AFRICA COM-WATCH ISSUE 65 OCTOBER US$30B Investment From The African Green Revolution Forum. South Africa: Citrus Exports To EU

Transcription

1 AFRICA COM-WATCH ISSUE 65 OCTOBER 2016 US$30B Investment From The African Green Revolution Forum 03 South Africa: Citrus Exports To EU 29 Global Sugar Shortage 33 Get Extended Zero Tariff Period

2 COM-WATCH AFRICA ISSUE 65 OCTOBER 2016 Contents 03 General Regional: US$30Billion Investment From The African Green Revolution Forum [AGRF] / AfDB launches Feed Africa: A Strategy for Agricultural Transformation in Africa / Bayer s US$66 Billion Monsanto Takeover Bid Ghana: Agricultural Export Earnings Reach US$396 Million 05 Cashew, Groundnut, Macadamia & Shea Gambia: ACA Sub-Regional Seminar Ghana: Absence Of Regulatory Framework Hampers Cashew Sector / President To Establish Board On Winning Election Malawi: Agdevco Invests US$1.5 Million In Peanut Factory Zambia: High Levels Of Aflatoxin Hindering Exports 07 Cassava Gambia: Aspuna Signs Mou For Cassava Factory Nigeria: Development Partners To Invest US$5 Billion In Production Over 5 Years / Akwa Ibom To Establish Cassava Factories 08 Cocoa General: Cargill Sees Cocoa Crunch Lasting Until Surplus Crop in 2017 Regional: Olam Raises Cocoa Shortage Forecast Cameroon: Cargill To Share 1.4 Million In Premiums / Doubled Certified Exports In Season / Dry Stretch Expected To Cut Output / Exports Down Nearly 41% In August / Farm-Gate Prices Stable In September / Heavy Rains & Bad Roads Hamper Deliveries Cote d Ivoire: Six Days To Supply Documentation For Export Contracts / Cote d Ivoire Adjusts Transport Costs In Pricing Scale / Prospects More Favourable For / Rainfall Encouraging For Main Crop Outlook / Port Arrivals Down 16% / Exporters See Sharp Early Season Output Fall / Cote d Ivoire Cracks Down On Contracts Ghana: COCOBOD To Borrow US$1.8 Billion To Finance Cocoa Purchases / Ghana To Boost Output To Over 1 Million Tonnes/Year / HFC Bank Investing In Cocoa Sector / Cargill Expands Activities / Ghana Launches First Foreign Exchange Auction From Cocoa Loans / Cocobod Distributes Seedlings To Increase Production / Shortfall In Cocoa Beans Nigeria: Cocoa Midcrop Yield Seen At 25-Year Low / Nigeria Slips To 7th Position As Cocoa Producer Tanzania: Farmers To Profit From Laboratory Services 19 Coffee Regional: Brazil Drought Raises Coffee Prices For EAC Farmers Angola: Angola Plans To Boost Production Uganda: Government To Accelerate Coffee Production 21 Cotton & Textiles Regional: EAC To Phase Out Second-Hand Leather & Apparel Goods Burkina Faso: Africa s Top Cotton Grower Sees Good Crop After Monsanto Ban Mali: Mali Predicts Record Cotton Production Of Over 650,000 Tonnes Tanzania: Drop In Quality Across Western Zone 23 Fish Angola: Uniangola Invests In Expansion Of Its Fishing Fleet Kenya: Fisheries Management Law Namibia: Declares Mussels, Shellfish Unfit 1

3 THE AFRICAN COMMODITY REPORT Brought to you by CMA CGM Africa Marketing Rachel Bennett Dominic Rawle Website: CMA CGM Marseille Head Office 4, Quai d Arenc Marseille cedex 02 France Tel : +33 (0) Disclaimer of Liability The 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. 24 Foodstuffs, Livestock & Beverages Kenya: Tropical Heat Limited To Build Spice Factory Nigeria: Flour Mills Targets Export To Europe South Africa: Poultry Producers Under Threat From Cheap Imports 26 Fruit, Vegetables & Horticulture Cameroon: PHP To Increase Banana Production To 230,000 Tons Kenya: National Horticulture Traceability System Launched / Kenya Signs Avocado Deal Morocco: Agribusiness Expanding Production Nigeria: Fruit Exports Facing Challenges Rwanda: Rwanda Targets Flower Exports / Rwanda Builds Its First Avocado Factory Sierra Leone: Dole To Invest In Agricultural Sector South Africa: Citrus Exports To EU Get Extended Zero Tariff Period Sudan: Government Invests US$100 Million In Fresh Produce Cultivation Zimbabwe: Zimbabwe To Scrap Horticulture Export Permits 31 Palm Oil & Oils Cote d Ivoire: DekelOil Hits New Half Year Palm Oil Production Record Democratic Republic of Congo: Palm Oil Startup Sees Growth Chance Ghana: Sustainable Palm Production Conference Sets Up Development Board Nigeria: NIFOR, PZ Wilmar Sign MoU On Oil Palm Development 33 Sugar Regional: Global Sugar Shortage Kenya: Sugar Imports Rise 67% On Low Output Mali: Two Sugar Refineries To Merge To Boost Capacity Mauritius: Omnicane Sees 2016 Output Drop South Africa: Sugar Association To Forward Recommendations On Proposed Sugar Tax Tanzania: SADC Sugar Exporters Reach Amicable Position With Tanzania 37 Tea Kenya: Task Force Comes Up With Radical Proposals For Tea Industry / Specialty Tea Export Drops 25% / Farmers To Earn More In Bonus Payments / Revenue Of Small-Scale Tea Farmers Jumps 32% / Prices Rise 6% At Mombasa Auction 39 Timber West/Central Africa: European Buyers In No Rush To Place New Orders / New Buying Season Begins Quietly In Europe / Uncertain Demand Prospects Especially In The UK / Kevazingo/Bubinga Export Possible But Only Fully Processed Products Cameroon: Deliveries To Douala Port Up 2.4% in H Gabon: Investment In Veneer Plants / New Forest Code Ghana: Q1 Exports To Regional Markets Fall / China Top In First Half Export League Mozambique: Log Export Ban 43 Tobacco Malawi: No Market For 45 Million KG Of Tobacco 2

4 GENERAL Regional US$30Billion Investment From The African Green Revolution Forum [AGRF] African leaders, businesses, and major development partners pledged more than US$30 billion in investments to increase production for smallholder farmers and local African agriculture businesses over the next 10-years. The collective pledges at the African Green Revolution Forum [AGRF] are believed to represent the largest package of financial commitments to the African agricultural sector to date, backed by the broadest coalitions ever assembled in support of food production on the continent. The commitments were made at the official opening of the 6th AGRF that attracted more than 1,500 influential figures from 40 countries for 3-days of brokering new agricultural initiatives. The historic investments represent just the first wave of support for the new Seize the Moment campaign, one backed by the African Union Commission, the New Partnership for Africa s Development [NEPAD], the African Development Bank [AfDB], the Alliance for a Green Revolution in Africa [AGRA], key NGOs, companies and donor countries. The Seize the Moment campaign is a decisive push for the political, policy, and financial commitments essential to transforming Africa s agricultural sector. The goal: a new era of business opportunities for the 70% of the African population that depend on farming for food and income, yet too often face poverty and poor nutrition. Agriculture investors and development partners include: The African Development Bank, Bill & Melinda Gates Foundation, The Rockefeller Foundation, Kenya Commercial Bank [KCB] Group, OCP Africa, World Food Programme [WFP], Yara International ASA, and the International Fund for Agricultural Development [IFAD]. 3 RESOURCES - African Green Revolution Forum [AGRF] Seize the Moment campaign: - Feed The Future - Food-Secure 2030: - AfDB Feed Africa: Strategy for Agricultural Transformation in Africa, : Generic-Documents/Feed_Africa-_Strategy_for_Agricultural_Transformation_in_Africa_ pdf - Africa Feeding Africa or Technologies for African Agricultural Transformation [TAAT] program :

