com-watch - issue 56 - january 2016 watch - issue 56... · jacques r. saadé gathers producers...

WTO MINISTERS DELIVER DEAL FOR GLOBAL COTTON

Full Story On 8

KEY BUYER OF CONTINENT’S COTTON CUTS ORDERS

Full Story On Page 17

AFRICACOM-WATCH

WTO Leaders Agree to End Farm Subsidies

ISSUE 56 | JANUARY 2016

South Africa: Citrus Exports To EU Recovers To Record Levels

Uganda: Sugar Industry In Danger Of Implosion

05 28 33

1

AFRICACOM-WATCH

ISSUE 56 | JANUARY 2016

Contents

03 | African Group News

05 | General

09 | Cocoa

06 | Cashew, Groundnut & Shea

13 | Coffee

WTO Leaders Agree to End Farm Subsidies As Doha Unresolved

Regional: International Cashew ConferenceCôte d’Ivoire: Cashew Market BoomingMozambique: Mozambique To Produce 100,000 Tons Of CashewNigeria: NCAN To Improve Cashew Production / Cashew Exports Worth US$250 Million

Regional: Top-Performing Cocoa Rallies 10.9% In 2015 / El Nino To Keep Cocoa Prices High – Up 11%Cameroon: Farmer Prices Remain Steady Through Mid-December / 1,000 Hectares To Be Planted In EastCote d’Ivoire: Exporters Launch Price War For Cocoa Supplies / Poor Rains, Dry Harmattan Winds Affect Crops / Arrivals Seen At 733,000 Tonnes / Low Crop To Drive Global Cocoa DeficitGhana: Cocoa Board Approves US$300 Million Syndicated LoanSierra Leone: SLPMC To Invest In Cocoa Next Year

Regional: JAB Acquires Keurig Green Mountain Inc. For US$14 BillionAngola: Government To Re-Launch Coffee ProductionCote d’Ivoire: 126,000 Tonnes Of Robusta Produced In 2014-15Ethiopia: Bosch Group To Lift Coffee Processing / Commodity Exchange To Pilot Traceability System With CoffeeKenya: Lobbies Propose Tax Reductions To Revive Industry / EU To Promote Kenyan Coffee CompetitivenessUganda: Farmers Want Coffee Law Scrapped / October Exports Dip / Coffee Exports Rise 13% In November

17 | CottonRegional: Key Buyer Of Continent’s Cotton Cuts Orders / WTO Ministers Deliver Deal For Global Cotton / Africa’s Textile & Garment IndustryBurkina Faso: Burkina Faso To Miss Record Cotton Production TargetCameroon: IDB Grants FCFA48.2 Billion LoanKenya: State To Supply Inputs To Cotton FarmersMali: 2015-2016 Cotton Output Target Missed Over Late RainsTanzania: No Tangible Results As CSDSII Cotton Plan Ends

08 | CassavaCameroon: Chamber of Commerce Focus On Cassava Processing UnitsNigeria: IITA’s Cassava Weed Management Project Signs MoU With SON

CMA CGM Targets Moroccan Fruit & Vegetable Market / CMA CGM Participates In Senegal Fishing Conference

2

Website: www.cma-cgm.comEmail: [email protected]: @CMA_CGM_Group

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 LiabilityThe CMA CGM Group make every effort to provide and maintain usable,

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

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

information. Accordingly the CMA CGM Group denies any liability for any

direct, indirect or consequential loss or damage suffered by any person

as a result of relying on any published information. Conclusions drawn

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

are the sole responsibility of the reader.

THE AFRICAN COMMODITY REPORTBrought to you by CMA CGM Africa Marketing

Rachel Bennett Dominic Rawle

29 | Palm OilLiberia: Palm Plantation Plans Expansion

30 | SugarRegional: Sugar Shortage Over El Nino / Platts Sugar AnalysisKenya: COMESA Extension On Sugar Imports / Kenya Seeks Bidders For Five State-Owned Sugar MillersSwaziland: Swaziland To Produce Over 800,000 Tonnes Of Sugar By 2020 / EU Sugar Prices To Decline 9% To 2017 / Sugar Firm Fails To Issue Dividend Over DroughtUganda: Sugar Industry In Danger Of ImplosionZambia: Mansa Sugar Plans US$6.6 Million Sugar Factory

35 | TeaEast Africa: Regional Tea Sales Grow 6.4%Kenya: Tea Prices Stable At Mombasa Auction / Kenya Asks Sudan To Suspend Rules On TeaZambia: ZAFFICO Buys Kawambwa Tea

37 | TimberCentral/West Africa: Okoume Log Prices Tumble In 2015 / Mild Weather Sustains Buying For EU Markets / All Eyes On China - Key To Business In 2016 / Low Prices Attract Buyers To Less Popular Timbers / Supply NewsRegional: EU Tropical Log Imports Up 24%Gabon: Crackdown On Illegal Kevazingo FellingGhana: Forestry Features In 2016 Budget / Encouraging 9-Month Export Results / Timber Export Increased By 43% In January-August 2015Mozambique: Suspends Issuing Licenses For Logging / World Bank Supports Forestry ReformZambia: Mulls Banning Export Of Raw Timber / Government Gives ZAFFICO K10 Million

23 | Foodstuffs & BeveragesRegional: Johnny Rockets Targets Morocco & South AfricaMorocco: Emirati Investors Support Morocco’s Agriculture With €37 MillionNigeria: Dangote Buys Back Dangote Flour Mills For US$1Somalia: Exports Record Number Of Cattle To UAESouth Africa: AB InBev To List On Johannesburg Stock Exchange, Deal With SabMiller Nears Completion / Antitrust Watchdog Gives SabMiller, Coke Deal Preliminary Approval / South Africa Targets Asian Wine Markets / Wheat-Import Tariff To Climb To Record / South Africa Moves To Resolve Meat DisputeZimbabwe: EU To Grant US$43 Million To Livestock Sector

37 | TobaccoMalawi: Tobacco Processors Reaffirm Integrated Production System [IPS] Support

27 | FishMauritania: Signs EU Fishing Partnership Accord

28 | FruitCameroon: Banana Exports Reach 199,000 Tons Over First 9 MonthsSouth Africa: Citrus Exports To EU Recovers To Record Levels

CMA CGM Targets Moroccan Fruit & Vegetable MarketJacques R. Saadé Gathers Producers & Exporters In AgadirWith the strengthening of the CMA CGM Group’s maritime services in Morocco we can offer key solutions for Moroccan exporters of fruit and vegetables.

Last month Jacques R. Saadé, Chairman and Chief Executive Officer of CMA CGM Group, gathered leading players in the sector to mark the start of the season.

The event focused on promoting the unparalleled service that the Group offers to Moroccan exporters particularly in the reefer sector as well as several new services recently launched such as the WAZZAN service.

The event also highlighted complementarity services between CMA CGM’s lines and our subsidiary OPDR [Oldenburg-Portugiesische Dampfschiffs-Rhederei - www.opdr.com].

In all CMA CGM offers Moroccan fruit and vegetables exporters and producers 5-maritime services providing export solutions to France, Spain, Belgium, Netherlands, Russia, the United States and Canada.

We want to strengthen our lines in Morocco and constantly improve the quality of our services. CMA CGM is here to build a strong and sustainable relationship with Moroccan fruit and vegetable producers.

Jacques R. SaadéFounder, Chairman and Chief Executive Officer of CMA CGM Group

Agriculture is one of the major Moroccan economy sectors and contributes to approximately 16.5% of national GDP. CMA CGM is a leader in this sector: the Group is the 1st carrier of agricultural products from Morocco to the rest of the world in refrigerated containers. Established since 2002 in Morocco CMA CGM currently employs 1,200 staff.

“”

CMA CGM MAROC Casablanca / CMA CGM, COMANAV1 Avenue Pasteur Tour CMA CGM COMANAV 20300 CASABLANCA Phone 212 522 44 48 88 Fax 212 522 444 200 Email [email protected]

CMA CGM MAROC Agadir / CMA CGM, COMANAVNouveau Port d’Agadir Anza N° 12 Bis AGADIR Phone +212 528 847622/23/26 Fax +212 528843481/27855 Email [email protected]

COMANAV HO7 Bld Moukaouama Ex Resistance 20300 Casablanca Phone 212 522 46 44 26 Fax 212 522 30 37 71 Email [email protected]

3

COMMODITY NEWSCORPORATE

CMA CGM Participates In Senegal Fishing ConferenceCMA CGM Senegal participated in the 2nd ‘Salon Maritime de Dakar 2015’, a fishing and maritime exhibition held in Dakar 10-13th December 2015. The event was hosted by the Minister of Maritime Economy of Senegal. It brought together representatives of the Ministries of Fisheries, Aquaculture, Maritime Transport as well as industry stakeholders, technical and financial partners, NGOs, and other institutions.

For more information please view http://smd.sn/4

RegionalWTO Leaders Agree to End Farm Subsidies As Doha Unresolved Negotiators at the World Trade Organization’s [WTO] ministerial conference in Nairobi agreed to end direct export subsidies on farm produce even as 14 year-old talks on trade development remain unresolved. Developed countries will immediately eliminate export-subsidy entitlements while developing nations must end direct support by the end of 2018.

The declaration gives developing countries the right to use a special safeguard mechanism that allows them to raise tariffs temporarily to deal with a surge in imports or falling prices. It will also make it easier for Least-Developed Countries [LCD’s] to benefit from preferential market access for their goods. A global ban on export subsidies will help level the playing field for farmers and put an end to most trade-distorting subsidies.

However there was no consensus in the final declaration on the future of the Doha talks, named after the Qatari capital in which they started in 2001 with the aim of adding billions of dollars to global trade by stimulating cross-border commerce. Negotiations on the trade-development talks have been stuck since 2009 because of differences between wealthy and poor nations, chiefly over subsidized farming in the developed world.

Agricultural subsidies have been a key stumbling block in trade talks over 15 years. Trade leaders agreed to end cotton subsidies in developed countries immediately and in developing countries by the start of 2017. [African producers threatened earlier to open a case under the WTO’s dispute-settlement mechanism as early as January, in the event rich nations don’t significantly reduce or eliminate trade-distorting support to their farmers.]

