com-watch - issue 38 - july 2014 · ceec us$3.6 million loan for cashew nut industry the citizens...

AGEING FARMERS, LOW-YIELD CROPS HURT CAMEROON’S COCOA AMBITIONS

Full Story On Page 9

AFRICACOM-WATCH

Cocoa Prices Up To Near 3-Year Highs

ISSUE 38 | JULY 2014

Cameroon Coffee Production Drops To All Time Low

EAC Ministers Impose 100% Duty On Imported Sugar

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AFRICACOM-WATCH

ISSUE 38 | JULY 2014

Contents

03 /Banana & Plantain

04 /Cashew & Groundnut

06 /Cocoa

13 /Coffee

19 /Cotton, Textiles & Leather Goods

21 /Fish

22 /Foodstuffs

25 /Palm Oil

26 /Sugar

30 /Tea

33 /Timber

39 /Tobacco

Ageing Farmers, Low-Yield Crops Hurt Cameroon’s Cocoa Ambitions

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Cocoa Prices Up To Near 3-Year Highs 7

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26

Cameroon Coffee Production Drops To All Time Low

EAC Ministers Impose 100% Duty On Imported Sugar

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Rachel Bennett Dominic Rawle

Why Your Future Banana Could Be OrangeOrange is the new...yellow? If a group of scientists get their way, that could be true for a new breed of bananas. After almost a decade in development, human trials will begin with the genetically modified superfruit. Enriched with beta carotene, once ingested, is converted into vitamin A. Trials of the new bananas will likely last until year’s end and if the trials go well, the new bananas could be available for growing by 2020.

[CNBC 16/06/14]

African Taskforce Discuss Plans For Panama Disease TR4 FightA meeting, convened by the Southern African Development Community [SADC], discussed the findings of a taskforce set up to tackle problems with the potentially deadly Tropical Race 4 [TR4] strain of Panama Disease in African bananas. Its mandate is to curtail the introduction and further spread of the banana fungus. The virus reached the continent in 2013 when the Matanuska plantation, Mozambique, declared an outbreak. The Norwegian Investment Fund for Developing Countries [Norfund], an investment group owned by the Norwegian Government, partly funds Matanuska. TR4 has already been detected in three of the top 10 banana-growing countries – China, the Philippines and Indonesia – and there have also been outbreaks in Thailand, Malaysia and Australia. As well as migrating to Mozambique it was also discovered in Jordan last year, adding to fears that it will transfer across the world. Further meetings of the taskforce group will be held later this year.

[Fresh Fruit Portal 18/06/14]

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COMMODITY NEWSBANANA / PLANTAIN

GeneralACA World Cashew FestivalFor operational reasons, the 9th ACA World Cashew Festival and Expo 2014 on September 15-18 can no longer be held in Mombasa, Kenya as previously announced. The Association is finalizing details of a new date and venue to be announced directly.

[ACA 18/06/14]

Cote d’IvoireCashew Production Seen Rising 4.2% in 2014Cashew production in Ivory Coast, the world’s second-biggest producer, will climb 4.2% this year. According to the Cotton-Cashew Council production will be 500,000 MT compared with 480,000 MT last year. A drought in some growing regions during the second flowering in late March cut yields and lowered the production potential. The nuts are harvested from January to June, with a main crop running from January to April.

Smuggling into neighbouring countries, such as Burkina Faso and Ghana, dropped this year to about 5,000 tons from as much as 80,000 tons last year as border controls have been reinforced. Ivory Coast decided earlier this month to maintain the farmgate price at 225 CFA F/kg [US$0.46].

The Cotton-Cashew Council was set up last year to regulate the sector and assist farmers. It also aims to process 80% of its cashew production by 2020. Ivory Coast has a processing capacity of 60,000 tons a year.

[Bloomberg 3/04/15]

GambiaCashew, Sesame Sector Strategies LaunchedThe Enhanced Integrated Framework [EIF], National Implementation Unit [NIU], under the Ministry of Trade, Industry, Regional Integration and Employment [MOTIE], in collaboration with the International Trade Centre [ITC] launched the Cashew and Sesame Strategies developed under the Sector Competitiveness and Export Diversification Project [SCEDP].

The project provides support for the sectors covering development and trade information to improve competiveness and increased exports. Strategies involve both public and private sector while ensuring complementary and other national planning frameworks. It is the first time the cashew and sesame sectors have a guiding document that will give better focus and structural interventions to enhance protection and productivity.