5 Regional. AfDB launches Feed Africa: A Strategy for Agricultural Transformation in Africa The Agriculture and Agro-Industry Department of the African Development Bank Group [AfDB] has launched its Strategy for Agricultural Transformation in Africa The move is part of the Bank s High 5 Agenda and meets the objectives of Feed Africa. The Feed Africa strategy has 4-specific goals: - Contribute to eliminating extreme poverty in Africa by End hunger and malnutrition in Africa by Make Africa a net food exporter - Move Africa to the top of export-orientated global value chains where it has comparative advantage [AfDB 19/09/16] Bayer s US$66 Billion Monsanto Takeover Bid German drugs and crop chemicals company Bayer has won over US seeds firm Monsanto with an improved takeover offer of US$66-billion [US$128 a share] including debt increasing its bid for a third time. The transaction will create a company commanding more than a quarter of the combined world market for seeds and pesticides in a fast-consolidating farm supplies industry. The transaction includes a break-fee of US$2-billion that Bayer will pay to Monsanto should it fail to get regulatory clearance. Bayer expects the deal to close by the end of [Reuters 14/09/16] Ghana Agricultural Export Earnings Reach US$396 Million Statistics recorded by the Ghana Export Promotion Authority [GEPA] notes earnings from the agricultural sub-sector recorded an increase of 16.51% in Earnings hit US$ million in 2015 compared to US$ million recorded in The top ten leading products include cashew nuts up 56% in export production, palm nuts and kernel up 88.07%, banana 52.36% and mangoes up by 21.95%. Other products that helped in increasing the industry s earnings but recorded declines in percentage change include Shea nuts down 34%. [Citi /09/16] 4

6 CASHEW, GROUNDNUT, MACADAMIA & SHEA Gambia ACA Sub-Regional Seminar A 2-day sub-regional training seminar of the Cashew Processing and Marketing Information System was held in Banjul from September, Organised by the African Cashew Alliance [ACA], the seminar brought together participants from Senegal, Guinea-Bissau and The Gambia. The event addressed important aspects of the cashew value chain, specifically cashew processing management and marketing information systems. At present 700,000 tonnes of raw cashew nuts are produced in Africa but only about 20% is processed and the rest are exported as raw cashew nuts. [Point 24/08/16] Ghana Absence Of Regulatory Framework Hampers Cashew Sector A fundamental problem of the country s cashew sector is the absence of a regulatory framework and body to manage, control and sustainably grow the sector, the Cashew Industry Association of Ghana has said. According to the association, it is essential that a legally constituted body is established, whilst a sustainable funding mechanism is put in place, alongside a well designed and implemented long term cashew development plan. While raw nuts production in the country continues to rise through a natural rate of increase, it is not adequate to meet the 10% yearly increase in global demand for raw nuts. National production is not adequate to meet the needs of processing factories across the country and for export. A 10-year cashew master plan seeks to increase production from the estimated 70,000 MT obtained in 2015 to 150,000 MT over the next 10 years and increase access to raw cashew nuts for local processing. The plan also seeks to intensify investments in research and development and establish nursery infrastructure to produce over 5-million improved planting materials for cultivation within five years. It is further aimed at facilitating the expansion of raw cashew nuts processing from 4,400 MT to 56,000 MT by 2020 to yield about 11,000 MT of kernels to earn about US$71 million. [Ghana Web 22/09/16] President To Establish Board On Winning Election President John Mahama has promised to set up a new Cashew Board for Ghana to be headquartered in the Brong Ahafo Region should he win the December 7 polls for a second term. [Class FM 14/09/16] 5

7 Malawi Agdevco Invests US$1.5 Million In Peanut Factory AgDevCo, an agribusiness investor, announced a US$1.5 million investment into a Malawian peanut [groundnut] processor. Malawi produces over 200,000 tonnes of groundnuts annually but exports, which had regularly exceeded 50,000 tonnes before the 1990s, collapsed following the introduction of stricter international quality standards. Afri-Oils aims to demonstrate that Malawi can meet international standards on the control of aflatoxin. International buyers in Europe and South Africa have confirmed interest in sourcing significant volumes of peanuts from the company. [PR Newswire 05/09/16] Zambia High Levels Of Aflatoxin Hindering Exports Zambia s groundnuts products are failing to penetrate the international market because of high levels of aflatoxins, according to the Zambia Bureau of Standards [ZABS]. The agency has since proposed that the permissible limits of aflatoxins in peanut butter should be reduced from the current 15ppb [parts per billion] to 10ppb in line with international standards. [Xinhua 05/09/16] 6

8 CASSAVA Gambia Aspuna Signs Mou For Cassava Factory Aspuna Gambia Ltd, a cassava value chain association, signed a Memorandum of Understanding [MoU] with the Department of Agriculture [DOA] and the National Agriculture Research Institute [NARI] on 8th September. The company is to build a factory for processing cassava for export and domestic consumption. [Point 09/09/16] Nigeria Development Partners To Invest US$5 Billion In Production Over 5 Years Development partners, under the auspices of Foundation for Partnership Initiatives in the Niger Delta [PIND] are to invest US$5 billion in the cassava sub-sector in 5-years. On September 8th PIND, in collaboration with public and private sector partners, as well as the Federal Government, hosted a 1-day National Cassava Summit. The event was an opportunity for multi-stakeholder conversations among farmers association, research institutions, input suppliers, banks, small-medium scale processors, large-scale industrial processors, transporters, marketers, development organisations and government ministries and departments. The summit coincided with the public launching of the Industrial Cassava Stakeholders Association of Nigeria. Though the largest producer of cassava in the world with about 53 million tons in 2013, Nigeria is yet to maximize the benefit of cassava exports due low yield of about 14T/ha as opposed to Asian countries where yields are more than 25T/ha. Nigeria s cassava production currently accounts for about 20% of the total global output of cassava but less than 1% of export. [Vanguard & New Mail 18/09/16] Akwa Ibom To Establish Cassava Factories Akwa Ibom State is to soon establish 3-cassava mills at Eket, Abak and Uruan Local Government Areas which are ready for inauguration. The mills will be operated through Public Private Partnership (PPP) arrangement in conjunction with the State Ministry of Agriculture. [Leadership 18/09/16] 7

9 COCOA General Cargill Sees Cocoa Crunch Lasting Until Surplus Crop in 2017 A cocoa crunch that curbed processing in the world s largest producing nations will last until a surplus forecast for next season starts reaching the market, according to Cargill Inc. Dry weather that hurt crops in West Africa this season will also mean the peak of bean deliveries from the bigger of two annual harvests that starts next month will be delayed. Processors will find it hard to get hold of good-quality beans before a surplus of more than 200,000 MT hits the market next year. Cocoa futures traded in London climbed to a six-year high in July overtaking levels seen during the civil war in Ivory Coast, when a ban on exports was imposed in the world s leading grower. Higher prices, limited supplies and poor-quality beans have made it harder for processors in producing countries to grind, with many factories including Cargill s slowing down. The worst Sahara desert winds in more than 3-decades helped dry out this season s crop, resulting in a big deficit this season. Rains that returned to Ivory Coast and Ghana last month are boosting prospects for the next crop, which will eventually result in a very healthy surplus. Precipitation in Ivory Coast and south-western Ghana has been above normal since Aug. 1. A lack of beans and lower quality has limited grindings in producing countries and caused the price of cocoa butter, which accounts for about 20% of the weight of a chocolate bar, to spike ahead of the peak demand period, when chocolate makers are preparing for Halloween and Christmas. The cost of cocoa butter relative to bean futures, the so-called ratio, climbed 24% this year Bean shortages this season are also causing tension on the futures markets, with the premium cocoa for December commands over the March contract rising more than 10/T [US$13]. While the crunch will make it harder to deliver cocoa to the exchange when futures expire Dec. 13, buyers appetites will be tempered by the prospect of next year s surplus. [Bloomberg 16/09/16] 8

10 COCOA Regional Olam Raises Cocoa Shortage Forecast A smaller-than-forecast cocoa harvest is expected to increase a global shortage, which is the worst in decades, according to Olam International Ltd. Supplies will fall short of demand by 350,000 MT in the season ending Sept. 30, 14% more than a previous estimate. The strongest Sahara desert winds in three decades dried out the smaller of two annual crops in West Africa, which accounts for 70% of global output, at a time of falling production in Indonesia. Low-quality beans and falling supplies led factories in producing nations to scale back, leaving buyers scrambling for cocoa butter. In July, prices reached a 6-year high, overtaking levels reached during the civil war in Ivory Coast, when a ban was imposed on shipments from the world s largest producer. Since this year s peak, futures have fallen 10%. The slowdown in grindings from producers such as Ivory Coast and Indonesia has increased the cost of cocoa butter relative to bean futures. The ratio has climbed more than 20% in Europe this year. 9 The development of next season s crop, which usually starts in October in Ivory Coast, is late and bean deliveries will not be good in October. While Olam expects an average to slightly-above-average Ivorian harvest next season, the delayed development means the crop remain vulnerable. Meanwhile in Ghana, the position is similar to last year, which according to Olam is not good. [Bloomberg 16/09/16]