Negotiators are leaving Nairobi without the required 66% majority of members needed to ratify the compromise Trade Facilitation Agreement [TFA], a deal mooted in Bali at the body’s ministerial gathering 2-years ago that seeks to improve customs procedures for goods from least-developed countries. This could increase merchandise exports by as much as US$1 trillion a year, according to the WTO. Six countries assented to the accord this week, bringing the total to 63 out of the required 108.

[Bloomberg 19/12/15]

5

COMMODITY NEWSGENERAL

RegionalInternational Cashew Conference The Naliendele Agricultural Research Institute [NARI] of the Tanzanian Ministry of Agriculture Food Security and Cooperatives, in collaboration with the Cashewnut Board of Tanzania [CBT] and Cashewnut Industry Development Trust Fund [CIDTF] held a 2-day International Cashew Conference [ICC] on 16-17th November in Dar es salaam, Tanzania. The conference was attended by delegates from Australia, China, India, Tanzania, Malawi, Ghana, Ivory Coast, Malawi, Mozambique, Nigeria, and other countries. The event allowed the sharing of knowledge and proposed strategies to stimulate increased production and productivity in cashew. In addition, the conference enabled the various actors to dialogue, network and establish collaborative partnerships.

[ICC 17/11/15]

Côte d’IvoireCashew Market BoomingIn 2014 the global cashew market was valued at US$4.69 billion, according to the International Nut & Dried Fruit Council. Côte d’Ivoire is cashing in on the cashew nut boom, racing to outperform India as the world’s leading grower of cashews. Over the past decade its cashew output has tripled. Growing consumption throughout the world has caused global exports and prices to skyrocket, resulting in a nearly 50% increase in the value of Ivorian cashew shipments tin 2015. With the lion’s share of the surge stemming from Indian and Asian markets these developing countries have become a key driver of cashew demand. Local demand is also increasing 15% annually and has more than doubled since 2004 to 240,000 MT. Indeed, demand for imported nuts is so vigorous that China’s Ministry of Finance reduced import tariffs for certain nuts at the beginning of 2015. Purchases have reached 50,000 tons, up from almost nothing a decade ago. As of June 30th production reached a record 625,000 MT, a stark comparison to the 185,000 MT it produced 10-years ago. In 2016 it hopes to produce 700,000 MT.

A bottleneck for investment is the lack of Ivorian processing capacity with 95% of output exported raw to India and Vietnam for processing. The Cotton and Cashew Council [CCA] plans on having 35% of raw cashew output processed locally within the next 5-years. A CCA study predicts that every 100,000 MT of processing capacity Côte d’Ivoire develops will create 12,300 factory jobs and another 10,000 elsewhere in the sector. The success of this project would make Côte d’Ivoire the first African nation to build a large-scale cashew nut processing sector as a remedy for unemployment. The African Cashew Alliance believes that a 25% increase in raw cashew nut processing in Africa would add over US$100 million to household incomes.

[Global Risks 11/12/15]

6

COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

MozambiqueMozambique To Produce 100,000 Tons Of Cashew The 2015/2016 cashew sales campaign is expected to reach 100,000 tons, an increase of 23% over the previous year, according to the national Economic and Social Plan for 2016. The seed cotton sales year should, in turn, total 70,000 tons, similar to the previous campaign. The Plan recently approved by parliament forecasts the agricultural sector in 2016 will register growth of 6.5%, as a result of investment in the sector, including provision of improved seeds and technical support to producers.

[Macauhub/MZ 28/12/15]

NigeriaNCAN To Improve Cashew Production The National Cashew Association [NCAN] notes a need to boost cashew production and strengthen cashew processing. Although the industry presently produces about 150,000 MT annually, the sector hopes to increase production by 50% in the 2016 season to diversify Nigeria’s economy. The new cashew season begins in 3-months. Key issues bordering on the development of cashew value chain are critical for Nigeria’s economic growth and development.

[NAN 07/12/15]

Cashew Exports Worth US$250 MillionAccording to the National Cashew Association of Nigeria [NCAN] cashew exports are worth US$250 million [N49.7 billion] yearly. The industry exported 180,000T of cashew nut with Vietnam and India remaining Nigeria’s largest buyers. Globally, stocks of nuts, including cashew, in North America and Europe have been low, while global demand has increased. This offers good prospects for the Nigeria’s cashew industry this year. NCAN has urged exporters to pay more attention to improve product quality and ensure hygiene and food safety to promote exports. The industry aims to increase cashew cultivation area and produce 500,000T or an annual income of over US$700 million [N138bn] by 2020. NCAN is working with farmers and the government to develop cashew growing areas and giving technical support to farmers to help them increase profits.

[Nation 30/12/15]

7

COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

CameroonChamber of Commerce Focus On Cassava Processing UnitsThe 6th session of the Chamber of Commerce, Industry, Mines and Crafts [CCIMA] approved a budget of 4 billion FCFA for 2016. Since cassava tubers, leaves, stems and roots are in high demand, the funds will be used for additional cassava processing units to be set up all nationwide. Some of the achievements for the 2012/2015 tenure include the construction of a cassava processing unit in Sangmelima in the South Region.

[Tribune 22/12/15]

NigeriaIITA’s Cassava Weed Management Project Signs MoU With SONThe Cassava Weed Management Project, managed by the International Institute of Tropical Agriculture [IITA], Ibadan has signed a Memorandum of Understanding [MoU] with the Standards Organisation of Nigeria [SON]. The MoU will foster cooperation for the development and implementation of collaborative programs, while highlighting the framework for partnership to include the exchange of scientific information and development of cooperative programs, especially in the areas of standardisation.

[NAN 26/11/15]

8

COMMODITY NEWSCASSAVA

RegionalTop-Performing Cocoa Rallies 10.9% In 2015Cocoa prices surged for a fourth straight year in 2015, closing the year up 10.9% at US$3,207/T to outperform all other commodities as a poor crop in No. 2 producer Ghana outweighed demand concerns. Investors piled into the volatile cocoa market betting on tightening supply from the West African nation, where the 2014/15 crop sank to under 750,000T, down 20% from the prior season due to low farmgate prices, lack of fertilizer distribution, poor weather and crop diseases.

Cocoa was the best performer out of 19 commodities in the Thomson Reuters Core Commodity Index, which sank by almost a fourth in the year as a prolonged rout in oil and base metals deepened amid concerns about waning demand from China, the world’s top consumer of industrial raw materials. Front-month New York cocoa peaked earlier in December, hitting US$3,422 per tonne on Dec. 7, almost a 5-year high as hedge funds and other speculative investors increased their bullish bets to the highest in more than a year. The buying interest came despite lingering concerns about weakening demand, as high prices choked off consumption in the United States and Europe and slowing economies staved off budding sweet tooths in emerging market economies, particularly in Asia. Cocoa grinds, an indicator of demand, posted year-on-year declines in each of the first three quarters of the year in North America and Asia, with modest gains in Europe in Q2 and Q3. Grinds will likely remain flat in 2016. But the El Nino phenomenon and a strong seasonal Harmattan wind in the region have kept prices elevated and could continue to disrupt supply in the new year.

[Reuters 31/12/15]

El Nino To Keep Cocoa Prices High – Up 11%ABN Amro notes weather factors are important as West Africa reaches its main production season. El Nino, may severely disrupt production while demand is continuing to rise. The result is a growing shortage, which is expected to keep prices at their current relatively high level. The El Nino effect will be at its highest at the end of the year coinciding with both the peak of production, and the Harmattan.

Falling cocoa production is opening up a shortfall, as demand outstrips supply. The estimated shortage of 15,000 MT in the 2014-15 season is expected to grow further in the current 2015-16 season. The ICCO [International Cocoa Organization] sees a shortfall of 96,000 MT. Prices have risen 11% so far and are around their highest level since their 2010 peak, when the civil war sent prices soaring. ABN noted other upward pressures on prices, despite continued muted demand. These included market uncertainty prior to elections and dry weather conditions through August and September, but most significantly, the looming threat of El Nino on this year’s worldwide production.

[Agrimoney 24/11/15]

9

COMMODITY NEWSCOCOA

CameroonFarmer Prices Remain Steady Through Mid-DecemberCocoa prices in Cameroon remained largely stable through mid-December amid robust harvesting and increased efforts to clamp down on smuggling to neighbouring countries. Prices ranged from 1,400-1,550 CFA francs [$2.33-2.58]/kg in the Centre region, while buyers paid between 1,200-1,350 CFA francs/kg in the South and South-West regions. Cameroon’s cocoa and coffee farmers association, ANPCC, said that output was strong. The cocoa season runs from Aug. 1 to July 31. The main harvest period runs from October to January/February and the light crop harvest period from April/May to June/July.

[Reuters 24/12/15]

1,000 Hectares To Be Planted In EastThe Haut-Nyong cocoa producers cooperative society plans to plant 910-ha of cocoa in the Eastern region of Cameroon, with the support of the Agropoles project which aims at creating income-generating activities in rural areas and limit the import of foodstuffs. The farms will see production rise from 165T to 1,800T after 3 years through the use of improved seedlings bought from the Société de Développement du Cacao [Sodecao - Cocoa Development Company]. The project includes the construction of a processing unit, which will give a higher added value to the producers.

[Business in Cameroon 25/12/15]

Cote d’IvoireExporters Launch Price War For Cocoa Supplies

Cocoa exporters are paying high premiums to suppliers in an effort to secure scarcer beans and fears that especially harsh Harmattan weather could make things ever worse. After a solid start to the 2015/16 season, arrivals at Abidjan and San Pedro ports have fallen behind last year’s levels, raising concerns among exporters that they will struggle to fill contracts. Exporters noted arrivals fell to 58,000 MT during Week 50 down from 69,000 MT during the same period last year.

Under Ivory Coast’s forward sales system, the government has fixed a guaranteed price of 1,088 CFA francs per kg this season for cocoa arriving at exporter warehouses at the ports. However major players are paying 30-50 CFA francs [US$0.05-0.08]/kg above the pricing scale.