[Daily Observer 20/06/14]

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COMMODITY NEWSCASHEW / GROUNDNUT

Guinea BissauUS$8.2 Million Loan For Cashew Production And Processing The World Bank has granted Guinea Bissau a loan of an amount of US$8.2 million to re-launch the economy aiming to increase the production of cashew nuts and to promote local processing, notably through the construction of 4-plants.

[Ecofin 13/06/14]

NigeriaAssociation Tasks CBN On Cashew Intervention FundThe National Cashew Association of Nigeria has concluded arrangements to acquire cashew processing equipment for its members to strengthen value addition in cashew production. The association will buy cashew processing equipment to develop the entire value chain. The Federal Government through the Central Bank of Nigeria [CBN] is to disburse a N10 billion Cashew Intervention Fund.

[NAN 06/06/14]

ZambiaCEEC US$3.6 Million Loan For Cashew Nut Industry

The Citizens Economic Empowerment Commission has approved a K22 million [US$3.6 million] loan facility to scale up Western Province’s cashew nut industry enabling the processing of large quantities of nuts to be fed into domestic and export markets. Financing would enable the growth of about 2.7 million new trees and go towards importing raw cashew nuts and new equipment. It will also fund experts to help train farmers and run the industry more efficiently to reposition Zambia as an export-oriented economy with the cashew nut sector being key. The projected gross annual turnover is expected to be K45 million by 2021.

[Post Zambia 17/06/14]

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COMMODITY NEWSCASHEW / GROUNDNUT

GeneralCME Plans To Offer Cocoa To Compete With NYSE LiffeCME Group Inc. plans to start a European cocoa contract to compete with NYSE Liffe. The contract would be listed on CME Europe in London and focus on physical cocoa movements into Europe. The exchange plans to offer the contract later this year or early in 2015, subject to regulatory approval.

NYSE Liffe, which was bought by Intercontinental Exchange Inc. in November, has tried to address concern that its contract prices don’t converge with the physical market. The bourse also reduced trading hours and set maximum delivery times from warehouses.

With a lot of physically delivered contracts, cocoa is all about the delivery mechanisms, whether it’s warehousing, delivery mechanisms, timing. It’s a very challenging space.

[Bloomberg 09/06/14]

Olam: Cocoa Shortage Cocoa is heading for a third consecutive shortage, the longest stretch in almost 50 years, according to Olam International Ltd., which supplies about 10% of the world’s production of beans. The shortage will help push prices at least 10% higher from now until the end of 2014. Output will lag behind demand by 100,000 MT in the current season or about 2.4% of production. Prices in London have already climbed 13% this year as shortages persisted led by growing worldwide demand for chocolate. A third consecutive shortfall would be the longest streak in 47 years, according to data from the International Cocoa Organization in London. Demand for cocoa powder will expand in Asia in the next 10 years to contribute more than 75% of incremental growth in total consumption. Usage of cocoa butter has grown 7% in the past 10 years in emerging markets, led by Asia.


Cocoa Production Is Good, But Not Good EnoughProduction in the world’s top grower of the key chocolate ingredient is booming, but rising consumption in Asian countries and the mounting threat of El Niño later this year are combining to send prices higher, regardless. Ivory Coast, the world’s No. 1 cocoa producer, will likely reap a harvest of around 1.8 million MT during the 2014-15 season that begins Oct. 1. That would mark a second year of record yields.

West Africa saw beneficial weather conditions for the cultivation of the cocoa crop, and the London-based International Cocoa Organization revised its forecast for the current season to a global supply surplus of 30,000 tons, from a deficit of 75,000 tons. But the ICCO expects a deficit in the 2014-15 season nonetheless. Cocoa prices rose to the highest level in nearly 3-years. Meanwhile, chocolate markers see demand growing. Mars Inc. expects global chocolate consumption to rise by more than 3% in the 2014-15 season, citing increasing appetite from consumers in China, India and Indonesia. Asian cocoa grindings increased 3.7% from the same period a year ago, according to the Cocoa Association of Asia. Analysts see futures hitting US$3,250 a ton in the near-term.

[Wall Street Journal 12/06/14]

El NiñoOne reason chocolate makers and investors are nervous: El Niño.

Temperatures in the Pacific Ocean are rising, prompting U.S. government forecasters to predict an 80% chance for El Niño by the end of the year.

El Nino is set in motion when winds in the equatorial Pacific slow down or reverse direction. That warms the water over a vast area and can upend weather patterns around the world.

The weather phenomenon typically reduces global cocoa output by 2.4% in a year that it occurs.