11 Cameroon Cargill To Share 1.4 Million In Premiums Cargill will share more than 1.4 million among its cocoa farmer-suppliers to recognise their efforts in becoming certified under its Cocoa Promise initiative. The payments directly reflect the growing demand for certified cocoa products. [Foodbev 07/09/16] Doubled Certified Exports In Season According to official statistics, roughly 20,000T of certified cocoa were exported by Cameroon during the season, which ended in July. This production is an increase of 100% compared to the previous season, at the end of which 10,000T of certified cocoa were exported from Cameroon, against 5,400T only during the season. Such enthusiasm for certified cocoa is primarily the result of certification programmes implemented for some years by companies such as AMS, subsidiary of Dutch Theobroma; Sic Cacaos, Cameroonian subsidiary of Swiss Barry Callebaut; or Telcar Cocoa, trader of the American firm Cargill. There are also premiums paid to certified cocoa producers, as a reward for the additional effort made by farmers in following crop management sequences and other obligations which are inherent in production. [Business in Cameroon 14/09/16] Dry Stretch Expected To Cut Output Cocoa production in Cameroon could slip by around 10% in the just started season compared to last season s crop, due to months of dry weather. Cameroon harvested a cocoa crop of 269,495 tonnes, an increase of nearly 16% from the previous season. It is targeting production of 600,000 tonnes by But exports were down nearly 41 percent in August, the first month of the 2016/17 season, and growers and sector officials say the slump will likely continue. [Reuters 15/09/16] 10

12 COCOA Cameroon. Exports Down Nearly 41% In August Cameroon exported 4,895 MT of cocoa in August, the first month of the 2016/17 season, down nearly 41% from 12,056 MT shipped during the same month last year, data from the National Cocoa and Coffee Board [NCCB] showed. Leading exporters were Telcar Cocoa Ltd with 2,257 MT followed by Olam-Cam, the local unit of Olam International, with 1,442 MT shipped. Cameroon Marketing Commodities [CAMACO] exported 777 MT. Cameroon s cocoa season runs from August to July. The NCCB said the drop in August s exports was due to a longer dry season than the previous year, which had an impact on production. Production rose nearly 16% y-o-y to 269,495 MT in the 2015/16 season. The government is aiming to boost annual output to 600,000 MT by [Reuters 14/09/16] Farm-Gate Prices Stable In September Cameroon cocoa farmgate prices were largely unchanged in September from the previous month as harvesting remained slow and poor road conditions hampered bean collection. Prices ranged from 1,000 CFA francs/kg ($1.71) in the southwest to 1,200 CFA francs in the centre region. The prices were below the National Cocoa and Coffee Board s (NCCB) indicative price range of 1,225 to 1,400 CFA francs/kg. Cameroon s 2016/17 cocoa season opened in August when purchases were down 41% from the same month last year. [Reuters 22/09/16] Heavy Rains & Bad Roads Hamper Deliveries Cocoa deliveries in Cameroon have dropped sharply so far this season as heavy rains render roads impassable and slow the bean-drying process. The situation, caused by badly maintained rural tracks, could take weeks to improve, according to Cameroon s National Coffee and Cocoa Board, potentially causing a prolonged drop off in deliveries to the port of Douala. Cameroon s cocoa production rose nearly 16% y-o-y to 269,495 MT in the 2015/16 season. Cameroon has targeted annual production of 600,000 MT by [Reuters 13/09/16] 11

13 Cote d Ivoire Six Days To Supply Documentation For Export Contracts International cocoa exporters are preparing to snatch some bargains in next season s main crop exports after the marketing board threatened to cancel and resell some contracts. In a memorandum issued on 7th September, the Coffee and Cocoa Council [CCC] gave exporters 6-days to supply documentation for export contracts, including proof of a counterparty, in an attempt to stamp out speculation in the forward sales system. Exporters and a finance ministry official said up to 250,000 MT of exports could be resold under the measure. Shippers who don t present the documents will be suspended from auctions for a month and pay a penalty of 15 CFA francs/kg [3 cents] if the beans from cancelled contracts are resold at a loss. The CCC s demand for paperwork came after small, domestic operators purchased contracts for the 2016/17 season, which opens in October, at auction without securing a price with off-takers. World prices have since dropped and left those exporters unable to execute the contracts. Cote d Ivoire will on 28th September announce the fixed per-kilogram price it will pay to cocoa farmers from October. [Reuters 13/09/16] Cote d Ivoire Adjusts Transport Costs In Pricing Scale Cote d Ivoire s cocoa marketing board will adjust its pricing scale for the season to compensate middlemen who travel further from the top producer s 2-ports to buy beans. Under a system established 4-years ago to guarantee a minimum price for its farmers, the CCC established a pricing scale meant to factor in costs at various points along the supply chain. The current pricing scale sets farm-to-port transport costs at 20 CFA francs/kg [$0.034] of beans regardless of where in the country they were collected. However, farmers in areas far from the ports of Abidjan and San Pedro complained that that merchants were deducting additional costs from the government-guaranteed farmer price, which was fixed at 1,000 CFA francs per kg this season. When the new season opens next month, middlemen delivering cocoa to exporters at the ports will see the prices they receive based not only on the quantity of beans but also on their travel distances. The CCC will also request that transporters deliver their bean cargoes to the closest port. [Reuters 15/09/16] 12

14 COCOA Cote d Ivoire. Prospects More Favourable For Prospects for Cote d Ivoire output in look much more favourable according to the International Cocoa Organization [ICCO], even as it slashed hopes for the current season, driving world deficit expectations higher. A downgrade by the ICCO of 51,000T, to 3.99 million T, in its forecast for world cocoa production in was fuelled by reduced expectations for Cote d Ivoire. The estimate for Ivorian production, which accounts for some 40% of world output, was downgraded by 80,000 tonnes to 1.57 million T a drop of 226,000T y-o-y. Dry weather and severe Harmattan conditions that have prevailed impacting on quality, as well as quantity. The disappointing harvest has hurt the country s growing cocoa processing sector, as well as producers, prompting the ICCO to cut by 30,000T, to 510,000T, its forecast for the Cote d Ivoire cocoa grind in , which ends this month. The ICCO raised by 32,000T, to 212,000T, its estimate of the world cocoa production deficit in , and cut by 56,000T, to 1.38 million T, its forecast for end-of-season inventories. The ICCO also flagged cause for optimism over cocoa output in Ghana, the second-ranked producing country after Cote d Ivoire, citing government support, through measures such as education as well as free seedlings. However, it signalled cause for concern over prospects for Brazil, for which the production estimate was downgraded by 45,000T to 135,00T, representing a 41% slump year on year. [Agrimoney 01/09/16] Rainfall Encouraging For Main Crop Outlook Abundant rainfall recently in most of Cote d Ivoire s main cocoa growing regions bodes well for the start of the main crop which kicks off officially in October. Farmers expect sunny spells to strengthen the growth of beans after the rainfalls. Plentiful rain and favourable growing conditions have generally been reported across most regions. [Reuters 13/09/16] Port Arrivals Down 16% Cocoa arrivals at Ivorian ports reached around 1,465,000 MT by Sept. 11 since the start of the season on Oct. 1, down from 1,748,000 MT in the same period of the previous season. Exporters estimated around 8,000 MT of beans were delivered to Abidjan and San Pedro ports from Sept down from 16,000 MT during the same period last year. [Yahoo 13/09/16] 13