Cote d’Ivoire brought in a record harvest of around 1.8 million MT in 2014/15, however industry sources predict a significant drop in output this season leading to an overall deficit of 183,000 MT. Ghana, #2 producer, has raised concern that poor output from the April-to-September mid-crop could add to the supply shortfall. Expectations of scarcity have driven up cocoa prices and exporters predicted they would climb further as would Cote d’Ivoire’s origin differential.

The Coffee and Cocoa Council removed this season a 15 CFA franc per kg limit on bonuses exporters are allowed to pay merchants to secure stocks. It also repealed a cap on the volumes subject to bonuses. The big losers amid the increasingly aggressive competition have been small domestic exporters who cannot match the ever larger premiums paid out by the bigger players.

[Reuters 15/12/15]

10

Poor Rains, Dry Harmattan Winds Affect CropsLight rains and dry Harmattan winds in most of Cote d’Ivoire’s main cocoa growing regions could blunt the main crop if the trend continues. The dry season in the world’s top cocoa producer runs from mid-November to March, at which point farmers and analysts’ concerns circle around the behaviour of the Harmattan. It can destroy pods and sap soil moisture when severe, reducing the size of beans. A long Harmattan combined with a fierce dry season could reduce supply and lower bean quality after January.

[Reuters 07/12/15]

Arrivals Seen At 733,000 Tonnes Cocoa arrivals reached around 733,000 tonnes by Dec. 27 since the start of the season on Oct. 1, down from 760,000 tonnes in the same period of the previous season. Exporters estimated around 72,000 tonnes of beans were delivered to Abidjan and San Pedro ports between Dec. 21 to Dec. 27 down from 81,000 tonnes during the same period last year.

[Reuters 28/12/15]

Low Crop To Drive Global Cocoa DeficitThe decline in Ivorian cocoa output is forecast to lead to a deficit of 183,000 MT in the 2015/16 season, the first shortfall in 3-years according to Swiss cocoa futures trading at ECOM Agrotrade Ltd. It forecasts the Ivorian main crop [October/March] at around 1-million tonnes, down from 1.25 million last year, following dry weather during the summer. There were improved rains in October, but these would only start to boost production towards the end of the main crop season.

Port arrivals stood at 50,000-55,000 MT/wk during December. In the same period last year arrivals ranged from 60,000-80,000 MT. The prospect of a global deficit in 2015/16 has helped to fuel a run-up in prices, with London futures climbing to a 4-1/2 year high of £2,332/MT. Meanwhile global grinds fell 4% in 2014/15 on a combination of weaker chocolate demand and destocking of products including cocoa butter. However forecasts see grind growing between 1-2% next year. Cote d’Ivoire overtook the Netherlands as the top cocoa processing country in the 2014/15 season with Ivorian grind rising 6% in 20015.

[Ghanaweb 11/12/15]

GhanaCocoa Board Approves US$300 Million Syndicated Loan

Parliament approved the Ghana Cocoa Board’s request for a US$300 million syndicated loan to refinance short-term securities. The industry regulator discussed the loan with banks including Bank of Tokyo-Mitsubishi UFJ, Standard Bank Group Ltd., Societe Generale SA, Credit Agricole SA, DZ Bank AG, Natixis SA and Nedbank Capital. The loan will add to a US$1.8 billion syndicated credit signed by the board in September, the month before the 2015-2016 season began. It used the money to buy beans from farmers. The government began selling cocoa bills more than 10 years ago to help close the gap in financing needed to fund purchases of cocoa.

Ghana harvested the smallest crop of the bean in 5-years during the last season because of dry weather and less-than-expected rain. The shortfall has helped support the price of cocoa in London, where it has risen 16% this year. So far this year through September, Ghana sold US$550 million of 182-day cocoa bills.


11

COMMODITY NEWSCOCOA

Sierra LeoneSLPMC To Invest In Cocoa Next YearThe Sierra Leone Produce Marketing Company [SLPMC] wants to invest Le.10 billion in 2016 to buy about 1,000 MT of cocoa for export, 10 times the target for 2015. The target for this year is 100 MT and the company has already bought about half that and will probably reach the maximum before the year end. SLPMC, a state-owned enterprise, did not trade last year because of the Ebola outbreak which saw farmers abandon their plantations.

[Awoko 04/12/15]

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 Dec 15 2460.83 3380.98 2272.67 3335.00

2 Dec 15 2457.41 3374.88 2289.33 3331.33

3 Dec 15 2499.09 3423.48 2300.33 3373.00

4 Dec 15 2474.77 3431.81 2305.00 3381.00

7 Dec 15 2495.09 3449.18 2318.67 3403.67

8 Dec 15 2431.08 3364.88 2275.67 3314.33

9 Dec 15 2463.42 3419.34 2288.00 3367.33

10 Dec 15 2441.32 3396.71 2274.33 3341.67

11 Dec 15 2444.60 3402.86 2273.00 3346.33

14 Dec 15 2456.46 3419.98 2294.00 3368.33

15 Dec 15 2431.72 3389.40 2280.33 3346.33

16 Dec 15 2405.11 3338.70 2257.33 3286.67

17 Dec 15 2389.63 3304.74 2256.00 3253.33

18 Dec 15 2388.78 3305.12 2253.00 3249.33

21 Dec 15 2376.42 3290.51 2244.67 3234.33

22 Dec 15 2338.49 3245.65 2227.00 3188.67

23 Dec 15 2378.36 3300.60 2255.67 3245.67

24 Dec 15 2371.17 3294.03 2258.00 3211.33

28 Dec 15 2352.37 3270.59 2248.17 3193.67

29 Dec 15 2346.00 3258.71 2238.33 3202.67

30 Dec 15 2360.37 3273.51 2245.67 3214.67

31 Dec 15 2358.80 3268.66 2256.33 3208.3312

RegionalJAB Acquires Keurig Green Mountain Inc. For US$14 BillionInvestment firm JAB Holding Co. has acquired Keurig Green Mountain Inc. for almost US$14 billion in the industry’s biggest-ever deal. The Luxembourg-based group, known as JAB, has spent more than US$30 billion in the past 4-years acquiring coffee companies in the U.S. and Europe to challenge global leader Nestle SA. Run by a trio of well-connected executives [Peter Harf, Bart Becht and Olivier Goudet] with decades of experience in food and beverage, JAB has bought assets including D.E Master Blenders 1753 NV, Mondelez International Inc.’s coffee unit and high-end chain Peet’s Coffee & Tea. Alongside coffee, the 3-men invest the US$16 billion Reimann fortune in a variety of consumer-goods companies such as fragrance maker Coty Inc. and Durex condom maker Reckitt Benckiser Group Plc. The trio is also involved in some of the year’s biggest deals, from Coty’s US$12.5 billion acquisition of some Procter & Gamble Co. beauty brands to AB InBev’s US$110 billion takeover of SABMiller Plc.


AngolaGovernment To Re-Launch Coffee ProductionDuring the 55th General Assembly of the Inter-African Coffee Organisation [IACO - www.iaco-oiac.org] held under the theme “Gender and youth in the African coffee industry” the Angolan government aims to relaunch coffee production by supporting producers and renewing plantations. To revive coffee cultivation focus will be placed on the introduction of technical support programmes to producers as well as research. Angola aims to take advantage of increased global demand which is expected to reach 200 million bags in 2030 up from 149 million bags in 2014. The IACO consists of 25 producing countries and was created in order to monitor and defend the role of the coffee crop in the socio-economic development of Africa.

[Macauhub/AO 25/11/15]

Cote d’Ivoire126,000 Tonnes Of Robusta Produced In 2014-15Cote d’Ivoire produced 126,000 tonnes of robusta coffee during the recently ended 2014/15 season and is targeting output of 130,000 tonnes this season as it seeks to revive the sector after years of decline. Under reforms introduced in 2012, the country abandoned more than a decade of liberalisation in its coffee industry, which proved bad for farmers and production. Now the Coffee and Cocoa Council [CCC] sells forward the bulk of the anticipated crop in order to fix a guaranteed price for farmers. It has set a government guaranteed farmer price of 670 CFA francs [$1.11]/kg on the opening day of the 2015/16 harvest [18/12/15] up from 650 CFA francs/kg last season. Before the reform programme was implemented annual output had fallen to around 90,000 tonnes. Cote d’Ivoire is targeting production of around 400,000 tonnes by 2020.

[Reuters 18/12/15]

RESOURCES55th IACO AGA DocumentsIACO 55th AGA-Symposium Presentations

13

COMMODITY NEWSCOFFEE

EthiopiaBosch Group To Lift Coffee ProcessingGerman multinational, the Bosch Group, wants to help lift the quality and returns from Ethiopian coffee by supplying better processing equipment and expertise. The Group organised the first International Coffee Processing and Packaging Round Table with participants from the United Nations Industrial Development Organisation [UNIDO], industrial and agricultural institutions, SME’s and farmers. Central to the talks was agreeing on a strategic bid to enhance food security.

Ethiopia is a major player in the world coffee market. It is presently the sixth largest producer in the world, exporting over 150,000 tons a year. However, it exports more than 90% of its raw commodity and consequently loses added value as it is unrefined, unprocessed and unpackaged. Bosch Packaging Technology is taking the lead in developing Public-Private Partnerships [PPP] to create an enabling environment to promote processing, roasting, manufacturing, packaging and even distributing raw coffee.

[EA Business Week 06/12/15]

Commodity Exchange To Pilot Traceability System With CoffeeThe Ethiopia Commodity Exchange [ECX - www.ecx.com.et] is set to pilot an IBM enabled national traceability system, eATTS starting from January 2016, with coffee. Each and every coffee bag traded on the ECX floor will be traceable over the value-chain that extends from farm-gate to the final market. The project, worth US$4.5 million enables universal tradability, currently stands at 7-commodities namely, coffee, sesame, haricot, beans, white pea beans, red kidney beans, maize and wheat. The project is in collaboration with USAID, which contributed US$1.8 million under its Agribusiness Market Development activity, and Nestle, Jacobs Douwe Egberts [JDE], Mother Parker’s Coffee & Tea and The Sustainable Trade Initiative [IDH], which jointly contributed US$1.3 million through the Sustainable Coffee Program.

