 16.7% to MUR1.041 billion [US$31.35 million] boosted by a one-off disposal of a 50% stake it held in Anahita Hotel, a resort on the east coast for MUR926 million.

[Reuters 13/02/15]

23

COMMODITY NEWSSUGAR

South AfricaIndustry Seen Losing US$81 Million From DroughtDrought in South Africa’s main sugar-producing region may cost the industry US$81 million. Losses are expected to total R920 million amid output cuts of as much as 60% this season if some areas of the KwaZulu-Natal province don’t get enough rain. The South African Cane Growers’ Association noted the government has declared disaster areas in nine of 11 districts in KwaZulu-Natal, where more than 80% of the nation’s sugar is produced. The South African Sugar Association [SASA] trimmed its forecast for production this season to 2.11 million MT from a December prediction of 2.12 million MT. The cane-output estimate was cut to 17.7 million MT from 18.1 million MT.

[Bloomberg 05/02/15]

TanzaniaSugar Hoarding Creating Shortages

The Agriculture, Food Security and Co-operatives has directed sugar manufacturers and importers to distribute the stocked sugar in the market in order to do away with shortages. The trend of hoarding the commodity in the warehouse creates artificial shortage which gives room to an increase of sugar price in the market. The directive comes as consumers complain of price increases from 1,700/- to 3,000/- per kilogramme attributed to abrupt sugar shortage after the government announced control and banned importation of the commodity. The government in collaboration with the stakeholders will import 100,000T of sugar in a bid to curb the shortage which occurs annually when the sugar factories are closed for maintenance and will issue an import licence of 100,000T in March. According to Tanzania Sugar Board [TSB], Tanzania imported a total of 41,858T in 2012/13 year and 182,845.39T in 2011/12.

In January during the National Assembly, the Deputy Minister for Agriculture, Food Security and Cooperatives, Mr Godfrey Zambi, said the country will not import sugar for domestic use as advised by the Technical Advisory Committee on Sugar Importation which falls under Tanzanian Sugar Board [TSB]. Smuggling of sugar into the country, dumping of the sweetener in the local market meant for transit as well as industrial sugar being sold to people, are among challenges facing the industry. Parliament was told that the committee had recommended only importation of industrial sugar in which 182,765T are to be imported to be used for industrial production.

Demand for sugar in Tanzania stands at 420,000 and 170,000T/yr for domestic and industrial sugar respectively - a total of 590,000T/yr. Yet local industries can only produce 300,000T leaving a shortage of 290,000T for domestic and industrial use. Of the 290,000T, 120,000T are for domestic use and 170,000T for industrial production. Privatisation of sugar industries namely Kagera, Mtibwa, TPC and Kilombero between the year 1998 and 2000 has helped boost production from just 98,000T in 1998 to 300,000T at present.

[Daily News 13/02/15]

ZambiaZambia Sugar To Spend US$82 Million On RefineryAfrica’s top cane producer Zambia Sugar plans to spend US$82 million to construct a refinery that would double its annual refined production as well as make other factory improvements. The unit of South African sugar producer Illovo noted the refinery would more than double refined output capacity to around 100,000 tons from 420-450,000T. The facility at its Nakambala sugar operations, in the town of Mazabuka,.expects to up and running by May 2016. Zambia Sugar said the project would be financed through debt raised mostly in Zambia and the company’s own cash resources.

[Business Report 18/02/15]

24

KenyaKTDA & Dutch Development Bank Sign US$10 Million Pact Tea farmers have secured US$10 million from Dutch development bank, FMO, to expand and diversify their business enterprises. FMO and the Kenya Tea Development Agency Holding Ltd [KTDA] inked the deal in Nairobi that will allow the over 560,000 small scale tea farmers access affordable credit facilities from KTDA subsidiary, Greenland Fedha, to invest in their enterprises.

[KBC 02/02/15]

Kenya Allocates US$4.9 Million For Tea Farmers The Kenyan government announced a US$4.9 million fertilizer subsidy for small scale tea farmers who previously could not afford the commodity due to exorbitant prices. Kenya’s tea sector has lately experienced a slump due to high cost of input, market volatility and climatic shocks.

The government has streamlined tea value chains to motivate farmers and is considering setting up a stabilization fund to ensure small scale farmers have steady income. It has fast-tracked establishment of a fertilizer factory to reduce over-reliance on imports and the Kenya Tea Development Agency [KTDA] has streamlined the fertilizer distribution system countrywide.