15 Cote d Ivoire. Exporters See Sharp Early Season Output Fall Exporters predict output will fall up to 200,000 MT in the first 3-months of the 2016/17 season compared to the same period of the current crop due to poor rainfall and a lack of carryover stocks. Port arrivals are down nearly 15% with stakeholders expecting little improvement when next season opens at the start of October, as rainfall has fallen short of expectations since June. Cote d Ivoire typically produces around 40% of its total annual output in the first 3-months of the season and harvested 859,821 MT of beans from October through December of last year. Exporters predict 660,000 to 710,000 MT noting that poor rainfall has increased mortality rates, resulting in fewer pods on trees than usually seen at this point in the season. Early season output is typically boosted by cocoa held back by merchants in anticipation of a higher government-guaranteed price. Exporters also generally have beans warehoused at the ports of San Pedro and Abidjan at the end of each season. However poor production in recent months has meant there is little late-season cocoa available for stocking, another factor likely to deflate arrivals and fuel competition among exporters as the 2016/17 season opens. [Reuters 23/08/16] Cote d Ivoire Cracks Down On Contracts The Ivorian cocoa marketing board has given exporters 6-days to supply documentation for export contracts, including proof of a counterparty, or they will be cancelled and resold, according to a memorandum from the Coffee and Cocoa Council [CCC]. The measure, aimed at stamping out speculation in the top grower s forward sales system, could lead to the resale of 200,000 to 250,000 MT worth of cocoa contracts. Exporters said the CCC had taken the step after realising that small, domestic operators had purchased contracts for the 2016/17 season, which opens in October, at auction without securing a price with off-takers. World prices have since dropped and, having failed to hedge, those exporters are now facing heavy losses. International exporters are required to provide the terms agreed with a counterparty and a deposit equal to 2.5% a contract s value within 1-week of its purchase. But local exporters pay no deposit and must only submit their documentation before the start of the season. Larger exporters complained this level of leeway for domestic operators opened the door to abuse as there is a lack of transparency. The CCC memorandum stated that operators who see their contracts cancelled and re-auctioned ahead of the October start of the season will have to pay a penalty of 15 CFA francs per kilogram if the contracts are resold at a loss. For contracts resold after the season s opening, an adjusted penalty will be applied. Exporters will be banned from participating in the auctions until they have cleared their penalties. [Reuters 09/09/16] 14

16 COCOA Ghana COCOBOD To Borrow US$1.8 Billion To Finance Cocoa Purchases The Ghana Cocoa Board (COCOBOD) on September 21st signed an agreement with a consortium of banks for a loan facility of US$1.8 billion to be used to finance cocoa purchases in the 2016/17 cocoa season. COCOBOD completed the repayment of the 2015/16 loan in August, this year, paving the way for it to sign for a fresh set of funds. The size of the loan, which was signed in Frankfurt with 24 banks, is equal to the amount secured last year. Ghana will use the funds to purchase 850,000 to 900,000 MT of beans from farmers. According to Cocobod the loan, the largest pre-export soft commodity financing facility in sub-saharan Africa, was oversubscribed by US$640 million. Lead arrangers were Deutsche Bank, Natixis, Cooperative Rabobank, Bank of Tokyo Mitsubishi, Nedbank, Societe Generale, Standard Chartered Bank, Ghana International Bank and DZ Bank. Ghana is expected to produce about 780,000 MT of beans in the current season, up 11% from 2014/15. Although the country had hoped to produce around 850,000 MT but that level was reduced due to severe and prolonged drought between December and March. 15 Meanwhile output is set to rise in 2016/17 to at least 850,000 MT. The 2015/16 season is due to close at the end of September. While production has increased compared with what some considered a failed crop of 740,000 MT last year, 2015/16 output will fall short of an initial forecast of 850,000 MT. [Reuters 21/09/16]

17 Ghana. Ghana To Boost Output To Over 1 Million Tonnes/Year President Mahama announced that Ghana will introduce Public-Private Partnerships [PPP] in the cocoa sector in a bid to increase production to over 1 million tonnes a year from its current level of around 750,000 T/yr. Mahama was delivering a speech to introduce highlights of the ruling party s manifesto ahead of an election in December. [Reuters 13/09/16] HFC Bank Investing In Cocoa Sector HFC bank has announced a 100% increase in its investment to Ghana s cocoa sector as part of efforts to improve production in the sector. According to the bank, it expects to increase its contribution from the 90 million cedis to million cedis within the season. [Citi97.3fm 22/09/16] Cargill Expands Activities Cargill is expanding its activities in Ghana. The Minneapolis-based trader is setting up a license-buying company to source beans directly from the Ghana Cocoa Board. The company expects to start its Ghanaian sourcing next season. [Bloomberg 16/09/16] Ghana Launches First Foreign Exchange Auction From Cocoa Loans Ghana will start its first foreign-exchange auction by inviting bids for the proceeds from the cocoa regulator s syndicated loans as Ghana seeks to liberalize its currency markets. The country will start with a rules-based market-driven auction. The auctions will start after the Ghana Cocoa Board raised dollar-denominated loans from international banks for paying farmers in the next harvest, which starts in October. Until now, the central bank bought the entire dollar loan from the cocoa regulator and lodged it as foreign reserves. The cocoa board is expected to agree a loan deal for as much as US$2 billion on Sept. 21 after raising US$1.8 billion last year. [Bloomberg 19/09/16] Cocobod Distributes Seedlings To Increase Production In a bid to increase cocoa production in the country, the Ghana Cocoa Board [COCOBOD] has raised and distributed 60 million quality hybrid seedlings and 4-million permanent shade tree seedlings. It intends to increase the number of nurseries to 332 across the cocoa belt. The seedling distribution represents a 10-million increase from last year s figures. The move is to raise the current level of production from 850,000 to 1.5 million tonnes annually. [Business News 17/09/16] 16

18 COCOA Ghana. Shortfall In Cocoa Beans Ghana is set to experience another bean shortfall of 130,000 MT for the 2015/2016 crop season when the light crop season ends this month. The country will bag about 720,000 MT of cocoa production against a target of 850,000 MT. The fall in production is due largely to inadequate fertilizers, ageing cocoa trees and lack of skills support. The shortfall comes on the back of 740,000 MT produced in the 2014/2015 crop season. A year before in the 2013/20014 season the nation registered about 900,000 MT. In May 2016, Parliament approved a US$2 billion cocoa syndication loan to enable Cocobod to purchase cocoa beans for the 2016/2017 Meanwhile, some indigenous licensed buying cocoa firms remain unhappy with the lack of support from government. According to them, Cocobod is making it difficult for the local LBCs to receive loans and guarantees from financial institutions. [Ghanaweb 09/09/16] Nigeria Cocoa Midcrop Yield Seen At 25-Year Low Nigeria s cocoa midcrop output is seen falling by as much as 70% this year from the previous season after unfavourable weather took a toll on the crop earlier in According to the Cocoa Farmers Association of Nigeria this season s midcrop harvest is the worst in the last 25 years particularly felt across the southwest which produces about 66% of the country s cocoa. Nigeria s two cocoa harvests include the smaller midcrop from April to June, and the main crop from October to December. The midcrop normally accounts for 33% of the country s output. A prolonged dry spell early this year has hurt the development of buds for the midcrop. According to figures compiled by Lagos ports shipments fell 12% in April, 31% in May and 65% in June. [Bloomberg 25/08/16] Nigeria Slips To 7th Position As Cocoa Producer According to the International Cocoa Organisation Nigeria has dropped to 7th position from 4th as a top cocoa producer in the world. The rankings were based on the country s 2015/2016 production projection of 190,000 MT. The production of individual countries, according to the ICCO, is based on cocoa beans purchased or reaching the ports of the countries concerned and consequently, may differ from the harvested crop. The Cocoa Association of Nigeria has expressed optimism that the new planting season would yield 280, ,000 MT provided that the production factors were favourable. [Naija247 19/09/16] 17

19 Tanzania Farmers To Profit From Laboratory Services The Tanzania Coffee Research Institute [TaCRI] Crop Productivity and Quality Improvement Programme now offers state-of-theart laboratory services to growers, such as soil analysis as well as that of water and leaves to coffee stakeholders. [Daily News 04/09/16] 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 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep