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COMMODITY NEWSCOCOA

Cocoa Prices Up To Near 3-Year HighsCocoa prices have jumped to near 3-year highs on the back of voracious demand for chocolate across Asia, in a move that will heap pressure on confectioners’ profit margins. Traders said that a wave of new processing facilities, built to feed rising chocolate consumption in countries including India and China, had added to demand for cocoa beans. Over the past 5-years, demand in Asia has risen 29%, compared with a fall of 1% in Europe over the same period. September cocoa rose 3.2% to US$3,128 a tonne on 19th June, to the highest level since August 2011.

The jump in price caps spectacular gains over the past 12 months, with cocoa up more than 40% from a year ago. Cocoa butter has surged more than 70%. The chocolate industry is growing increasingly worried about the long-term sustainability of cocoa supplies. The US$120bn global confectionery industry relies on ageing trees and small farms in west Africa, which barely have money to invest. Almost 90 per cent of the world’s cocoa supplies come from smallholders. In west Africa the average age of the cocoa farmer is said to be more than 50, and the younger generation are increasingly reluctant to stay on the farms. In the short term, supply worries have become less acute as output in the Ivory Coast and Ghana, which supply the bulk of the world’s cocoa, has been higher than expected this year. Favourable weather means that production in the Ivory Coast for the 2013-14 crop year is forecast to be about 1.7m tonnes, with Ghana expected to produce a record 900,000 tonnes. The International Cocoa Organisation expects a supply surplus of about 30,000 tonnes this year, instead of a deficit. This could ease the strain on the market, which for 2014-15 is expected to see a production shortfall of just below 100,000 tonnes.

[Financial Times 19/06/14]

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COMMODITY NEWSCOCOA

CameroonExports Reach 148,685 Tonnes By End-MayCameroon exported 148,685 tonnes of cocoa beans from the start of the 2013/14 season last August to the end of May, down from 200,915 tonnes during the corresponding previous period. According to National Cocoa and Coffee Board [NCCB] the nation shipped 2,268 tonnes of beans in May, down from 3,043 tonnes in March and 5,849 tonnes in the same month a year ago. However, the 2,268 tonnes shipped in the month represented a rise from 1,768 tonnes for the same month in the 2012/13 season. There were 13 exporting firms for May, up from 10 in April, with Telcar Cocoa Ltd leading after exports of 854 tonnes, followed by Olam Cam with 500 tonnes and Cameroon Marketing Commodities [CAMACO] with 351 tonnes. National output hit a record of 240,000 tonnes in the 2010/11 season before dropping to 220,000 tonnes in 2011/12 due to attacks by pests and diseases and a prolonged dry season. It rose to 228,948 tonnes in 2012/13. It will rise to around 235,000 tonnes in 2013/14, according to a NCCB forecast.

[Reuters 19/06/14]

Purchases By Cocoa Grinders Rise In MayCameroon’s local cocoa grinders purchased 30,820 tonnes of cocoa beans for local grinding by the end of May, up slightly from 29,205 MT in the same period last season. Purchases by leading grinder Sic-Cacaos, a subsidiary of Swiss chocolate manufacturer Barry Callebaut, stood at 30,025 MT by the end of May since the start of the 2013/14 season in August, up from 27,203 MT in the same period the previous season.

Sic-Cacaos bought 521 MT for the month of May, up from zero for the 2-previous months and from 467 MT in the same month a year ago. Chocolaterie Confiserie du Cameroun [CHOCOCAM], the second-biggest grinder, has made no purchase since February. Its total since the start of the season stands at 795 MT.

Sic-Cacaos processes raw cocoa beans into cocoa powder, cocoa cake and cocoa liquor which are sold in the 6- CEMAC nations, while CHOCOCAM, an affiliate of South Africa’s Tiger Brand, manufactures chocolate sold in Cameroon.

[Reuters 19/06/14]

Cocoa Farmgate Prices Drop Cocoa farmgate prices in Cameroon, the world’s 5th grower, dropped in all growing regions in June, after rising in May thanks to an early start to the light crop. There are few beans on the market and the number of buyers has also dropped. The price of cocoa beans ranged from 950 CFA F/kg to a maximum of 1,000 CFA, down from 1,180 CFA francs in May.

Cocoa is grown in Cameroon in 4 of the 10 regions. The Centre and South-West account for 40% each of national output, the South 15% and the East 5%. The season runs from August 1 to July 31, with the main harvest period from October to January/February and the light crop harvest from April/May to June/July. Cameroon’s national cocoa output hit a record of 240,000 tonnes in the 2010/11 season but slipped to 220,000 tonnes in 2011/12 due to attacks by pests and diseases and a prolonged dry season. It then rose to 228,948 tonnes in 2012/13, and is expected to rise to around 235,000 tonnes in the ongoing 2013/14 season.