[Xinhua 16/02/15]

25

COMMODITY NEWSTEA

TanzaniaDespite Abundant Opportunities, Production Is Still MinimalAt the moment, Tanzania produces only 32,000 tonnes annually equal to 5.5% or ranking 13th in Africa. Global production increased from 4.6 million tonnes in 2009 to 4.91 million tonnes in 2013, but Tanzania has contributed very little. In Kenya tea production stood at 278.1 million kg in 2013 compared to 214.4 million kg in 2012, making Tanzania tea lose the market at the international auction market in Mombasa. Kenya delivers about 400,000 kg of tea to Mombasa auction, with 50,000 kg of tea from Uganda while Tanzania only exports between 32,000 and 33,000kg.

Tanzania can increase tea production and bring in enough foreign exchange as the case in some African countries if the government put more emphasis in using existing opportunities .The Tea Board of Tanzania has advised the government to invest more in irrigation schemes to boost production. The lack of proper irrigation has stifled production which stood at 11.5 million kg between July 2014 and December 2015 compared to 9.3 million the year before. There is also a need for access to modern agriculture inputs and subsidies in order to raise production. The northern part of Tanzania has 8,000 ha of tea plantations with other 14,000 ha being cultivated in the southern part of the country with 50-60% of tea production being exported to Mombasa.

Tea sales increased to 76% from 74% in the 2012/13 fiscal year due to the increased demand for direct sales and overstock in Mombasa auction where traders from UK, South Africa, Russia and Pakistan come to purchase the produce.

[Guardian 18/02/15]

26

GeneralQuiet Trading Conditions Undermining Producer OptimismWith Chinese New Year this month producers report the activity of buyers has slowed and markets are quiet. With so much of the trade being conducted with Asian countries the impact of the lunar holiday is very noticeable: prices are not moving and there are few ongoing contract negotiations. Producers are not expecting much buyer interest in at least until mid-March, possibly even into April when importers and merchants assess their stock levels and determine requirements for Q2 and Q3.

Producers are optimistic that the log trade will continue brisk at favourable prices as countries supplying tropical species are unlikely to be able to increase the supply for export. Exceptions are possibly the Democratic Republic of the Congo [DRC] and Congo [Brazzaville] where analysts suggest there is a possibility for increased volumes coming onto the market. Despite the cooling of the economy in China this has not affected the demand for logs there and Indian mills appear to be diversifying their sourcing and increasing tropical log imports from countries other than those in SE Asia.

[ITTO 01-15/02/15]

Improved Availability Dampens Sipo And Sapele Export PricesWhile producers report one or two minor changes in prices for sawn sipo and sapele, both slightly weaker on increased supply from Cameroon and Congo Brazzaville, market demand and price levels for other timbers have not changed during the first weeks of the year. The slight fall in sipo and sapele prices came as no surprise and is in line with the anticipated Q1 demand which is always influenced by slow business during the Lunar holidays and the slowdown of consumption during the northern hemisphere winter months. Despite the minor changes in sawnwood prices, log export prices were unchanged throughout January.

[ITTO 16-31/01/15]

EU And China’s Stimulus Measures Should Lift Construction GrowthWith the EU member states representing the main market for W. African timber all eyes are on the likely impact of the recent efforts of the EU Central Bank to stimulate growth. Producers expect these measures to eventually stimulate greater construction activity and expectations are that demand will begin to grow towards the end of Q1. On the downside, the new measures introduced in the EU have driven down the euro exchange rate making imports more expensive. Producers have carefully assessed the changing market sentiment and newly announced economic stimulus measures in China but appear reassured that the strategies being applied in China will support continued, albeit slower, economic growth. Middle East market demand remains strong but West and Central African exporters report that meranti prices are very competitive and battle for market share is very keen.

[ITTO 16-31/01/15]

Untapped MarketsAnalysts bemoan the lack of any concerted or cooperative marketing initiatives in African producer countries which means that market diversification efforts are limited to what individual manufacturers can finance. The US and countries in the Pacific could offer opportunities for African suppliers but, to-date, these markets remain untapped.

[ITTO 16-31/01/15]

Weak Construction Depresses French ImportsDirect imports of tropical wood into France were 632,000 cu.m roundwood equivalent volume [RWE] in the first 10-months of 2014, 1.2% less than the previous year. The decline was partly due to the continuing weakness in the French construction sector last year. Already slowing in H1 2014, output in France’s construction sector contracted a further 0.6% in the 3-months to November according to the latest data from INSEE.

Tropical hardwood plywood has also come under rising competitive pressure in France from imported Chinese plywood, European birch plywood, and other panel products. Imports of sawnwood into France from Cameroon fell particularly dramatically last year. However there was a rise in French veneer imports from Gabon, encouraged by the EUs decision to suspend the GSP tariff on okoume veneer from Gabon on 24 June 2014 and to backdate the suspension to 1 January 2014.