The eATTS system will provide the full event history of where every bag of coffee was washed, stored and when it was sampled and graded, generally serves as a ‘product passport.’ The system links bags of coffee traded via the ECX to one of over 2,500 geo-referenced washing, hulling and cleaning stations situated in Ethiopia’s southern, central and western coffee growing regions.

[2Merkarto 15/12/15]

14

KenyaLobbies Propose Tax Reductions To Revive IndustryLobbies in Kenya’s coffee sector have proposed tax cuts and new measures to help breathe life into the industry. Fees and taxes currently account for 35% of the farmers’ total gross sale. According to the Kenya Coffee Producers Association and the Agricultural Industry Network the government passes its own costs to the farmers by making the farmers pay for their own research [2% ad valorem levy], Coffee Directorate [1%] and Road Cess [0.5%]. Consequently they want statutory levies reduced from 4% to 2%, coffee directorate levy cut from 1% to 0.5% while the 2% Coffee Research Fund and 0.8% levy by Kenya Roads Board and 0.2% county levy scrapped. They also want the government to review the terms and conditions of the marketing companies’ licences noting there are only 10 firms that buy Kenyan coffee. As part of this, they want farmers to be allowed to participate in coffee marketing. They also want marketing, milling and pulping levies to be scrapped and replaced with competitive pricing for the services. And are calling for the review of the existing coffee regulations to increase the number of coffee brokers and establish a safety net for the farmers.

[Daily Nation 14/12/15]

EU To Promote Kenyan Coffee CompetitivenessThe European Union [EU] wants Kenya to improve the competitiveness of export products through disease control and research. EU is the primary market for Kenyan beans, which grew by 17% in 2014 to earn the country Sh.2.6 billion. This earned farmers Sh.1.5 billion at an average price of Sh22,300/50kg-bag. In 2013, the Coffee Research Institute received EU funding through the Kenya Rural Development Programme to promote capacity-building in coffee growing counties. Past EU funding has been used to develop 2-new coffee varieties, Ruiru 11 and Batian. The new coffee varieties have led to increased coffee production, which has led to increased national coffee export revenues.

[Standard Digital 18/12/15]

15

COMMODITY NEWSCOFFEE

UgandaFarmers Want Coffee Law ScrappedThe National Union of Coffee Agribusinesses and Farm Enterprises [Nucafe] has called for a new law to govern activities in the coffee value chain. Farmers presented demands for a new law to the government through the Ministry of Agriculture. They want the current Uganda Coffee Development Authority Statute 1991 [UCDA Statute] to be scrapped and replaced with a more comprehensive law, to be known as The Coffee Act.

Nucafe, which has carried out a nationwide survey on coffee value chain related issues, is of the view that for the Coffee Policy to be operationalised and for it to make a positive impact, there must be a strong law. Nucafe, believes that the UCDA Statute is not suitable for the sub-sector. It is not all-encompassing and it leaves out many actors and service providers who ought to be regulated and coordinated to enhance Uganda’s coffee competitiveness from production to consumption. Thus, there should be a law that can regulate not only coffee farmers but also the traders and all categories of coffee handlers.

[Monitor 23/12/15]

October Exports Dip Uganda’s coffee exports in October dipped 2.4% y-o-y due to unfavourable weather conditions. Uganda exported 223,858 60-kg bags of coffee in October, slightly down from 229,438 bags exported in the same period last year, the Uganda Coffee Development Authority [UCDA] said. The month was characterized by heavy rains and hailstorms affecting coffee drying operations.

[Reuters 27/11/15]

Coffee Exports Rise 13% In NovemberUganda’s coffee exports rose 13.2% in November from the same period last year, helped by favourable weather. The state-run Uganda Coffee Development Authority [UCDA] said shipments increased to 248,921 60-kg bags from 219,948 bags exported in the same month in 2014. Coffee exports are one of Uganda’s largest sources of foreign exchange.

[Reuters 17/12/15]

16

RegionalKey Buyer Of Continent’s Cotton Cuts Orders

China, the world’s largest cotton user, will import less fiber this year. According to the International Cotton Advisory Committee [ICAC] that will be bearish for global prices. Such a scenario will hurt several African countries that are exporters of cotton. ICAC estimates purchases by China will fall 33% to 1.2 million tonnes in the year starting August from 1.8 million tonnes a year earlier. China is expected to instead increase imports of cotton yarn from countries including Vietnam and India. As Africa exports most of its cotton unprocessed, it will be unlikely to directly benefit from China’s change of tack, and will hope the Asian giant’s new source markets themselves turn to Africa to meet demand from China.

Cotton has gained 6.7% this year to withstand a drop in commodities from copper to crude oil and nickel as an economic slowdown in China erodes demand for raw materials. Global cotton prices will average about 70 cents a pound in 2015-16 and trade in a range of 61-82 cents.

China’s cotton imports dropped 49% to 42,100 tonnes in October from a year earlier. Analysts even note China may stop importing cotton by 2018, and may become a net exporter the following year as the nation’s textile industry shrinks amid foreign competition and cheap polyester prices. With consumption slowing, world cotton imports are forecast to decline by 3% to 7.4 million tonnes in 2015-16, a 4th straight decline after peaking at 9.8 million tonnes in 2011-12. Still, imports are rising in countries including Vietnam as more spinning mills are opened with investment from some Chinese companies.

Overall, 37 of 55 African territories produce cotton, but overall the continent is a small player globally. However, for the major producers, cotton accounts for a significant share of their GDP. In 2011 48% of Mali, 31% of Togo’s and 16% of Benin’s exports by value were based on cotton, according to the International Trade Centre [ITC]. The continent’s cotton however suffers from an unfair perception that it is of lower quality and lower yield. Africa will hope some of China’s increased investment announced at the recently-concluded Forum on China-Africa Cooperation [FOCAC] trickles down to building its industries’ capacity to change its terms of trade globally, or beat out obstacles such as rich country subsidies. The hardest-hit exporters are from Francophone Africa, which accounts for 75% of production on the continent.

Burkina Faso, for which cotton is its most important cash crop, leads the pack and a decline in public revenue could slow the recovery following a period of political instability. Mali and Ivory Coast, the next two largest growers and exporters, are also rebuilding politically, and could take a hit, as would Egypt, which exports the continent’s densest bales. Benin and Cameroon will also be watching the situation with concern. However there are also gains - countries that import cotton would likely benefit from lower prices, but only three are significant players, with South Africa accounting for over half of imports, at 19,000 MT. DR Congo imported 8,000 MT in 2013/2014, while Ethiopia brought in 6,000 MT. They are however dwarfed by the scale of imports from China, which imported 1.8 million tonnes over the same period, and Europe’s 1 million tonnes of the global total of 7.6 million tonnes that was shipped.

[Mail Africa 09/12/15]

17

COMMODITY NEWSCOTTON

WTO Ministers Deliver Deal For Global CottonCotton from LDCs will be given duty-free and quota-free access to the markets of developed countries as global ministers have agreed a deal calling for cotton from least developed countries to be given duty-free and quota-free access to the markets of developed countries from January.

The ministerial decision, made at the annual World Trade Organization [WTO] meeting, this year held in Nairobi, stresses the vital importance of the cotton sector to least developed countries [LDCs]. The decision includes 3-agriculture elements: market access; domestic support; and export competition.

Market Access Calls for cotton from LDCs to be given duty-free and quota-free access to the markets of developed countries; and to those of developing countries from 1 January 2016.

Domestic Support Acknowledges members’ reforms in their domestic cotton policies and stresses that more efforts remain to be made.

Export Competition Mandates that developed countries prohibit cotton export subsidies immediately and developing countries do so at a later date.

The agreement provides 2016 as the first date from which the poor countries, which include 35 LDCs and the Cotton Four [C4] countries in Africa: Burkina Faso, Benin, Chad and Mali; and other developing countries, can begin to export cotton duty-free.

The decision on cotton export subsidies was part of an overall agricultural commitment to eliminate subsidies for farm exports. The move is the most significant outcome on agriculture in the WTO’s 20-year history. It was also the first such meeting hosted by an African nation. The Nairobi package also contains decisions of specific benefit to LDCs, including enhanced preferential rules of origin for LDCs and preferential treatment for LDC services providers. This builds on the 2013 Bali ministerial decision on preferential rules of origin for LDCs, which set out, for the first time, a set of multilaterally agreed guidelines to help make it easier for the country’s exports to qualify for preferential market access.

The Nairobi agreement expands upon this by providing more detailed directions on specific issues such as methods for determining when a product qualifies as made in an LDC, and when inputs from other sources can be cumulated or combined together into the consideration of origin. It calls on preference-granting members to consider allowing the use of non-originating materials up to 75% of the final value of the product. The decision also calls on preference-granting members to consider simplifying documentary and procedural requirements related to origin. Key beneficiaries will be sub-Saharan African countries, which make up the majority of the LDC group, the proponent for the agreement on preferential rules of origin for LDCs.

[Just Style 21/12/15]

18

Africa’s Textile & Garment IndustryAfrica’s textile and garment industry is optimistic that its shipments to the United States, the world’s biggest market for such products, will surge following the 10-year renewal of the African Growth and Opportunity Act [AGOA] - under the United States’ General System of Preferences that allows duty-free imports of a wide range of African products, which was signed by President Obama on June 11, 2015. This is also driving many Turkish, Indian and Chinese textile companies to African countries, particularly Ethiopia and Kenya, to not only flee the rising production and labour costs at home but also to avail of the duty-free exports under the AGOA to the United States.

At the last TexWorld USA show held in New York many buyers welcomed the AGOA’s renewal creating a win-win situation for both U.S. importers and sub-Saharan African shippers. The AGOA provides African shippers duty-free access to 8,000 products in the U.S. market, including almost all the textile and apparel products. Renewal will boost shipments of textiles and apparel to the United States, which for Africa is the world’s biggest market and will also motivate African and foreign companies to invest in capacity.