[Reuters 08/06/14]

Cocoa, Coffee Treatment LaunchedFungicides and spraying equipment worth FCFA 177 million are to be allocated to South West farmers. The Minister of Agriculture and Rural Development [MINADER], Essimi Menye, noted this subsidy intends to rejuvenate aging farms and farmers, propel yields, fight fake agro-chemical products in the market and wrestle such pests as cocoa black pot and coffee leaf rust which had dropped production by 30-40% according to expert estimates.

[Tribune 16/06/14]

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Ageing Farmers, Low-Yield Crops Hurt Cameroon’s Cocoa Ambitions Cameroon’s ambition to triple cocoa production and become one of the world’s top 3-producers within a decade is being hampered by a failure to modernize ageing plantations and attract young farmers to the sector. Booming consumption, particularly in Asia, is expected to inflate demand for the main ingredient in the US$100 billion chocolate industry by about 1 million tonnes, or around a quarter of world production, by 2020. Forecast deficits pushed world prices to 33-months highs this month despite bumper crops from Ivory Coast and Ghana, the world’s top 2-producers.

Cameroon, the fifth-biggest grower, earns 250 billion CFA francs [US$523 million] a year from cocoa, accounting for about half its primary-sector exports. To ride the growth in demand, it aims to boost output to 600,000 tonnes per year by 2020, but industry experts and farmers are sceptical. Cameroon’s cocoa output has been erratic. It has oscillated between record production and sharp drops in recent years blamed on poor weather, disease outbreaks and lack of farming inputs. Losses due to disease and pests claim between 30-40% of Cameroon’s harvest, according to the industry regulator, the National Cocoa and Coffee Board [NCCB]. It forecasts output at 235,000 tonnes this season, although pan-African bank Ecobank said in a research note in March that production will likely slip again to about 190,000 tonnes. Exports were down 26.5% y-o-y in May. Meanwhile the NCCB noted increased fertilizer use, sustainable farm management and quality control could easily add 50% to crop yield.

At the heart of Cameroon’s ambitious plan is a drive to rejuvenate its trees, many of which are a half-century old. The government sees a solution in the Biofabrica growing technique developed by Brazil’s cocoa research institute CEPLAC, which selects and nurtures millions of disease-resistant high-yield cocoa seedlings for planting. Widespread use of the technique has potential to boost Cameroon’s cocoa yields from 300-500 kg/ha to around 2-3 tonnes/ha according to Cameroon’s Cocoa Development Authority [SODECAO]. But implementation has been slow, raising doubts about the government’s commitment. When the project was announced in 2009, the government said it would invest US$10 million on 20 million seedlings in the first year alone. But 5-years on, only a handful of nurseries have been established. Trees require 6-years to hit peak production and for Cameroon to reach its target, the program should have been running at capacity. Cocoa farmers are also aging - a study by the Cocoa and Coffee Interprofessional Council [CCIC] found that the average age of farmers ranged from 63 to 70 years depending on the region. Meanwhile young people are unaware of government-backed incentives aimed at drawing them into the cocoa sector. The CCIC launched its “New Generation” scheme in 2012 to lure young people to cocoa farming and create new plantations by funding agricultural schools and giving logistical and financial help to the new farmers. While 500 ha of new plantations have been created under the program and some 325 youth farmers have participated, such efforts are a drop in the ocean.

The sector is trapped in a vicious cycle. Ageing trees and a lack of investments have driven down yields, reducing volumes produced and lowering farmer incomes. Bean quality has suffered as a result, leading Cameroon’s reputation to nosedive. Cameroonian beans sell at a discount of about 400 CFA F/kg [$0.83] compared with their peers.

The NCCB regulator has pledged to invest 1.7 billion CFA F to rehabilitate 2,500 cocoa dryers in the main growing areas to reduce the presence of smoke in beans and reinforce controls in an effort to meet tougher EU quality standards. The NCCB has helped secure 1.7 billion CFA F [US$3.5 million] and has taken up the project again to help us eliminate the problem of smoky cocoa in the South-West region. The project’s re-launch last week coincides with the start of the rainy season in south-western Cameroon.

However, as the industry gears towards sourcing only certified traceable cocoa from sustainable farms by 2020, many worry that the poorest farmers may not be able to afford the required investments and could be left behind. A possible solution would be for buyers to play a greater role from farms to export, to guarantee supply. For example Theobroma has partnered with 2,500 Cameroon cocoa farmers. It will provide them with financing to enable the production of 4,000 tonnes of certified cocoa for the firm.