[ITTO 16-31/01/15]

27

COMMODITY NEWSTIMBER

EU Tropical Hardwood Log Imports Slide EU imports of tropical hardwood logs were 119,000 cu.m in the first 10-months of 2014, 25% less than the same period of 2013. Imports fell particularly dramatically from the Democratic Republic of Congo [DRC], down 43% at 27,000 cu.m in the first 10 months of the year. Analysis of monthly data indicates that while the general trend in EU imports of tropical logs has been downwards over the last 3 years, there was a sharp increase in imports in September and October 2014.

[ITTO 16-31/01/15]

Minor Recovery In EU Imports Of Sawn Tropical HardwoodEU imports of sawn tropical hardwood were 806,000 cu.m in the first 10 months of 2014, 2% more than the same period in 2013. Imports from Cameroon fell 9% to 247,000 cu.m. However, this decline was offset by rising imports from Malaysia [+11% to 161,000 cu.m], Brazil [+11% to 90,000 cu.m], Gabon [+7% to 81,000 cu.m], Ivory Coast [+13% to 73,000 cu.m] and the Republic of Congo [+14% to 39,000 cu.m]. Monthly data indicates that after a slow start to 2014, EU imports of sawn hardwood increased strongly between March and June. Imports fell away again in Q3 2014 as consumption had not kept pace with imports and European stocks had begun to build. However there was a slight uptick in EU imports in October 2014, mainly because wood at last began to flow more freely from Cameroon.

[ITTO 16-31/01/15]

CameroonDouala Port Introduces Emergency MeasuresWood at last began to flow more freely from Cameroon. This followed introduction of emergency measures by the Cameroon authorities to reduce serious congestion at the port. These measures included commissioning of new cranes and the allocation and redevelopment of more transit space for timber shipments.

Looking forward, port congestion is widely expected to become less of a problem in Cameroon following the recent announcement by the Minister of the Economy, Planning and Regional Development that the Limbe Deep Seaport supported by South Korean investment should become operational during 2015. The Kribi Seaport in Cameroon, supported by US$567 million of Chinese investment, is also reported to be 60% complete and is expected to provide a large new harbour serving all of Central Africa.

However Douala port is still not without problems. There are some 150-200,000 cu.m of logs, mainly for China, awaiting shipment. Reports also say there are long delays in the shipment of containerised sawnwood.

[ITTO 16-31/01/15]

Inadequate Land-Side Infrastructure Pushes Up Transaction CostsWhile Doula Port congestion has been solved across the region port and landside congestion is set to become the big issue facing the West Africa container trade according to Drewry Maritime Advisors during a recent TOC Market Briefing: West Africa, an event that bring together stakeholders in the container supply chain.

[ITTO 16-31/01/15]

28

CARHigher Production In CARPrices for sipo and sapele remain weak and demand for sipo has fallen with only limited buying for European markets. There are reports of a resumption of sawn sapele exports from the Central African Republic [CAR] but this comes at a time when market demand and prices for these timbers are weakening. Okoume prices are also weaker, apparently due to over stocking of logs and sawnwood in China. Currently the few buyers that are still active in the market show little interest in okoume.

[ITTO 01-15/02/15]

29

COMMODITY NEWSTIMBER

GhanaGhana Ratifies ECOWAS/EU EPAAfter months of deliberations Ghana has decided to support the decision of the regional block, ECOWAS, to sign an Economic Partnership Agreement [EPA] with the European Union. In December last year ECOWAS negotiated the pact with the EU. At that time Ghana indicated it would support the position of the regional block on the EPAs but Nigeria had reservations. The EPA allows signatory members of ECOWAS quota free market access to the European markets. Some African trade ministers are reported to have resisted ratifying the EPA which they say would impact negatively on the efforts towards industrialisation and job creation in ECOWAS member countries. Some Ghanaian manufacturers have expressed concern that the agreement will result in the collapse of local industries because of the influx of goods from Europe. However, Trade and Industry Minister, Dr. Ekwow Spio-Garbrah, argued that the agreement presents an opportunity for Ghanaian firms. The EPA replaces the existing non-reciprocal preferential trade regime that governs trade relations between the ACP and the EU.

[ITTO 01-15/02/15]

2014 First 10 Month Export PerformanceGhana produced and exported a total of 286,416 cu.m of plantation logs and wood products valued at €112.13 million in the first 10 months of 2014. This compares to the 225,487 cu.m exported during the same period in 2013 and represents a 27% y-o-y increase in volume in 2014. The main markets for the 13 different products exported in the first 10-months of 2014 were in Asia and the Middle East such as India, China, Israel, Lebanon and Vietnam. Together these countries accounted for 131,464 cu.m of all exports in the period.