20 COFFEE Regional Brazil Drought Raises Coffee Prices For EAC Farmers Coffee farmers in Uganda, Kenya and Tanzania are set to benefit from a global recovery of prices sparked by dry weather in Brazil. Coffee futures rose to an 18-month high on the US ICE Features market over fears that dry weather in Brazil could hurt production. [Exchange 07/09/16] Angola Angola Plans To Boost Production The Angolan National Coffee Institute of Angola [INCA] has launched a programme to triple annual production of coffee to diversify the economy. Production in 2015 was 12,000 MT, or 20 times less than in 1974, but this could increase to 17,000 MT in Exports in 2015 reached US$2 million compared to US$650 million in The destruction of the coffee industry was a result of civil war and a change in the workforce which were hired from the South to work in the North of the country. With an approved Government budget of 1 billion kwanzas for the sector from 2017 it will be possible to plant 25 million coffee seedlings increasing the area of cultivation by 500-1,000 ha. Coffee is now produced in 10 of Angola s 18 provinces including Cabinda, Bengo, Kwanza Sul and Kwanza Norte, Uíge, Benguela, Huambo, Bie, Malanje and Huíla. The production structure comprises about 50,000 producers registered throughout Angola, of which 98% are family farms. Coffee is exported to Spain, Germany, France, Italy, Portugal, the Netherlands and Lebanon and is also attracting the interest of the United States, Middle East and Russia. [Macauhub/AO 13/09/16] 19

21 Uganda Government To Accelerate Coffee Production The Ugandan Government has prioritised coffee, tea and citrus fruit growing in a bid to move the country to middle income status by the year It is to targets the acceleration of coffee production from the current 3.5 million bags to 20 million bags by According to Operation Wealth Creation [OWC] programme officials, at least 300 million coffee seedlings will be planted annually for the next 3-years. The drive is being spearheaded by the Coffee Development Authority [UCDA] in partnership with OWC, local governments and the Prime Minister s Delivery Unit [PMDU]. According to a recent survey the coffee survival rate stands at 40% faced with dry conditions, poor management and lack of technical skills. Identified leading districts in coffee planting as Kasese, Mubende, Mityana, Kyegegwa and Kamwenge. [Monitor 12/09/16] 20

22 COTTON & TEXTILES & LEATHER Regional EAC To Phase Out Second-Hand Leather & Apparel Goods 21 The East African Community [EAC] Secretariat is planning to facilitate for the phasing-out of second-hand leather and apparels products, in line with a directive of the last EAC heads of state summit. The 17th Ordinary Summit of the EAC heads of state directed partner states to procure their textile and footwear requirements where quality and supply are competitively available. The view is to phase out importation of used textiles and footwear within 3-years. [African Review 05/09/16]

23 Burkina Faso Africa s Top Cotton Grower Sees Good Crop After Monsanto Ban Burkina Faso decided in April to halt the production of genetically modified cotton as the short fiber was hurting its reputation and cutting revenue. Thirteen years after the variety known as Bt cotton was introduced by Monsanto Co., the country s 3-cotton companies and the producers association told farmers to sow only conventional seeds from July. The cotton season started with sufficient rains, leaving Burkina Faso on track to reach its target of 750,000 MT in the season, up from 581,000 MT in the previous season. Burkina Faso is currently in talks with Monsanto for compensation, saying it s lost an estimated 48 billion CFA francs (US$82 million) in revenue. The short length fiber meant that the nation s cotton missed out on a per-kilogram (2.2-pound) bonus of 20 francs for the past three seasons. [Bloomberg 19/09/16] Mali Mali Predicts Record Cotton Production Of Over 650,000 Tonnes Mali expects to hit a cotton production record of more than 650,000 MT this year after farmers increased their growing area by 14%. The state-owned Malian Company for Textile Development [CMDT] noted the yield would surpass a previous production record of 620,000 MT achieved more than a decade ago and equates to a 27% increase from last year s yield of 513,000 MT. Farmers planted around 700,000 ha this year, surpassing the initial target of 614,000 ha. Mali s cotton season runs from April and includes a growing phase from around May to October and a harvesting and sales period from roughly October to March. Mali is West Africa s biggest cotton producer with around 3.5 million cotton farmers. [Reuters 14/09/16] Tanzania Drop In Quality Across Western Zone According to the Tanzania Cotton Board [TCB] the quality of this year s cotton has dropped across all the districts in the Western Zone of Tanzania. Only Meatu, Maswa and Bariadi districts in Simiyu Region have produced quality cotton. Farmers often add foreign particles in a bid to cheat on the weight. Last month 30 farmers from the Western Zone were fined Sh10 million for tampering with weights of their produce. Meanwhile at least 120,000 tonnes of cotton has been bought with a target is to purchase 150,000 tonnes. During the last cotton buying season, production dropped by 26% compared to the previous season 2014/15 where nearly 150,000 tonnes were bought. [Yarns & Fibres 15/09/16] 22

24 FISH Angola Uniangola Invests In Expansion Of Its Fishing Fleet Uniangola is to expand its resources for catching, freezing and packaging fish following an investment of US$3.75 million signed with the Ministry of Fisheries. Under the contract Uniangola will purchase a new boat, increasing its fishing fleet from two to three units. Uniangola is an Angolan company dedicated to sea fishing and has its headquarters in Luanda, with its current fleet of two ships, it catches between T. [Macauhub/AO 23/09/16] Kenya Fisheries Management Law President Uhuru Kenyatta has signed into law the Fisheries Management and Development Bill 2016 which provides for the conservation, management and development of fisheries and other aquatic resources. The Act gives guidance on the import and export trade of fish and fish products, fish quality and safety among other provisions. It also establishes the Kenya Fisheries Services and the Kenya Fisheries Advisory Council which ensure the appropriate conservation, development of standards on management, sustainable use and protection of the country s fisheries resources. [Investment News 04/09/16] Namibia Declares Mussels, Shellfish Unfit During routine tests undertaken as part of the National Shellfish Sanitation Program on Mussels and Oysters from Walvis Bay and Swakopmund areas were shown to carry the diarrhetic shellfish poison. The Ministry has, therefore, shut down the sales of these products until the further notice. [Global Times 17/09/16] 23

25 FOODSTUFFS, LIVESTOCK & BEVERAGES Kenya Tropical Heat Limited To Build Spice Factory Leading manufacturer of spices and snacks, Tropical Heat Limited, is set to construct a mega factory in Kenya to boost its production capacity. The US$ 4.5 million facility is supported by International Finance Corporation [IFC]. The new factory will be constructed on 5,200 m2 in 8-acres in Limuru area and it is part of the company s expansion plan that includes introduction of new products. Construction is ongoing and is expected to be complete by the end of [CR 06/09/16] 24

26 FOODSTUFFS, LIVESTOCK & BEVERAGES Nigeria Flour Mills Targets Export To Europe Flour Mills of Nigeria has exported 10% of its locally processed soya bean products for the first time to feed mills in Europe and North Africa helped by a weaker domestic currency. It exported 15,000 T of soya bean products from its plant in Ibadan after Nigeria floated its currency in June, which made the company s products competitive abroad. The naira lost a third of its value. Flour Mills plant, one of the largest soya bean mills in Africa, mills about 150,000 T of soya beans a year into ingredients used for animal feed and vegetable oil. The firm aims to grow its use of local raw materials each year by 10% over the next 5-years. [Reuters 21/09/16] South Africa Poultry Producers Under Threat From Cheap Imports South Africa s poultry industry is battling for survival in the face of stiff price competition from producers in Brazil, the European Union and the United States, as well as the worst drought in a century, the South African Poultry Association [SAPA] said. The June scrapping of 15 years of punitive duties on US chicken imports opened the door to 65,000 T/yr, adding to products from the EU and Brazil. About a dozen smaller producers have closed or been sold. [Reuters 05/09/16] 25

27 FRUIT, VEGETABLES & HORTICULTURE Cameroon PHP To Increase Banana Production To 230,000 Tons The Société des Plantations du Haut Penja [PHP], the Cameroonian subsidiary of Compagnie Fruitière de Marseille, which operates banana farms in the Littoral region of the country, plans to produce 230,000T of bananas by 2020 against 168,000T in In addition to the 3,000 ha which it already operates in the Moungo District, in the Littoral region, PHP announced the creation of new banana farms covering 800 ha in Dehane in the South. Leader in the banana industry in Cameroon with close to 50% of the national production, PHP is the result of the mergeracquisition of Société des Bananeraies de la Mbome [SBM], Société des Plantations Nouvelles de Penja [SPNP] and Plantations du Haut Penja [PHP]. During 2016, its production is expected to be 185,000 tons, an increase of 17,000 tons compared to [Business In Cameroon 01/09/16] 26