Kenya has emerged as Africa’s largest apparel exporter, followed by Lesotho, Mauritius and Ethiopia. The Ethiopian government has identified textiles and apparel as a priority industry. East Africa has become the continent’s sourcing hub for textile and garment products. Ethiopia, Kenya, Lesotho, Madagascar and Mauritius are well positioned for this. But an obstacle to growth is the high cost of energy, transportation and logistics.

Some textile companies taking advantage of rising US demand and benefit from AGOA’s duty-free imports are establishing multiple textile plants. Mombasa Apparel launched its fourth textile factory in November 2014 in Kenya while Taiwan’s New Wide Garment, which already has 8-factories in Kenya, Lesotho and Ethiopia, plans to further expand its African operations.

Despite the AGOA duty-free privilege, not all African countries have been able to substantially increase their textile and apparel exports. Kenya, Lesotho and Mauritius account for much of apparel exports under the program. In 2014, Kenya exported US$423 million followed by Lesotho with US$289 million, Mauritius US$227 million and Swaziland US$77 million. According to a report by the McKinsey management consulting firm, Ethiopia and Kenya in particular have the potential to become bigger players in garment manufacturing. Some European companies, including H&M, Primark and Tesco, have been sourcing their garment needs from Ethiopia, but other countries have also been supplying substantial quantities of apparel. While Ethiopia offers cost advantages, Kenya boasts higher production efficiency, but both countries face challenges such as poor infrastructure, cumbersome customs procedures and lack of technology.

Africa’s textile and apparel exports to the U.S. could potentially quadruple to US$4 billion over the next decade through the renewal of the AGOA. U.S. clothing imports from sub-Saharan countries in 2014 reached US$986 million, up 6% over 2013. However, African countries tend to lag behind in productivity, quality and product range.

[Daily Sabbah 14/12/15]19


Burkina FasoBurkina Faso To Miss Record Cotton Production Target Burkina Faso is likely to produce 722,000 tonnes of raw cotton in the 2015-2016 season, missing its target of a record 800,000 tonnes due in part to intermittent rains. Production in West Africa’s top cotton producer will be around 40,000 tonnes higher than the last season, which runs from May to February. SOFITEX, the largest of the 3-cotton companies, expects to buy 580,000 tonnes of raw cotton for 100 billion CFA francs [US$168 million]. Although world cotton prices have tumbled 20% in the past year, Burkina Faso has invested in increasing output by increasing payments to farmers and cutting the price of fertilisers.

[Reuters 15/12/15]

CameroonIDB Grants FCFA48.2 Billion LoanThe Cameroonian government is to receive a FCFA 48.2 billion loan from the International Islamic Trade Finance Corporation [ITFC], a subsidiary of the group of the Islamic Development Bank. Funding will be used to purchase agricultural inputs and cotton seeds in support of the Cotton Development Company [SODECOTON], a public company.


KenyaState To Supply Inputs To Cotton FarmersOver 10,000 farmers in the country will receive certified cotton seeds just before the start of the 2016 season. The seeds to be distributed at a subsidised retail price are part of a 3-year programme initiated last year to bulk cotton seeds with a view to boosting productivity and market share. The seeds have been produced in Bura, Tana River County.

[Standard Digital 22/12/15]

Mali2015-2016 Cotton Output Target Missed Over Late RainsMali has missed its 2015-2016 production target for raw cotton by 100,000 tonnes because of late rains. According to the state-owned CMDT cotton company it had produced 550,370 tonnes of raw cotton, about even with last year’s crop but significantly less than its 650,000 tonnes target.

[Reuters 28/11/15]

21


TanzaniaNo Tangible Results As CSDSII Cotton Plan EndsAlmost all targets set by the Tanzania Cotton Board [TCB] to transform the cotton sub-sector under the second Cotton Sector Development Strategy [CSDSII], have not been met. The 5-year CSDSII, implemented 2009-2015, has never brought the intended results and now, the Tanzania Cotton Board [TCB] is struggling to come up with new thinking on how to tackle problems affecting the sub-sector. CSDSII sought to improve the level of production, promote wealth creation and spearhead increased processing to enhance domestic value addition and manufacturing industrialization. However only 1 of its 4-components have been implemented.

Contract farming failed as stakeholders did not participate actively and the programme for seeds multiplication also failed to take off. Challenges also included the weather, declining trend of cotton demand in the world market and declining productivity. While the target under CSDSII was to attain an annual output of 260,000 MT by the end of 2014, cotton output has declined from 203,000 MT to 150,000 MT between 2013 and 2014.

In 2009, cotton was second to coffee bringing the most foreign exchange earnings to Tanzania accounting for 23.6% of total earnings. Exports declined to US$31.9 million during the year ending September 2015 from US$92.1 million during the year ending September 2014.

TCB is to review the CSDSII. Conclusions will be tabled to cotton stakeholders in order to come up with a workable guide to revamping the sub-sector including revitalizing farmers’ association and co-operative organisations. The government too should increase its support for extension services while better system of cotton seeds management and improvement of cotton farming must also be employed.

[Citizen 03/12/15]22

RegionalJohnny Rockets Targets Morocco & South AfricaJohnny Rockets, the all-American restaurant franchise focuses its 2016 global expansion efforts on new markets around the globe and seeks development opportunities in Morocco and South Africa. Johnny Rockets is looking for franchise partners and other development opportunities in Casablanca and Johannesburg.

[QSR 03/12/15]

MoroccoEmirati Investors Support Morocco’s Agriculture With €37 Million Emirati investors have agreed to invest €37 million on 6-agriculture projects in Morocco. Ministers signed 3-agreements in Abu Dhabi during the 6th edition of SIAL Middle East from 7-9th December. These public-private partnerships [PPP] will enable Morocco to gather the necessary funds enough to launch its 1,515 ha-projects:

- Olive planting on 190-ha and installation of the grinding plant at El Hajeb [100 tonnes per day] [€6.93 million] - Planting of citrus fruit trees on 200-ha and installation of a packaging plant [1,000 tonnes yearly] and a freezing plant at

Kenitra to include 3 cold rooms of 1,300 tonnes. [€5.4 million] - 4-projects on 1,125-ha related to fruit growing, red fruits and stock breeding at Kenitra, Sefrou, Fkih Ben Saleh and

Marrakech [€ 24.3 million]

SIAL Middle East is one the leading Middle East agriculture and business fairs and hosts this year more than 900 exhibitors from 45 countries and more than 20,000 visitors from 88 countries.

[Middle East Confidential 08/12/15]

NigeriaDangote Buys Back Dangote Flour Mills For US$1Africa’s richest man Aliko Dangote is assuming control of his Dangote Flour Mills for just US$1. He sold 65.7% of the company to South Africa’s Tiger Brands in 2012 for US$200 million. Since then and despite the injection of millions of dollars and rebranding last month the company was unsuccessful. Now the South Africans are heading for the exit doors, after reaching a buyback deal with Dangote Industries. Dangote Industries will also give Tiger Brands an immediate cash injection of US$46.1 million. Tiger Brands will assume and settle the unit’s debt of 0.4 billion rand.

[The News 14/12/15]

23

COMMODITY NEWSFOODSTUFFS & BEVERAGES

SomaliaExports Record Number Of Cattle To UAESomalia has exported 5,000 herd of cattle to the UAE, which officials have claimed to be among the largest shipments from the country. Somalia has been a regular exporter of cattle to the UAE ensuring animal health standards are maintained. According to a FAO report in April, Somalia in 2014 exported a record 5-million livestock to the Gulf, propelled by heavy investments in animal disease prevention that were supported by the EU and the UK.

[African Farming 16/12/15]24

South AfricaAB InBev To List On Johannesburg Stock Exchange, Deal With SabMiller Nears CompletionBelgian-based brewer Anheuser-Busch [InBev] has received the green light to list on the Johannesburg Stock Exchange ahead of its merger with SabMiller. Once listed, AB InBev’s ordinary shares will be tradable by South African resident investors without reference to their foreign portfolio allowances and will be classified as ‘domestic’ for exchange control purposes.

SabMiller and AB InBev confirmed on 11th November that the £71bn mega-brew deal - the biggest ever British corporate merger - would go ahead. SabMiller will delist from the London Stock Exchange and a number of cuts are expected to be announced as part of the move. Parts of the business, including Peroni, Grolsch and Meantime, will also be sold off.

[Citiam 14/12/15]

Antitrust Watchdog Gives SabMiller, Coke Deal Preliminary ApprovalSABMiller and Coca-Cola’s proposed deal to combine their operations that mix, bottle and distribute soft drinks in Africa, cleared a major hurdle on December 17th after South Africa’s competition watchdog gave its preliminary approval. SABMiller and Coca-Cola agreed in November 2014 to team up to create the continent’s largest soft drinks bottler, a group with annual sales of US$2.9 billion and ambitions to corner a fast-growing market. The group, Coca-Cola Beverages Africa, will account for 40% of all Coke volumes sold in Africa, serving 12 southern and eastern African countries. Coca-Cola Beverages Africa will be headquartered in South Africa, its largest market.

[Reuters 18/12/15]

South Africa Targets Asian Wine MarketsSouth African wines had a particularly good year in China in 2015. In H1, South Africa doubled its Chinese market share from 2% to 4% in volume according to Chinese customs statistics. China is South Africa’s 6th-largest export market for packaged wines by volume, and the largest in Asia, accounting for around 8.99 million liters for the year ending September 2015.

South Africa’s top wine markets in 2014 were U.K., Germany, Russia, Sweden and France. The past 10 years has seen a marked increase in exports, up by nearly 58%, according to VinPro, which represents more than 3,000 wine producers and cellars. Export wise, South Africa has extended its reach and become more popular in less traditional markets like China. Wines of South Africa recently opened Asian offices in Hong Kong.