[Chicago Tribune 09/06/14]

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COMMODITY NEWSCOCOA

Cote d’Ivoire Ivory Coast Cocoa Reforms Leave Bittersweet TasteIn the past 15 years, the World Bank has been involved in not one but two shake-ups of the way Ivory Coast runs its vital cocoa sector. In the interim, the country descended into intermittent conflict. Competing interests side-tracked reform. Now, the head of the new cocoa authority hopes they have finally got it right.

Since late 2012, guaranteed prices have been reinstated for farmers, ending the liberalised system introduced under the previous reorganisation. Most of the harvest is now purchased in advance, and a revamped Coffee and Cocoa Council is trying to restore confidence in a sector struggling with ageing plantations, low yields and a history of racketeering. The sector’s future has been uncertain. The old system, controlled by a state marketing board, ran into deep deficit. Under the first reform, it was replaced by an array of mostly private-sector bodies, which were poorly and inappropriately managed. After conflict erupted in 2002, government and rebels both levied cocoa taxes. But last November, 15 former cocoa barons were jailed for up to 20 years for embezzlement. Cocoa reform, including a new framework and reduced taxation, was among conditions set by the World Bank and IMF for an overdue debt write-off, and was also linked to budget support from the bank. Matters were unresolved until Alassane Ouattara, a former IMF deputy managing director, became president in 2011 after a contested election. Exporters have welcomed the changes, and quality has improved. Minimum farm-gate prices – 60% of international market prices – were being rigorously enforced. The World Bank is now backing a public-private partnership [PPP] for cocoa in the country’s southwest.

[Financial Times 19/6/14]

Cocoa Forecast Raised To Record Ivory Coast raised its output target to a record after favourable rainfall in growing areas. The nation will harvest 1.6-1.67 million MT in the 12 months ending Sept. 30. The government’s estimate in October was 1.4-1.5 million MT. The previous record was about 1.5 million tons in 2011. In addition to


Arrivals Seen At 1,467,000 T By June 1Cocoa arrivals at ports in Ivory Coast reached around 1,467,000 tonnes by June 1 since the start of the season on October 2. In the same period of the previous season cocoa arrivals were at 1,238,000 tonnes. Exporters estimated that around 32,000 tonnes of beans were delivered to the 2-ports of Abidjan and San Pedro between May 26 and June 1, up from 22,000 tonnes during the same period last year.

[Business Recorder 02/06/14]

Prices Driven Higher By Asian / European DemandStrong demand from Europe and Asia is pushing up cocoa prices in top grower Ivory Coast and fuelling the smuggling of beans into the country from neighbouring Ghana. World cocoa prices have climbed steadily since the beginning of the year and hit a 33-month high due to expectations of a jump in chocolate consumption and fears of a supply deficit.

Ivory Coast set a minimum farmer price of 750 CFA F/kg [US$1.55] at the beginning of the 2013/14 season in October. The minimum price at the ports was fixed at 830 CFA F/kg with a ceiling of 845 CFA F/kg. Demand from Europe remains strong and now Asia is adding to that. Indonesia is asking for lots of beans. Exporters were paying up to 850 CFA F/kg at Abidjan port, breaking the price ceiling in order to ensure supplies of export-quality beans. Ivory Coast is currently harvesting its April-to-September mid-crop, most of which is typically bought by companies with local processing facilities due to the generally smaller size of mid-crop beans. However mid-crop quality has been good this season. The grinders are the biggest buyers.

Ghana set comparable farmer prices at the beginning of the season, Ghana’s currency has plunged around 28% since the start of the year, opening a significant gap in the 2-countries’ cocoa prices. Most of the farmers along the border sell in Ivory Coast. The Ghanaians prefer CFA francs and say the price is better in Cote d’Ivoire.

[Reuters 13/06/14]

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GhanaCOCOBOD Announces Closure Of Main Crop SeasonThe Ghana Cocoa Board announced that purchases of the 2013/14 main crop season would end on June 12. Returns on declared purchases would, however be accepted up to 1600 hours on June 19 to assist the Licensed Buying Companies to obtain final purchases returns from up-country stations.

[Ghanaweb 10/06/14]

Ghana To Raise Cocoa Forecast To 900,000 Tons Ghana raised its output target by about 5.9% to its highest level in 3-years. Farmers will harvest 900,000 MT in the 12 months that end Sept. 30, the most since 1.025 million tons were collected in 2011. The previous estimate was 850,000 MT. The main crop will be 850,000 tons and the so-called light crop will be 50,000 tons. The light crop is reaped during a second, shorter harvesting period. The main growing regions of Ghana received 110% of average rainfall in the 30-day period through the middle of May.