28 FRUIT, VEGETABLES & HORTICULTURE Kenya National Horticulture Traceability System Launched The Ministry of Agriculture, Livestock, and Fisheries [MOALF] through Horticultural Crops Directorate [HCD] of Agriculture and Food Authority [AFA], the Kenya Agriculture and Livestock Research Organization [KALRO] in collaboration with the horticulture exporters Associations of Kenya [FPEAK and KFC] and the United States Agency for International Development [USAID, through its Kenya Agricultural Value chain Enterprise [KAVES] project; have developed an online National Horticulture Traceability System [HTS]. The cloud-based system is unique to Kenya and will make it possible for any shipment that does not comply with market standards on arrival in the export market to be traced back to source, and remedial action taken immediately. Kenyan horticulture exports are currently valued at US$888 million p.a with 80% going to EU markets. [AFA 12/09/16] Kenya Signs Avocado Deal An agreement has been signed between Kenya and Israeli Guri Avocados to encourage avocado growing in Kiambu. Poised to become a major export item, the avocado already constitutes about 17% of exports to Israel. The deal will provide for a modern avocado seedling nursery equipped with state-of-the-art technologies. [Fresh Plaza 25/08/16] Morocco Agribusiness Expanding Production The European Bank for Reconstruction and Development (EBRD) is bolstering Morocco s agribusiness sector with a 2.5 million senior loan to Maïsadour Maroc and Maïsadour Agri Maroc, subsidiaries of Groupe Coopératif Maïsadour, an important French agricultural cooperative. The EBRD financing will help Maïsadour to expand its production of quality fruit and vegetables in Morocco and particularly the rural region of Souss-Massa in southern Morocco. [Fruit Plaza 22/09/16] 27

29 Nigeria Fruit Exports Facing Challenges Member of the Nigeria-Vietnam Business Association noted that fruit and vegetable exporters are facing challenges shipping their fresh produce abroad due to a lack of standard packaging materials and a certification process, which hinders Small and Medium Enterprises [SMEs] from accessing international fruit markets. Exports also face problems with quality. At present new standards emerging on efficient packaging materials for foreign markets cannot currently be met by local exporters. Packaging needs to be adapted to stabilise fruit and vegetable exports. [The Nation 09/09/16] Rwanda Rwanda Targets Flower Exports As part of export promotion and diversification, Rwanda wants to more than double its flower exports by the end of the year, thanks to the country s flagship project Gishari Flower Park project and Bellow flowers. The idea is to be able to increase flower production to at least 44,000T/yr that can generate export receipts of up to US$140 million by [New Times 06/09/16] Rwanda Builds Its First Avocado Factory Rwanda is set to build its first avocado processing factory in 2017 in Huye, which will start processing avocado based products by This will be the first factory of its kind in the country and is expected to boost the economy. The factory will be able to process soap, wine, oil and Vaseline. [Rwandaeye 21/09/16] Sierra Leone Dole To Invest In Agricultural Sector Dole Packaged Foods have developed a design and completed a feasibility study, impact assessment on the environment and the identification of the portion of land for a nursery plantation in in Lugbu Chiefdom in Bo District. [SL News 31/08/16] 28

30 FRUIT, VEGETABLES & HORTICULTURE South Africa Citrus Exports To EU Get Extended Zero Tariff Period 29 At the moment South Africa has a tariff free period for exports to the European Union [EU] countries which ends on 16th October every year, when tariffs then increase to 16%. But this is about to change as, recently, the South African Customs Union signed an Economic Partnership Agreement [EPA] with the European Union to extend the tariff free period over a period of 10-years. There will be a reduction of 1.8% per year over the 10-years. [Citrus Growers Association 30/08/16]

31 Sudan Government Invests US$100 Million In Fresh Produce Cultivation The Sudanese Government has budgeted US$100 for the next 5-years to support for agricultural and horticultural projects. This allows investment in cultivation and improves quality of farming techniques. Fruit, including limes and bananas, are already being exported to the Netherlands from Sudan. And trial shipments are being made to German and Italian companies. Sudan also attended the Macfrut fair for the 2nd time. [Fruit Plaza 22/09/16] Zimbabwe Zimbabwe To Scrap Horticulture Export Permits In order to boost production and encourage exports, the Zimbabwean Government has pledged to scrap horticulture export permits. Horticulture used to be a major sub-sector in the Zimbabwean economy with quick export returns of about US$143 million at its peak in 1999/2000. However, the country has realised only US$54 million from exports of horticultural produce in However earnings are minute when compared to US$1.2 billion annual export earnings of Kenya. Further support will include incentives targeting crops such as flowers, fruits, coffee, tea and other crops that have quick turn-around. Export restrictions in the form of permits will be removed as part of the ease of doing business. Zimbabwe s horticultural exports to the EU last year amounted to a mere 0.10% of the regional bloc s overall horticultural imports market. Zimbabwe s significant markets for horticultural products in the EU in 2015 were the Netherlands, United Kingdom and Germany. [Chronicle 13/09/16] 30

32 PALM OIL & OILS Cote d Ivoire DekelOil Hits New Half Year Palm Oil Production Record Dekeloil Public Ltd announced record half yearly palm oil production, turning out some 28,550 T of crude palm oil (CPO) in the 6-months ended June 30. It marks DekelOil s first full half year producing with a new kernel crushing plant, and confirms it is operating in line with the strategy to increase sales and profitability at the Ayenouan palm oil operation in Côte d Ivoire. Revenue was up 23.6% to 16 million, from 12.9 million, while earnings rose 34.8% to 3.1 million. [Proactive Investors 21/09/16] Democratic Republic of Congo Palm Oil Startup Sees Growth Chance Sicovir, a Democratic Republic of Congo [DRC] palm-oil processor, plans to establish a plantation and a refinery for the crop. The company, founded 3-years ago near Beni, is expanding after it invested US$4.5 million in a processing facility, that produces as much as 30 MT of soap a day, sourcing palm oil from small growers in the area. The factory began production in April. [Bloomberg 29/08/16] 31

33 Ghana Sustainable Palm Production Conference Sets Up Development Board Experts attended a 2-day Africa Sustainable Palm Oil Conference in Accra, to discuss how to position businesses on the continent to adopt best practices in sustainability. Organised jointly by Proforest, Roundtable on Sustainable Palm Oil and Solidaridad, the meeting sought ways to mainstream small producers ability to access global supply chains. Currently, Africa produces about 5% of global output of palm oil but consumes at least 10%. Closing the gaps in the sector and producing oil palm sustainably would require concerted efforts from governments, regional bodies, research institutions, private financiers, investors, and technocrats, to ensure the proper understanding and utilization of oil palm. Small growers and artisanal millers, who contribute about 80% of Africa s total annual output, must be repositioned to play their roles in a more sustainable manner so as not to be outplayed in the market. Meanwhile, the Cabinet has given approval for the setting up of the Oil Palm Development Board and that the Ministry of Food and Agriculture and the Attorney General are to work on the modalities as well as legal instruments to ensure the operations of the board. [GNA 09/09/16] Nigeria NIFOR, PZ Wilmar Sign MoU On Oil Palm Development PZ Wilmar signed a Memorandum of Understanding [MoU] with the Nigeria Institute of Oil Palm Research [NIFOR] to help develop Nigeria s oil palm. The Minister of Agriculture and Rural Development, Chief Audu Ogbeifun witnessed the signing of the agreement between the 2-firms. The MoU aims to promote research on how Nigeria could regain its position in palm oil production. PZ Wilmar has 3-locations covering 30,000-ha. [Nation 09/09/16] 32

34 SUGAR Regional Global Sugar Shortage 33 The International Sugar Organisation (ISO) released its first full-scale forecast for 2016/2017 indicating a looming sugar shortage. The report noted that the world sugar economy is facing a second season with an even bigger gap between world production and consumption. World production is projected at million tonnes, up by 2.2 million tonnes from 2015/2016. The improvement, however, is far too low to cover the growing use of sugar. World consumption in 2016/17 is projected to rise to million tonnes. As a result, a statistical deficit of 7 million tonnes is projected. A deficit of the projected magnitude will reduce the stocks - to consumption ratio in 2016/2017 to only 43%. [ISO 20/0916]