[AFK 07/12/15]

Wheat-Import Tariff To Climb To RecordSouth Africa will increase duties on wheat imports to the highest on record to protect local farmers as prices of the grain trade near a 5 1/2-year low. The nation will raise the tariff to 1,224.31 rand [US$85] a metric ton. The current duty of 911.20 rand was imposed in September, and was the highest since the government introduced the regime in 2002. The increase may support domestic farmers as they reach final harvesting stages - roughly 95% complete. South Africa is the sub-Saharan region’s biggest producer of the grain after Ethiopia, but it’s still a net importer of wheat.


25

COMMODITY NEWSFOODSTUFFS & BEVERAGES

South Africa Moves To Resolve Meat DisputeSouth Africa and the United States have committed to resolving the dispute over meat. Trade Minister Rob Davies met with his US counterpart Ambassador Michael Froman on the sidelines of the World Trade Organisation’s [WTO] 10th Ministerial Conference in Nairobi, Kenya. The meeting assessed progress made since a notice was issued by US President Obama in November regarding withdrawing duty-free treatment for South Africa’s agricultural exports under the African Growth and Opportunity Act [AGOA] if South Africa does not resolve US’ concerns. The letter warned South Africa that if the negotiations on the outstanding issues related to the poultry issues are not resolved by 31st December then the US would suspend South Africa’s duty-free treatment of South African agricultural goods into the United States.

Since then South African and US veterinarians signed the “Protocol for Poultry Meat and Day-Old Chicks” on 13th November. The protocol will secure the continued exports of poultry from those areas in the US that are not affected by Avian Flu in the event of any new outbreaks of the disease. Also on 18th December a notice was gazetted amending Schedule 4 of the Customs and Excise Act by inserting rebate item 460.03 that provides for a rebate of the anti-dumping duty imposed on bone-in chicken pieces originating or imported from the United States for 65,000T p.a. The International Trade Administration Commission [ITAC] also published guidelines on the allocation of the quota and the issuing of rebate permits. A volume of 16,250 MT will be available for use on a first come first serve basis from 18th December to 31st March 2016 where after rebate permits issued by ITAC will be required for use of the rebate item.

With these publications South Africa has implemented the Paris agreement which signals a significant milestone in the process of finalising market access issues raised in President Obama’s letter. Both Ministers will continue to engage constructively to finalise the last few outstanding issues.

[iafrica 21/12/15]

ZimbabweEU To Grant US$43 Million To Livestock SectorThe EU granted US$43 million to assist the development of Zimbabwe’s livestock sector as exports and product quality will be enhanced. Zimbabwe was a major exporter of beef to the EU until 2000 when the export of beef was banned from Zimbabwe to the EU, following the outbreak of foot-and-mouth disease [FMD]. The EU will now assist local companies meet the international standards through a range of programs including working with the Standards Association of Zimbabwe.

[African Farming 16/12/15]

26

MauritaniaSigns EU Fishing Partnership Accord Mauritania has signed a new protocol with the European Union [EU] which extends the fisheries partnership agreement. The protocol, valid for 4-years, allows EU vessels to resume their fishing activities in Mauritanian waters. Under the terms, the EU fleet will be allowed to fish for shrimp, demersal fish, tuna and small pelagic fish up to a total of 281,500 tonnes per year. In addition to the catches paid for by the European fleet, the EU will also make a financial contribution of about US$63.23 million per year to Mauritania, of which about US$4.412 million will be used to enhance fisheries governance and to support sustainable fisheries. Mauritania’s fishing sector represents more than 20% of the country’s budget revenue.

[African Farming 30/11/15]27

COMMODITY NEWSFISH

CameroonBanana Exports Reach 199,000 Tons Over First 9 Months The Haut Penha Banana Plantation Company [PHP] is the Cameroon subsidiary of Marseille’s Compagnie Fruitière and is the leading banana producer in Cameroon. According to the Cameroon Banana Association [ASSOBACAM] out of the 199,000 tons exported by Cameroon between January and September 2015 PHP exported 117,000 tons or 60% of total exports. Meanwhile producers led by state controlled Cameroon Development Corporation [CDC] only exported 81,000 tons in the first 9 months of the year.

[Fresh Plaza 10/12/15]

South AfricaCitrus Exports To EU Recovers To Record Levels As the South African domestic citrus fruit industry acclimatises to the EU’s controversial citrus black spot [CBS] measures exports have hit new records. The EU accounts for about 40% of all South African citrus exports and comprises more than 50% of EU consumption during the European summer months, when import protection wanes in line with EU citrus production.

So far the industry has invested R1-billion to address and manage the EU’s actions on CBS. The higher levels of compliance is emerging as a competitive advantage. The Citrus Growers Association noted domestic “risk mitigation” actions taken have put South Africa in a stronger position relative to a number of other exporting countries. The yearly turnover of the domestic citrus industry is around R9-billion.

The South Africa industry is still contesting the CBS science, arguing that the disease is unable to establish itself in Mediterranean climates and that it cannot be spread from skin to plant, as it is carried in the leaves, which are not exported. Nevertheless, the industry’s comprehensive intervention to address EU’s concerns stand it in good stead should other phytosanitary trade matters arise in future. The outlook for the 2016 season is positive, with rising demand for lemons and easy-peeling mandarin in particular.

But output could be affected by weather conditions in South Africa, with citrus production in some territories having been affected by either drought or hail which could see lower volumes in 2016. However prices may also improve, owing to domestic supply constraints in the EU, as well as the fact that several exporters face CBS emergency measures.

The trade framework is well entrenched and will be enhanced further in 2016 with the ratification and implementation of the much-delayed Economic Partnership Agreement [EPA] between the EU and the Southern African Customs Union, including Mozambique. The EPA should be ratified by the middle of 2016 and will place trade and economic relations on a more modern footing. It provides genuine new market access for South Africa products into Europe, notably in the agro processing sectors of fisheries, sugar and wine, while at the same time leaving a certain amount of protection for some of the more vulnerable South African products.

[Engineering News 02/12/15]

28

COMMODITY NEWSFRUIT

CameroonSocapalm To Invest FCFA38.2 BillionThe Société Camerounaise de Palmeraies [Cameroonian Palm Company], owned by the Socfin group, is considering investing FCFA 38.2 billion for the expansion of its farms in the Littoral region. An agreement was signed with the government giving Socapalm advantages by law enabling private investment 5-10 years of exemptions, throughout the installation and production stages. Socapalm operates more than 78,500-ha of palm grove in the Littoral and Southern regions with 32,500-ha directly exploited. The palm grove expansion project will increase production and help lower the national production deficit which sees imports of 15,000-16,000T p.a.


LiberiaPalm Plantation Plans ExpansionLiberian palm plantation Golden Veroleum Liberia [GVL] is to expand. A US$30 million shipment of mill equipment arrived at the Samuel A. Russ Port in Greenville on Dec. 3. GVL, owned by the U.S-based private equity investor Verdant Fund LP, is to construct a palm oil processing plant in the southeastern region. The mill will process 5 tons of palms per hour and, at full capacity, its main mill will be able to produce up to 80T/hr. Products from the refined palm oil processing will be used for the making of lubricants, soap and lotions among other manufactured goods.

Liberia, in 2012 [latest available figures] produced about 44,000 tons of crude palm oil, and exports in the commodity were worth about US$2 million. This is still a relatively small amount, and Liberia is ranked #57 among worldwide producers of palm oil. Nigeria, for example, produces close to 1 million T p.a.

[AA 16/12/15]

29

COMMODITY NEWSPALM OIL

RegionalSugar Shortage Over El NinoEl Nino is impacting the world’s sugar production, driving up prices as investors amass the biggest bullish position in 7-years. Speculators boosted their net-long position in raw sugar to the highest since March 2008, according to the U.S. Commodity Futures Trading Commission. El Nino has led to excessive rain in Brazil and dryness is hurting crops in India and Thailand.

Sugar prices are up 45% since late August and the contract is the best-performer in the Bloomberg Commodity Index over the past 6-months. After 5-years of surplus that sent prices to the lowest since 2008, supply is expected to fall short of demand in the 2015-16 season.

World sugar prices tracked by the United Nations’ Food & Agriculture Organization rose 4.6% in November after jumping 17% in October. The downpours in Brazil have hampered cane harvesting and reduced the amount of sweetener in the crop. Rainfall in Brazil’s main-producing region of center south may leave output 1 million tons lower than forecast.

Platts Sugar AnalysisPlatts, a leading global provider of energy, metals and agriculture information, appointed Paul Baksh as head of sugar analysis. Paul leads a team of 5-global sugar analysts based in London and Switzerland responsible for producing the daily Platts Kingsman Sugar reports, which include proprietary news, analysis price assessments, as well as trade flows and supply and demand data.

[PR Newswire 16/12/15]

KenyaCOMESA Extension On Sugar ImportsKenya’s safeguard against sugar inflows from regional states has been extended by 1-year. The extension, which will now expire in February 2017 from a February 2016 deadline, limits sugar imports from the Common Market for Eastern and Southern Africa [COMESA] countries, offering relief to local millers that fear competition from cheap producers.

[East Africa 07/12/15]

30

COMMODITY NEWSSUGAR

Kenya Seeks Bidders For Five State-Owned Sugar MillersThe Kenya government has invited bids for the purchase of stakes in 5-state-owned sugar companies, seeking to complete reforms aimed at making its ailing sugar industry more competitive. The State will sell a 51% stake in Sony, Chemelil, Nzoia, Muhoroni and Miwani to strategic investors and reserve another 24% for farmers and employees. Two of the firms, Muhoroni and Miwani, are in receivership. It will then sell a remaining 25% stake in the companies in an initial public offering once the factories are profitable. Bidders have until February 26th 2016 to submit proposals.

Kenya in October announced it had written off Sh39.7 billion owed by state-owned sugar companies, aiming to ease their planned privatisation. The 5-companies are in need of modernisation to survive competition from the entry of other sugar producers and an impending end to sugar import quotas from the Common Market for Eastern and Southern Africa [COMESA] trade bloc. Kenya was in March granted a 1-year extension of sugar import limits from the regional trade bloc to revamp its ailing sugar industry. The country produces 600,000 tonnes of sugar a year, compared with an annual consumption of 800,000 tonnes. The deficit is covered through strictly controlled imports from COMESA.