Ghana Plans To Overtake Ivory Coast As Top Cocoa ProducerGhana plans to overtake Ivory Coast as the biggest producer of cocoa in 3-years as the industry’s regulator boosts supplies of fertilizer to help farmers increase yields. Ghana has started training more farmers and helped them to acquire land. Free fertilizers and free spraying should help lift yields per hectare [2.47 acres] from 450 kg to 1,000 kg. Ghana raised its forecast for the harvest in the season that ends Sept. 30 to 900,000 MT, the highest since a record crop of 1.025 million MT in 2011.


Ghana To Raise Cocoa Price To Stop SmugglingGhana plans to raise its fixed cocoa price next season to a level which ensures smuggling into neighbouring grower Ivory Coast is not attractive. Ghana’s falling cedi currency has fuelled smuggling of cocoa into Ivory Coast since October, reversing a trend. When prices were set for the 2013/14 season which started on October 1, Ghana’s price of 3,392 cedis per tonne was roughly on par with Ivory Coast’s minimum guaranteed farmer price of 750 CFA F/kg [US$1.59]. However, the cedi has fallen by more than 20% against the dollar this year, creating a gap between the two prices. Top grower Ivory Coast plans to raise the fixed farmer price above 800 CFA francs per kg for the season starting on Oct. 1.

Ghana plans to review guidelines for the internal marketing of cocoa in the coming months. In 2012 Cocobod investigated a shortfall of around 70,000 MT of beans between official cocoa purchases and its inventory after buyers reported inflated volumes. At the time, local buyers were overstating cocoa purchases in order to gain advance funding. Ghana also plans to expand the volume of beans processed locally to up to 40%, from around 25-30%. Some plants already have expansion plans.

[Reuters 11/06/14]

NigeriaCocoa Crop Faces Blackpod Disease After RainfallFarmers in Cross River state, Nigeria’s 2nd-largest cocoa-growing area, are fighting blackpod disease as rainfall increases in the southeast. Farmers in Cross River, which produces about 30% of the nation’s cocoa output, are worried that more rains will make the disease spread faster. The harvest of mid-crop beans began in April, when bean weights were 270 grams [0.6 pound]. That has declined to about 250 grams due to the rains. Farmgate prices for cocoa beans in Cross River fell to 445,000 naira [$2,720] a ton from 450,000 as crop quality dropped. Nigeria’s cocoa production is estimated at 300,000 MT this year from 295,000 in 2013 up from 250,000 tons last year. Nigeria’s cocoa year is divided into two harvests. The main-crop season begins in October and ends in January, while the light-crop season, the smaller of the two, usually begins in April and ends in June.


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COMMODITY NEWSCOCOA

Cocoa Association Says Fixed Price UnlikelyAccording to the president of the Nigerian cocoa association the nation is unlikely introduce a fixed farmgate price for cocoa to mirror its neighbours’ approach to the sector as its farmers receive a higher price and lack trust in the public sector. Ivory Coast and Ghana both have fixed cocoa prices which are currently below world prices. Mostly the Nigerian price at the farmgate is higher than the international market price because of competition within the market.

[Business Day 12/06/14]

Cocoa Processors Seek Export Subsidy To Boost CapacityCocoa processors in Nigeria want the government to financially support the industry that they say is no longer competitive on the world market. Processors are working with the government to obtain a regular cash payment under an export grant. The Cocoa Processors Association of Nigeria also want the government to help boost consumption of locally grown beans. There are 8-companies in the country that have capacity to process 200,000 MT of cocoa a year, down from 16 companies in 2007.


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

Date ICCO daily price(SDRs/tonne)

ICCO daily price(US$/tonne)

London futures (£ sterling/tonne)

New York futures (US$/tonne)