35 Kenya Sugar Imports Rise 67% On Low Output Sugar imports are set to rise by 67% this month as Kenya moves to plug a deficit caused by underperforming millers. The sugar directorate said it will import 12,000-15,000 MT this month up from 9,000 MT in August to boost market supply after the local millers cut down the stocks held at their factories. The regulator is acting to curb possible rise in retail prices that could result from the shortage of the commodity. The ex-factory price of sugar has risen marginally to an average Sh4,600 per 50 kg bag from Sh4,400 in July. However, the retail prices remain unchanged with a kilo going for Sh125. The millers, especially public-owned ones are underperforming and currently producing at half the installed capacity. So there is urgent need to privatise these public millers to improve productivity. The import quota per permit holders is currently between 500 and 1,000 MT of brown [table] sugar, which is largely used for domestic consumption. Import permits remain active for 45 days. Kenya normally imports its sugar from the Common Market for Eastern and Southern Africa [COMESA] and East African Community [EAC] member states. The imports are currently being trucked from Uganda or brought in as shiploads from Madagascar, Malawi and Zambia. Kenya s sugar consumption has increased by 3% in the last year pushed up by population growth. And consumption stood at 889,233 MT in 2015 from 860,084 tonnes the previous year. The statistics paint a picture of fast rising demand, far surpassing the 800,000 MT a year estimate. The directorate has commissioned a survey to ascertain the current requirement in Kenya. Production of sugar hit 632,000 MT last year from 592,000 MT in the previous year, making it the highest production in Kenya s history. The country is a sugar deficit relying on imports from COMESA to bridge the gap. Kenya has been allocated an annual quota of 300,000 MT of duty free sugar from COMESA. [Business Daily 14/09/16] 34

36 SUGAR Mali Two Sugar Refineries To Merge To Boost Capacity Mali s two sugar refineries will merge into a single company and increase annual capacity to around 200,000T as part of efforts to boost the sector and meet domestic demand. China National Light Industrial Corporation [SINOLIGHT] holds 60% controlling stakes in both the sugar mills, called N-Sukala SA and Sukala SA, with the Malian state owning the remainder. Together they currently have a potential annual capacity of around 145,000T. However the two refineries produced just 86,000T last season. Mali currently consumes 200,000T of sugar each year but is forced to import most of that. Following a 2012 army coup, South African group Illovo Sugar pulled out of the US$320 million Markala Sugar project, which would have produced 1.5 million tonnes of cane per year, citing political risk and funding difficulties. Since Illovo s withdrawal, the government has sought a new partner to take on the project. The government has now signed a Memorandum of Understanding [MoU] for Markala with India s Uttam Sucrotech Ltd. Currently, processes are underway to grant land. [Reuters 25/08/16] Mauritius Omnicane Sees 2016 Output Drop Omnicane Ltd., Mauritius s biggest sugar producer, expects its output to fall to 180,000 MT this year due to slow-maturing cane - a cyclical problem. The company produced 191,076 MT of refined sugar in However the nation s output could rise 9.3% this year to 400,000 MT as generally the country should be able catch up by the end of the year. Sugar cane is the country s main crop, making up 13% of overall exports last year. Omnicane, Terra Mauricia Ltd., Alteo Ltd. and Medine Ltd. are the biggest sugar producers in Mauritius. Mauritius wants to become a regional sugar hub by importing sugar, refining it and re-exporting it to mitigate against the end of a preferential trade agreement with the European Union. From 2017, the African, Caribbean and Pacific region and nations classified as Least Developed Countries [LDC] will no longer have a guaranteed market for 3.5 million tons of sugar in the bloc. Mauritius exports an average 300,000 MT to Europe annually. [Bloomberg 06/09/16] 35

37 South Africa Sugar Association To Forward Recommendations On Proposed Sugar Tax The South African Sugar Association says it has a number of recommendations for government before it signs off on the proposed 20% sugar tax, including deferring the date of implementation until all studies have been completed. The association noted the local industry needed time to adapt to the tax being introduced. [Eyewitness 21/09/16] Tanzania SADC Sugar Exporters Reach Amicable Position With Tanzania Major sugar exporters in the SADC region got a good deal for their industries with Tanzania committing to allow sugar imports from the region at preferential tariff rates. Additionally, it was agreed that sugar imports from countries outside the region, like Brazil and Europe, which is heavily subsidized will be imported into Tanzania at 100% duty which is the Common External Tariff [CET] on the product for the East African Community [EAC] Group. This follows Tanzania s application for derogation to impose 100% duty on sugar outside SADC and 25% for sugar originating in the region. Tanzania has an estimated annual sugar deficit of 100,000 MT for its local market that it fills with imports from the SADC region and beyond. Malawi, South Africa, Zambia, Mauritius and Swaziland are the major sugar producers and exporters in the SADC region. Tanzania had indicated the move is to enable its domestic industry adjust as it is undergoing restructuring. Ordinarily Tanzania was expected to commit itself to zero duty on sugar originating from SADC under the SADC Sugar Cooperation Agreement [Annex VII to SADC Trade Protocol]. A Special Meeting of the SADC Committee of Ministers of Trade [CMT] agreed that Tanzania be given a dispensation of 12 months to adjust while allowing SADC surplus producers, including Malawi, to export to Tanzania at 10% duty for refined sugar and 25% for raw sugar. The CMT urged Tanzania to adjust the duty of 10% upwards for refined sugar originating from third parties. [Nyasa Times 01/09/16] 36

38 TEA Kenya Task Force Comes Up With Radical Proposals For Tea Industry A team appointed by President Kenyatta to look into how to improve tea farmers earnings has come up with radical proposals that could change the way the highest export-earning industry operates. Among its proposals is restructuring of the Kenya Tea Development Agency [KTDA] and review of its contracts with farmers; reduction of levies and the establishment of a regulator for the industry, years after a similar body was scrapped. The task force was chaired by Mr Kagiri Kamatu and started its work last year. If implemented, the KTDA could lose the grip of the country s small-scale tea industry. The task force s report recommends a review of governance of the small-scale tea subsector, particularly in terms of employees of KTDA [MS] and directors of KTDA Holdings being board members of tea factories which are independent. Issues raised include lack of competitive bidding in the appointment of management agents for over 60 tea factories owned by about 600,000 small-scale farmers across the country. The KTDA charges 2.5% as management fee, which the stakeholders say is too high and want it reduced to 1%. [Daily Nation 28/08/16] Specialty Tea Export Drops 25% The value of specialty tea sold to the international market from Kenya dropped 12% after a slump in the economies of major buying countries following low oil prices. Statistics from the Kenya Tea Development Agency (KTDA) indicate Kenya earned Sh202 million in the year to June compared to Sh231 realised in the previous financial year. There was low demand of tea from Iran, Russia and Kazakhstan which are major buyers of the orthodox tea. Another reason is Kenya s fixed price on this type of tea, which is higher than in countries such as Sri-Lanka where the commodity is traded at the auction, making the price a bit lower. A kilogramme of tea in Sri-Lanka fetches Sh347 compared with Sh474 that it sells at in Kenya. Meanwhile the tea agency has installed specialty tea processing equipment in Kangaita in Embu, Itumbe in Kisii and Meru. Additional lines to process the orthodox tea will be rolled out in all the 12 tea zones by the end of next year. The 3-factories have a combined production capacity of 2.1 million kg. Last year, they produced 427,000 kg of orthodox tea, a decline from the previous year when output stood at 600,000 kg. Kenya also seeks to reach beyond the traditional markets of Egypt, Sudan, Pakistan and Afghanistan that are the major buyers of black tea. [Daily Nation 20/09/16] 37