[Footprint To Africa 06/12/15]31

COMMODITY NEWSSUGAR

SwazilandSwaziland To Produce Over 800,000 Tonnes Of Sugar By 2020The Swaziland Sugar Association’s [SSA] 5-year strategy is to produce over 800,000 tonnes of sugar by 2020.Current sugar volume sales are 690,000 tonnes and 5.4 million tonnes of cane per annum. Despite the current uncontrolled sugar industry environment the strategy will focus on improving quality and meeting sugar requirements.

The industry is facing a number of challenges which include the prevailing droughts caused by climate change, the fluctuation of sugar prices in the world market and increasing costs of production. There is also a need to secure and increase preferential markets a crucial move due to the abolishment of the EU quota in October 2017 which will result in greater competition in the EU. This could consequently result in reduced prices as low producing countries like Brazil could then have a price leverage over high cost producing countries like Swaziland. The Southern African Customs Union [SACU] remains Swaziland’s main market.

[Star 08/12/15]

EU Sugar Prices To Decline 9% To 2017Whilst sugar sales are projected to increase in the Southern African Customs Union [SACU] region, the European Union [EU] market value is projected to depreciate further as sugar prices are projected to decline by a further 9% leading up to 2017.

According to the Royal Swaziland Sugar Corporation [RSSC] integrated report 2015, there was a 23% global drop in sugar prices in 2014, from a peak of about €700/T in 2012, to €450/T in 2014. RSSC is considering various factors which include EU flat consumption, rapidly evolving market dynamics, increased volatility in terms of price and supply, new emphasis on supply and risk management, new skills set for operating in the increasingly competitive market and creative measures of commercialising and sourcing sugar.

As sugar consumption in Africa is on the rise RSSC is actively exploring opportunities to leverage existing and new African markets via preferential trade terms among COMESA and SADC members. However, the African market is still prone to challenges of robust competition from African and international suppliers especially from low cost producing countries.

[Swazi Observer 17/12/15]

Sugar Firm Fails To Issue Dividend Over DroughtOne of Africa’s biggest sugar producers Illovo Sugar has not declared a dividend for its interim period ending September 30, 2015, citing weather-related crop declines and increased working capital levels. In the 6-months to September 30th unaudited financial statements reflect that Illovo, which has operations in KwaZulu Natala, South Africa, reported a 58% decline in diluted headline earnings per share [HEPS], to 71.7 cents compared with a year ago.

A challenging commercial environment and sustained pressure on export sugar prices were cited as contributing factors. Group sugar production was down by 10% due to drought in South Africa, while operating profit decreased 37%.

[APA 03/12/15]

32

UgandaSugar Industry In Danger Of ImplosionUganda last year produced 438,000 tons of sugar way above the local demand of 320,000 tons. It managed its first surplus since 1972 in 2012 and expectations were that the sector would churn out 500,000 tons this season. However an uncharacteristically long rainy season, is expected to affect production as too much rain around harvest season tends to dilute the sugar in the cane. And longtime challenges come from the entrance of new millers who poach cane from existing growers already contracted to older players, a trend which discourages new investment in the sector and may reverse the gains of the last 2-decades.

According to industry projections at the current rate of increase in production supply will be at 535,000 tons short of anticipated demand at 613,000 tons. Millions of dollars in new investment will be required to keep the country in surplus, but players warn that it would be hard to justify this level of investment if rogue millers continue to grow in the scale of their operations.

According to a sugar policy regulating the industry launched 5-years ago, to set up a sugar mill operators must ensure they are not within 25-km of an established mill and must have at least 500 ha of their own plantation. These conditions were put in place to prevent new players poaching from contracted out-growers of the established players.

Uganda’s sugar industry may go the same way to their Kenyan counterparts. Kenya, which has fallen from a net exporter to a net importer in recent years, has suffered from an unregulated industry and a rise in cane poachers, a combination of which has brought industry decline. Last year Kenya’s sugar production stood at 500,000 tons against a national demand of 800,000 tons. This situation has given rise to powerful sugar import interests, which a few months ago attempted to fight off the importation of Ugandan sugar in favour of much cheaper sugar from further afield, which would guarantee them windfall profits.

These same interests have thrown obstacles in the way of much needed reforms in the Kenyan sugar industry, whose production is dominated by government controlled operations. Uganda’s industry is entirely in private hands which accounts for its rebound. The trade ministry says all those concerns will be incorporated in a new law to regulate the sector that will only begin to wind its way through the legislative process next year after the 2016 general elections.

[Africa Times 03/12/15]

33

COMMODITY NEWSSUGAR

ZambiaMansa Sugar Plans US$6.6 Million Sugar Factory Mansa Sugar Limited is planning a sugar plantation and processing factory in Chembe at a cost of US$6.63 million. The factory is expected to process 500,000 tonnes of sugarcane and produce 44,380 tonnes of sugar every year. An environment impact assessment [EIA] report submitted by Mansa Sugar notes the project site will be located in the Chembe economic zone across 2,500-ha. Production will span 3-phases – phase 1 will involve research and design over 6-months. Land development, civil construction and factory establishment will then be done over an 18-month period. Phase-3 is expected to take 2-years for full scale operation development.

[African Farming 16/12/15]

34

East AfricaRegional Tea Sales Grow 6.4%East Africa registered a 6.4% increase in tea sales at the Mombasa auction. The latest auction report released on December 1 shows the region exported 8.9 million kg, up from 8.3 million sold around the same time last year.Kenya recorded most sales. Out of the total tea exported, Kenya sold 7.2 million kg up from 6.3 million sold last year, representing a 12.5% increase in sales. Uganda, which majorly exports her tea through Mombasa, ranked second with a 10.6% increase in sales. The country sold 1.2 million kg up from 1 million sold last year.

On the other hand, Rwanda, Burundi and Tanzania recorded a fall in their sales at the auction in the past one year. Tanzania recorded the least sales indicating a 498% fall. This year it sold 45,634kg down from 273,188kg it sold last year. Burundi sold 98,630kg of tea down from 216,971kg it exported last year a 119% fall. Rwanda exported 314,839kg down from 438,966kg it sold last year indicating a 39% drop.

[Monitor 10/12/15]

KenyaTea Prices Stable At Mombasa AuctionTea prices at the Mombasa auction remained stable into Q4, giving high returns to traders compared to last year. According to the East African Tea Trade Association [EATTA] data, this year’s prices remain higher than 2014, where the highest average price between January and November was US$2.54 [Sh258.9]. Good prices were due to continued strong demand in traditional markets. Pakistan was dominant with Yemen and other Middle Eastern countries lending strong support. There was more activity from Kazakhstan, other CIS states [Commonwealth of Independent States], Russia and Egypt.

EATTA expressed confidence that average prices will remain above US$2 [Sh203.9] into 2016, despite ongoing rains. The country’s largest foreign exchange earner has enjoyed good prices this year, recording the highest average kilo price for the last 2-years at $3.14 [Sh320] in July. The weak shilling which has been trading at above the Sh100 mark against the dollar since July, has favored farmers this year. Small scale tea farmers earned Sh43.25 billion in bonus payments this year compared to35.54 billion last year. Kenya Tea Development Agency attributed the improved earnings to lower tea supply in H2 2015, which pushed up auction prices.

[Star 27/11/15]

Kenya Asks Sudan To Suspend Rules On TeaKenya has formally asked Sudan to reverse its decision to reduce the shelf-life of Kenyan tea from 3 to 1.5 years. The Sudanese government in 2004, made changes to the rules governing trade in tea where it required exporters to first seek certificates of origin to determine the tea had actually come from Kenya. Another rule directed that tea brought into Sudan must be sold within 1.5 years, a move the Sudan Standards and Metrology Organisation [SSMO] argue will help adhere to restrict health standards. The Kenya Bureau of Standards [KEBS] at the time routinely asked for more time to help local traders implement the unilateral rules. The decision means Kenyan traders will incur more costs in storage and make losses if they don’t make sales on time.

[Daily Nation 22/12/15]

ZambiaZAFFICO Buys Kawambwa TeaThe government has completed the compulsory acquisition of Kawambwa Tea Company from the former proprietor, Khumo Holdings of Zimbabwe. The company will be fully run by the Zambia Forest and Forestry Industries Company [ZAFFICO].

[ZNBC 16/12/15]

35

COMMODITY NEWSTEA

Central/West AfricaOkoume Log Prices Tumble In 2015At year end it is of interest to review the way business has developed over the past 12 months. In 2015 the big loser in terms of FOB price has been okoume where log prices have fallen around €140 per cu.m since the start of this year. Sapele and sipo LM grade FOB log prices are also down from levels early in the year by €85 and €66 per cu.m respectively. On the other hand, ayous log prices are now higher by €20 per cu.m than at the beginning of the year. Padouk prices have also risen during the year and are up about €15 per cu.m. However, prices for most of the other more popular timbers have finished up very little changed from 12 months earlier.

Looking back over the last decade illustrates that most popular log species did secure price gains, usually between €50-100 per cu.m for LM grade. Due mainly to strong Asian demand sawn padauk [FAS] has been trading at over €500 per cu.m FOB higher than in 2005 and even okoume sawnwood is, today, some €50 per cu.m FOB higher priced than in 2005 despite being currently out of favour in the market.

[ITTO 01-15/12/15]

Mild Weather Sustains Buying For EU MarketsOver the past month prices have remained largely unchanged and analysts expect this stability to continue into Q1 2016 as few positive developments in the established markets are expected. Demand in Europe is currently holding up well, and although expected to become quieter during the traditional Christmas and New Year vacations, the relatively mild winter weather in Europe has allowed construction work to continue for longer this year.

[ITTO 01-15/12/15]

All Eyes On China - Key To Business In 2016Producers appear to have settled into a general acceptance of the present low volume of business but this is affecting the financial results even of some major mills. The main issue is that demand in China continues to be depressed and any buying is of small volumes and favouring stock replenishment of only the high quality premier species. Analysts write “it is not easy to forecast how the market will perform in 2016. So much depends on how quickly the economy in China begins to resume steady growth and how quickly the housing market in the EU can be spurred back to life”.