2 Jun 14 2043.27 3147.17 1930.67 3065.00

3 Jun 14 2048.81 3154.17 1933.67 3074.67

4 Jun 14 2058.37 3169.54 1946.33 3085.00

5 Jun 14 2062.20 3175.39 1943.00 3092.67

6 Jun 14 2049.43 3159.01 1939.33 3066.33

9 Jun 14 2057.06 3169.95 1943.00 3081.00

10 Jun 14 2063.60 3172.66 1947.33 3087.33

11 Jun 14 2082.27 3201.05 1961.33 3113.33

12 Jun 14 2054.59 3158.46 1936.67 3058.67

13 Jun 14 2080.24 3202.58 1945.33 3112.00

16 Jun 14 2067.51 3183.92 1924.67 3104.67

17 Jun 14 2067.60 3186.16 1928.67 3107.00

18 Jun 14 2072.97 3193.07 1935.00 3113.00

19 Jun 14 2065.66 3189.48 1920.67 3113.33

20 Jun 14 2064.94 3185.63 1922.67 3106.67

23 Jun 14 2050.79 3163.29 1911.67 3081.33

24 Jun 14 2028.68 3131.51 1898.00 3048.00

25 Jun 14 2043.47 3152.14 1906.33 3072.67

26 Jun 14 2032.45 3137.77 1896.00 3055.00

27 Jun 14 2081.87 3214.66 1940.67 3133.00

30 Jun 14 2078.59 3213.27 1932.00 3128.33

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BurundiBurundi Coffee Growers To Open Own Bank Burundi coffee growers plan to open their own bank to give out the loans they need to invest in improving production - the first time Burundi coffee growers have joined together to open a micro-bank.

The coffee industry employs some 800,000 smallholder farmers, almost 10% of the population, growing Arabica beans. Caféiculteurs du Burundi [CNAC], which has 130,000 members, has already collected 600 million francs [US$389,000], double what the central bank requires to create a micro-financial bank. The next step is registration with the bank to open in the next few months. CNAC plans for the bank to have capital of 8 billion francs in the next 3-years, rising to 18 billion by 2020.

Production of green coffee fell to 9,890 tonnes in the 2013/14 crop year from 24,000 tonnes in the previous 12 months, meaning revenue from the nation’s top hard-currency earner slumped to US$23.8 million from US$66.3 million. Industry regulator ARFIC projects coffee production for the current crop year to reach 21,000 tonnes due to good rains. ARFIC says the cyclical nature of the crop and land degradation were behind last year’s poor harvest, but coffee growers argue a lack of fertilisers and the volatility of commodity prices are the main causes. Some coffee growers complain coffee is no longer profitable and have decided to switch to other crops such as bananas and fruit.

[The Africa Report 10/06/14]

Burundi Coffee Production Falls 52%Burundi’s coffee output fell 52% last season as farmers contended with unpredictable weather conditions and a lower-yielding crop cycle. Production dropped to 11,000 MT in the harvest season to February from 23,000 tons a year earlier.

Due to the impact of the war, demographic pressure and the lack of fertilizers in the past years and the climate change now, coffee continues to decrease in Burundi even though efforts to face the challenges are being gathered. For those reasons, the country won’t meet its target of producing 22,000 tons of coffee in 2014-15. However the African Development Bank and World Bank are supporting the government’s bid to sell all state-owned washing stations, deregulate the sector and seek other types of private investment for better management of the industry. Coffee production has fallen from a peak of more than 40,000 tons in the mid-1990s, just before a 12-year civil war.


13

COMMODITY NEWSCOFFEE

CameroonCoffee Production Drops To All Time LowThe 2014 coffee harvest has hit an all-time low of more than 50% slump from the previous year. Stakeholders are blaming faulty government policies dating back to the early 1990s and calling for renewed subventions to farmers. The Interprofessional Cocoa and Coffee Council says yields from the 2012-2013 season stood at just over 16,000 tons, down from above 38,000 previously. That’s the lowest figure since Cameroon started growing coffee in 1957. Back then, the country ranked 12th worldwide. Today, it sits at 31st position. Access roads are not maintained, soils are old and farmers are ageing with their children leasing out farms to banana producers. Experts offer several other factors that contributed to the failures: longer rainy seasons provoked by climate change causing massive falling of leaves before pollination; costly inputs like fertilizers and pesticides; lack of mechanization; the absence of large-scale farming as well as alleged sidelining of coffee in the allocation of government technical support and grants.

The Interprofessional Cocoa and Coffee Council believes the problems blighting the sector have been sufficiently diagnosed, but there is a need for fresh political will at the level of the government to re-launch coffee production. The government appears to be responding positively. They are talking with Brazilian experts who could teach Cameroonian farmers their best practices. The International Coffee Organization may offer training programs and transfer technology. In the meantime, the council has announced it is disbursing about US$1.5 million in an emergency relief plan to halt the plummeting harvests over the coming 5-years with assorted assistance and support programs. Farmers are also saluting a decision by the European Union to grant the country a non-reimbursable US$30 million for the revival of robusta coffee production. They propose to resurrect abandoned plantations and restore cooperatives.