39 Kenya. Farmers To Earn More In Bonus Payments According to the Kenya Tea Development Agency [KTDA] bonuses for the year will increase by 50% compared to last year where farmers are expected to pocket between Sh40-48/kg. [Standard Digital 31/08/16] Revenue Of Small-Scale Tea Farmers Jumps 32% Small-scale Kenyan tea farmers saw their revenue surge 32% to a record 84 billion shillings [US$830 million] in the year to June as strong demand pushed up prices and a weaker currency helped. The Kenya Tea Development Agency [KTDA] noted robust demand, improved tea prices, increased tea volumes associated with good weather, and favourable exchange rates in H drove up the average price per kg to US$3.01 from an average of US$2.63 in the previous financial year. KTDA accounts for about 60% of production. The rest is grown by large-scale farmers and corporations. Kenya expects production of tea to jump 10-15% this year to million kg on the back of heavy rains associated with El Niño. [Reuters 06/09/16] Prices Rise 6% At Mombasa Auction Tea prices at the Mombasa auction in Week 38 rose 6% on high demand and falling volumes. On average, a kilogramme of made tea sold at Sh233 compared with the Sh220 it attracted in the previous auction. The volume of the commodity offered also declined by 186,195 kg. Out of 105,711 packages (6,850,000kgs) available for sale, 92,579 packages (6,003,410kgs) were sold with only 12.42% untaken, according to East Africa Tea Traders Association. The prices, however, were lower compared to the same period last year when a kilogramme of made tea fetched Sh287. The Kenya Tea Development Agency (KTDA) has warned that earnings for this financial year will be affected by the low prices currently being witnessed at the auction and the prevailing cold season which will be followed by a dry spell. [Business Daily 23/09/16] 38

40 TIMBER West/Central Africa European Buyers In No Rush To Place New Orders 39 European buyers are now beginning to assess their autumn and winter demand but appear in no rush to place new orders. Importers in Italy have provided West African shippers with a very stable and steady flow of orders throughout the year in spite of difficult economic conditions in Italy. However, exporters say Italian buyers, are now slightly less active and this has pushed up ayous stocks at sawmills. A weakening of demand for sapelli and sipo was reported in August and this continues. Exporters in the Republic of Congo are said to be holding moderate and growing stocks of sapelli and sipo sawnwood. The change in fortunes for these two species is likely when buyers in Europe decide on purchases for the balance of the year. After the price movements reported in August nothing had changed by mid-september. [ITTO 1-15/09/16]

41 West/Central Africa. New Buying Season Begins Quietly In Europe As European companies get back to business after the summer vacation season some notable price changes for major species are beginning to emerge. This, say analysts, is most likely due to re-stocking and fluctuations in demand rather than any underlying strengthening of the market. Continuing weak demand for padouk in India and Belgium has resulted in falling FOB prices. At the same time demand in Europe for sapelli and sipo was depressed and this is reflected in the decline reported in FOB prices. The volume traded in both timbers generally declines mid-year and if past patterns can be relied upon then demand will pick up in readiness for Q4 sales. Prospects for the construction sector in most European countries have improved in the past year and there is a particular emphasis on the need for new house building in UK. [ITTO 16-31/08/16] Uncertain Demand Prospects Especially In The UK The UK referendum result and its impact, especially on sterling, is making it difficult for producers to anticipate how prices will move during the next few months. Buyers across Europe appear content to wait until post Brexit market trends begin to emerge. Middle East markets remain firm and prices have now stabilised, the result of improved distribution throughout the region. Demand from China has been reported as only moderate. Demand for okoume logs is particularly poor with demand being mainly for higher grades and veneer grade logs. Exports of belli continue but show no signs of returning to previous high levels. [ITTO 16-31/08/16] Kevazingo/Bubinga Export Possible But Only Fully Processed Products There are reports that exports of kevazingo/bubinga have resumed subject to very stringent conditions, including a requirement for tertiary processing to fully processed products such as furniture and doors. Before the current export restrictions China was the major buyer of kevazingo, preferring large dimension sawnwood but export of sawn kevazingo is no longer allowed although there are reports that one shipment was authorised. The trading status of kevazingo is still under consideration by CITES. [ITTO 1-15/09/16] 40

42 TIMBER Cameroon Deliveries To Douala Port Up 2.4% in H During H1 2016, the Société d Exploitation des Parcs à Bois du Cameroun [SEPBC], concessionaire of the wood terminal at Douala Port, increased deliveries by 2.4%. A total of 639,645 m3 of wood, equivalent to 464,199 m3 of logs and 17,446 m3 of lumber was delivered against 623,928 m3 over the same period in In March 2016 SEPBC WAS awarded the ISO 9001 version 2008 certification by Bureau Veritas for reception, storage and delivery of products. SEPBC will launch a FCfa 5 billion mooring berth in a few months which is currently under construction at Douala terminal. [Business in Cameroon 31/08/16] Gabon Investment In Veneer Plants After Myanmar, Laos, Vietnam and Indonesia, Gabon has emerged as a new location for veneer production by Indian companies. Greenply Industries has announced it plans to establish a veneer manufacturing plant in Gabon and this has prompted other companies to consider investing in Gabon. Reportedly 3-4 Indian plywood companies are considering setting up plants for the production of face veneer. Several producers from Yamuna Nagar also visited Gabon and have expressed an interest to invest in the country. Two companies in Gandhidham and one in Vishakhapatnam are also considering establishing units in Gabon s Special Economic Zone [GSEZ]. The GSEZ s industrial site is seen as offering many opportunities. The harvestable forest in Gabon is substantial such that raw material supplies are reliable. Some 20 investors from India have already settled in the GSEZ with sawmills, kiln drying facilities as well as furniture, veneer and plywood manufacturing units. The Indian plywood industry consumes approximately 1,400 containers of veneers every month and currently these come from Myanmar, Laos and China. However with the decision in Myanmar to halt logging importers have begun to look elsewhere. [ITTO 1-15/09/16] New Forest Code The government in Gabon has published a revised Forest Code. The original code was introduced in 2001 and required companies to share the revenues from timber harvesting with the local communities but the code did not set out procedures for this. As part of the new code an implementing decree and technical guide provides details on how the sharing of benefits can be achieved. The timber industries in Gabon have not yet formally commented on the new Code. [ITTO 16-31/08/16] 41

43 Ghana Q1 Exports To Regional Markets Fall The top export destinations for Ghana s wood products in Q were China, India, Vietnam, Germany and Italy which together accounted for just over 68,20,000 cu.m worth 38.7 million or 74% and 77% of total Q1 volume and value exports. In terms of volume China accounted for 33% while India imported 32%. Despite the significant expansion of export to Asian markets trade to regional markets weakened. [ITTO 16-31/08/16] China Top In First Half Export League The Timber Industry Development Division [TIDD] of the Ghana Forestry Commission has released H export figures. According to the TIDD Ghana earned million from the export of 194,000 cu.m of wood products, a 24% increase in value and an11% increases in volume when compared to the same period in Data from the TIDD showed that, compared to H1 2015, increases were seen in exports of curl veneer, kindling and air dried [AD] sawnwood. Markets in Asia accounted for almost 71% of total exported volumes, up significantly on Exports to Europe were up slightly but exports to the US and Middle East countries fell in H The leading buyers of Ghana s air dry [AD] sawnwood were the China, India and Vietnam which together accounted for 95% of all AD sawnwood exports. The US imported almost 80% of all curl veneers with the balance going to the UK. Exports of AD sawnwood to regional ECOWAS markets amounted to just over 115,000 cu.m in H1 of this year. The Chinese market is emerging as significant for exports of both AD and KD sawnwood. In total, exports of primary products [logs and billets] comprised just 9% of total export volumes in H1, down from almost 17% in In contrast, the volume of secondary product exports increased in H compared to the same period in Tertiary products exports which included mouldings and dowels fell as a proportion of total exports. Teak, rosewood, papao, wawa and ceiba were the leading species exported. [ITTO 1-15/09/16] Mozambique Log Export Ban Mozambique has banned the export of whole logs outright from 2017, regardless of the species, in an effort to encourage local processing and develop a sustainable timber market in Mozambique. Mozambique s long-term ambition is to develop a more sustainable timber market in the country, including developing a larger processing industry rather than just exporting the logs. Previously the government issued a partial export ban of first-class wood species in high demand from China, including Pau Ferro, in In late 2015, the Mozambique government expanded the ban to all raw timber logs for 2-years. [Guardian 01/09/16] 42

44 TOBACCO Malawi No Market For 45 Million KG Of Tobacco Malawi s key buyers gave local tobacco regulator, Tobacco Control Commission [TCC] their required ceiling for the 2015/2016 tobacco growing season which they said would be 120 million kg, however local farmers produced over 165 million kg of tobacco this year. This has resulted in an over production of about 45 million kg with no international markets to buy the crop. 43 The tobacco buyers claimed that demand for the leaf is declining because of high taxes in many countries which have been introduced as part of the worldwide anti-smoking campaign which is being champion by World Health Organisation. [Nyasa Times 07/09/16]