[ITTO 01-15/12/15]

37

COMMODITY NEWSTIMBER

Low Prices Attract Buyers To Less Popular TimbersExcept for a few low volume ‘spot’ sales, buyers for China remain out of the market and there is no indication as to when major log buyers for this market will return. In response to the weak demand, exporters have maintained solidarity by holding firm on prices and at the same time are trimming back production volumes. Prices for okoume logs have fallen again and producers have come to accept that a recovery in export volumes and FOB prices is unlikely in the medium term. Interest in Beli has waned and prices are under pressure say producers.

The general view is that most buyers seem to be looking for a wider range of the less popular species taking advantage of the lower prices. This is good news for exporters but volumes ordered tend to be small. FOB prices for sawnwood are underpinned by the steady sales into EU markets but remain unchanged from the beginning of November. Sapele prices for EU markets are currently stable but producers are concerned that there will be growing competition from meranti as Malaysian exporters take advantage of the weaker ringgit to squeeze out sapele. This redwood/meranti competition also extends to markets in the Middle East. Analysts are concerned that this is a risk to market price stability at a time when overall purchase volumes are low and not likely to be stimulated by price cuts.

[ITTO 16-30/11/15]

Supply NewsForest authorities in Congo Brazzaville are very strictly enforcing the log export quota system under which log export volumes are determined by the volume of sawnwood sales. Producers in Congo Brazzaville are finding the sawnwood market hard going in the current market slowdown. On 1 January 2016 Cameroon will fully implement restrictions on prime species log exports. This has been welcomed by domestic sawmillers which have struggled to source enough high grade logs for their growing and successful sawnwood export markets.

[ITTO 16-30/11/15]

RegionalEU Tropical Log Imports Up 24%Following nearly a decade of continuous decline, EU imports of tropical logs have recovered a little ground this year. Imports increased 24% to 127,338m3 in the first 9-months of 2015. Much of this import growth was concentrated in the first five months and the pace of imports slowed between June and September. EU tropical log imports from Cameroon doubled to 30,464m3 and deliveries from the Central African Republic almost tripled to 14,122m3 in the first 9-months of 2015. Imports from Suriname also tripled from a low base to 2,776m3. However imports from Liberia declined 33% to 4,570m3.

[ITTO 16-30/11/15]

38

GabonCrackdown On Illegal Kevazingo FellingThe newly appointed Minister for Forests in Gabon, is reported to have initiated a crackdown due to allegations of corruption by officials in some areas of the country related to illegal logging and export of kevazingo. International media reports say some officials have been taken into custody and that an investigation is underway into the felling and trade in Kevazingo, more commonly known in international markets as Bubinga, a rare hardwood sought after in Asia.

[ITTO 16-30/11/15]39


GhanaForestry Features In 2016 BudgetThe Minister of Finance, Seth Terker, has presented the 2016 budget to parliament. The major highlights for the forestry and timber sectors are as follows:

- The new Public Wood Procurement Policy and the revised Forestry Development Master Plan will be implemented along-side the Forest and Wildlife Policy of 2012.

- The Forestry Commission [FC] will continue with policy and legislative reforms in the forestry sector.

- The FC will in 2016, continue with the maintenance and management of all forest plantations [2314 ha established in 2015], under a Public-Private Partnership [PPP].

- The FC will continue the promotion of the utilisation of lesser used timber species and the development of the bamboo and rattan industry.

- The FC will be well resourced to intensify law enforcement and deployment of additional more Rapid Response Teams [RRTs] across the country to stem illegal activities, especially chainsaw operations.

- A Consolidated Wildlife Bill, which is expected to make wildlife laws and management more effective and efficient across the country, has been approved by Cabinet.

- Implementation of the Voluntary Partnership Agreement [VPA] with the EU will continue. Over 90 percent of the wood tracking system has been completed and rolled out to ensure that only legally produced timber is exported to the EU market from Ghana, will continue.

- The single eco-tourism facility project located in the country’s capital will continue in 2016.

The 2016 budget avoids imposing new taxes but rather focusses on tightening tax policies by streamlining exemptions and avoiding revenue leakages.

Encouraging 9-Month Export ResultsThe Q3 2015 timber export report has been published by the Timber Industry Development Division [TIDD] of the Forestry Commission [FC]. This shows the cumulative volume of timber exported during Q1 was 267,379 cu.m, up by 7% on the 249,846 cu.m in the same period in 2014. The corresponding earnings for the first three quarters of 2015 was €135.02 million, up 37% y-o-y.

Of the total volume of 267,370 cu.m exported in 2015, airdried sawnwood [38.4%] and kiln-dried sawnwood [17.6%] accounted for 56% of the total. This was followed by overland sales of plywood to neighbouring countries[14.3%], poles [8.5%] and billets [8.1%]. Except for plywood, exports to ECOWAS countries declined however, for most other main export products increases were recorded compared to 2014. The export of poles and billets [small plantation logs] to Asian markets were significant in total exports at +53% and +19% respectively. Asian markets together accounted for almost 60% of total wood product exports.

[ITTO 01-15/12/15]

Timber Export Increased By 43% In January-August 2015 Ghana’s timber export value were €120.93 million from the export of 237,004 cu.m of wood products during the period January to August this year. This represents an increase of around 43% in volume and a 13% increase in value compared to the same period in 2014. The top species exported during the period reported were; teak, wawa, ceiba, gmelima and papao/apa. Ghana’s major export markets in the year to August included India, China, Germany, Nigeria and Burkina Faso. Wood product exports to regional African markets were valued at €18.49 million and included air and kiln-dried sawnwood, sliced and rotary veneers and plywood with over 70% of plywood going to Nigeria.

[Lesprom 26/11/15]

40

MozambiqueSuspends Issuing Licenses For LoggingThe Mozambique government has suspended issuing simple licenses for logging for a period of 2-years to enable the reorganisation of the sector. Deputy Minister Ana Comoana, acting as spokeswoman for the Council of Ministers, said the suspension aimed to stop the proliferation of simple license operators in large areas, whose control and management should be ensured by the forestry sector authorities. The measure is intended to exercise greater control and management of forest resources in Mozambique.


World Bank Supports Forestry Reform The World Bank has granted aid of US$50 million to Mozambique to help the country reform the forestry sector under an agreement signed in Paris. The agreement, signed by the Minister of Forestry, Celso Correia and the Director of the World Bank for Climate Change, John Roome, is intended to finance the reforms that the Mozambican government will begin to apply from 2016 including in-depth changes to exploration of forest resources. The reform provides for more criteria in issuing operating licenses, immediate suspension of unprocessed timber, forcing the creation of facilities for local processing.

Mozambique currently has a deforestation rate of 0.58%, which means the loss of an area of forest equivalent to 219,000 ha every year. The reform drafted by the government aims to lower that rate to 0.2% p.a. Mozambique’s forests cover around 51% of the total 800,000 km2 of the country.


ZambiaMulls Banning Export Of Raw Timber Zambia plans to ban the export of raw timber to protect its forests according to Vice President Inonge Wina. The country’s forests are currently under threat from unscrupulous timber merchants as well as other social practices such as cutting trees for charcoal burning. Government will take measures against exporting raw timber unless there is value addition to it. The Ministry of National Planning will introduce measures to encourage tree re-planting to replenish forests that have been cut indiscriminately. Zambia has 50 million ha of forests, and loses between 250,000 and 300,000 ha each year. Forests could contribute up to 10% to the country’s gross domestic product [GDP] if properly managed. However, currently, the contribution is less than 1%.

[Xinhua 28/11/15]

Government Gives ZAFFICO K10 MillionThe Zambia Government has given ZAFFICO 10 million Kwacha towards the Forest Plantation programme announced during a tree planting exercise and the commissioning of the Timber Forest Plantation in Shiwang’andu District. The President also implored ZAFFICO and ZESCO Limited to work together and to stop the importation of poles as a way saving foreign exchange.

[ZNBC 15/12/15]

41


MalawiTobacco Processors Reaffirm Integrated Production System [IPS] SupportThe Tobacco Processors Association [TPA], a body of local buying and processing tobacco companies comprising of Alliance One Tobacco [Malawi] Limited, Limbe Leaf Tobacco Company Limited, Japan Tobacco International Leaf Malawi Limited and Premium Tama Tobacco Limited, have reaffirmed their backing to the Integrated Production System [IPS] and to proactively provide clear information. Each TPA member operates independently in the Malawi market and addresses non-competitive industry issues under the TPA.

IPS received government approval in 2012 allowing the buyer to contract with the grower to buy an agreed volume of tobacco at a price not less than Government Minimum Prices [GMP]. The industry therefore operates under the government approved IPS regulations [Government Notice No 14 of 17th January, 2014] which also provides for minimum terms of IPS contracts.

IPS offers sustainability for Malawi’s tobacco industry. All stakeholders need to work together to develop a constructive and objective approach to IPS and issues affecting tobacco industry in order to retain Malawi as one of the main sources of burley tobacco leaf. TPA encourages all those stakeholders with concerns on how the IPS is being implemented in Malawi to contact us for open, constructive and transparent dialogue while seeking for areas of improvement.

[Maravi Post 09/12/15]

Integrated Production System [IPS] - Tobacco grown under the IPS system provides audited proof that it is grown in a sustainable, traceable and compliant manner. - It is a demand driven system with over 50% of the customer base requiring this for their purchases. In order for Malawi to remain

sustainable and competitive it is essential that the TPA provide our customers the assurance that tobacco purchased from Malawi, is grown and processed in line with required acceptable standards of the countries where the Malawi Customers sell their products.

- All major tobacco producing countries have adopted a form of IPS [Brazil, Mozambique and Zimbabwe]. - Since its adoption in 2012, more growers are voluntarily opting for contract arrangements as opposed to auction. - The number of IPS registered farmers is increasing - 69% in 2013, 74% in 2014, 82% in 2015.

42

COMMODITY NEWSTOBACCO