The main products demanded in these markets included billets, poles, sliced veneer and air dry sawnwood in teak, gmelina and asanfina, mainly for reprocessing in the importing country. In the period reviewed, plywood exports fell by 3% to 2,080 cu.m compared to 2,149 cu.m in the same period in 2013 however, plywood export earnings increased 18% over the previous year. The regional markets for plywood included Nigeria, Burkina Faso, Benin, Togo, Niger and Mali. Nigeria was Ghana’s leading regional market for plywood accounting for just over 75% of the total export volume to regional markets. The leading export species for the period were teak, apao/apa, denya, wawa, mahogany, odum, cedrella and asanfina.

[ITTO 16-31/01/15]

30

MalawiAlliance One Spends US$1 Million On Planting Alliance One Tobacco, a multinational tobacco company has spent US$1million [K480 million] on a tree planting exercise at its newly acquired Mpale Estate, in Madisi, Dowa, which the company launched during the onset of the rainy season.

[Nyasa Times 16/02/15]

ARET Introduces New VarietiesAgricultural Research and Extension Trust [ARET] has introduced 3-new tobacco varieties in Malawi which according to the trust are pest and disease resistant besides being fast maturing.

[Malawi News 21/02/15]

31

COMMODITY NEWSTOBACCO

ZimbabweTobacco Exports Fetch US$196 MillionZimbabwe earned US$196 million from 27 million kg of tobacco exported between January and mid-February. Statistics from the Tobacco Industry and Marketing Board [TIMB] show that the latest figures are 6-times higher than US$36 million realised in the same period last year from 10.5 million kg of the golden leaf. Increasing revenue from tobacco exports attests to the success of the land reform programme and is gain for Zim-Asset which identifies agricultural productivity as one of the key drivers of the economic turnaround programme.

China 19.1 million kg $167 million

South Africa 2 million kg $7.89 million

Mauritius 936,000 kg $3.4 million

Russia 887,200 kg $1.8 million

UAE 650,034 kg $2.57 million

Exports were mainly to 29 countries in Asia, Europe, America, the Middle East, Africa, New Zealand and Solomon Islands in the Oceania. Last year, sales were made to 33 countries. Auction floors will open on March 4 and contract sales on March 5. The tobacco marketing season traditionally starts in mid-February, but this year’s season was pushed to March as there was no harvested crop for sale.

TIMB noted the tobacco crop was still at different stages of growth, hence there was no need to open the auction floors yet. Some farmers were still reaping irrigated tobacco, while the rain-fed crop was ripening. About 88,500 farmers have registered to grow the crop this season, up from 85,100 during the same period last year. The number of farmers growing tobacco has been increasing each year following the land reform programme. Only 3-auction floors have applied to buy tobacco this season.

Farmers have in the past seasons faced problems at the auction floors including long queues and not being paid on time. The farmers have also complained of the grading system which they say does not favour good prices for their crop. In the 2015 National Budget, the Government projected that 90,000 ha would be put under tobacco with output projected at 220 million kg.

Last year, flue-cured tobacco output amounted to 216 million kg, up from 165,85 million kg in 2013. Zimbabwe earned US$773 million from tobacco exports last year, a decline from US$877 million earned during the same period in 2013. Sales in 2014 were affected by a strike by workers at Mashonaland Tobacco Company between September and October last year.

[Herald 18/02/15]

Tobacco Selling Season Set to Begin in MarchThe 2015 tobacco marketing season, which was pushed back from the traditional mid-February, will now begin on March 4. According to the Tobacco Industry and Marketing Board [TIMB] the season will begin with auction sales followed by contract sales a day later. All 3-auction floors -Tobacco Sales Floors, Premier Tobacco Auction Floors and Boka Tobacco Auction Floors - will be operating again this year. Bookings are expected to start from 17th February and auction floors are expected to start receiving deliveries from 25th February. There were 18 registered Class A buyers and contractors last season while the TIMB again shut the door on Class B buyers.

[Herald 17/02/15]

Premier Tobacco Faces CollapsePremier Tobacco Auction Floors faces imminent collapse amid revelations that the company is in debt after failing to meet statutory obligations. The statutory levies owed to TIMB are money deducted from growers, but not forwarded to TIMB. There are now fears that Premier may collapse during the selling season leaving farmers who have delivered their crops in a lurch, a situation similar to the demise of Millennium Tobacco Auction Floors. However Premier has submitted an application to TIMB to trade.

[News Day 11/02/15]

32