[VOA 04/06/14]

Robusta Coffee Exports At 8,087 T. By May 2014Robusta coffee exports from Cameroon stood at 8,087 MT by the end of May 2014, compared with 8,406 MT in same month of the previous season. The country shipped 2,700 MT of robusta coffee in May, up slightly from 2,622 in April this year and 2,290 MT for the same month the previous season. Cameroon is one of just a few African countries growing both arabica and robusta coffee. The robusta season runs from Dec. 1 to Nov. 30 and Arabica from Oct. 1 to Sept. 30. 470 MT of arabica coffee was exported in May, an increase from 232 MT the previous month and 252 MT in the same month the previous season. Total arabica exports since the start of the ongoing 2013/14 season stood at 883 MT, down from 1,199 MT the same period in the 2012/13 season.

[Reuters 19/06/14]

14

Cote d’IvoireCoffee Output To Fall Short Of Forward SalesIvory Coast’s robusta coffee output this season is expected to fall short of volumes sold forward by the country’s marketing board, according to exporters who worry they may face costly defaults on contracts with clients. Under reforms introduced last season, Ivory Coast abandoned more than a decade of sector liberalisation. The Coffee and Cocoa Council [CCC] now sells forward export clearances for the bulk of the anticipated crop in order to fix a guaranteed price for farmers for the season, which began in December. However, with most of the harvest now delivered to the country’s ports of Abidjan and San Pedro, some exporters have been unable to meet their purchasing quotas.

Ivory Coast, the world’s top cocoa grower, is seeking to reach annual coffee production of 300,000 tonnes, up from around 100,000 tonnes in recent years. Some exporters accused the CCC, which has not made public how much coffee was sold forward this season, of being overly optimistic regarding this year’s harvest and said it had auctioned export clearances for more coffee than was produced.

Others said smuggling - mainly to neighbouring Guinea - was responsible for the shortfall. The Ivorian farmer price for the 2013/14 season was set at 620 CFA francs [$1.29] per kg. However buyers in Guinea are paying significantly above that level paying 750 to 800 CFA francs.

Exporters said they had been in touch with the CCC in an attempt to negotiate a compromise. Among proposals under discussion, is the possibility of allowing exporters to roll over their export clearances to next season without the usual penalties. However, some complained that such a deal would do nothing to alleviate the costs incurred due to defaults on contracts with customers this season.


Nestle Sees New Plants Boosting Ivory Coast Coffee OutputNestle SA is distributing disease-resistant plants to farmers in Ivory Coast to help the country increase production of the robusta variety by 40% in 6-years. Ivory Coast produces about 100,000 MT a year of robusta and Nestle’s initiative would boost that to 140,000 MT. The disease-resistant plants Nestle is introducing can grow beans in 2-3 years with a yield of at least 1 t/ha. That compares with 5-7years on the plants normally used there, which have a yield of 0.3 t/ha. Nestle will distribute more than 2 million plants to farmers this year.

Robusta prices rose 17% on NYSE Liffe in London this year. Prices for arabica advanced 53% on ICE Futures U.S. in New York on speculation drought would damage plants in top-grower Brazil. Coffee merchant Volcafe Ltd. estimated a global supply shortfall of 11.3 million bags, with a crop of 140.2 million bags in 2014-15. Ivory Coast is the 6th-biggest grower of robusta and is expected to produce 1.9 million bags in 2013-14.


15


EthiopiaEthiopia’s Coffee Export DeclineEthiopia’s coffee exports have declined. In a Trade Ministry report Addis Ababa had exported 136,000 tons of coffee worth US$489.28 in the last 10-months, compared to US$576.819 in the same period last year. Coffee exports declined by 8.79% and revenues by 15.8% compared to 2013. The ministry cited power disruption, delay in business deals and market price fluctuation for the decrease in coffee exports. Ethiopian coffee exports account for around 3% of the global coffee market. The biggest market for Ethiopian coffee is Germany, which imported US$95.75 during the last 10-months followed by Saudi Arabia, United States, Belgium, Sudan and Britain.

[World Bulletin 06/05/14]

EU Recommends Establishment of Arabica Coffee Researcher Institute in EthiopiaDuring a workshop organized by European Union [EU] and Coffee Development Sector, the EU recommended Ethiopia host a research institute of Arabica Coffee due to recent poor performance of its coffee sector. An institute would helps farmers and exports maintain quality and production. Other factors were inconvenient transportation, poor data collection on market assessment, and frequent amendments on regulations and poor cultivation and storage.

[2Merkarto 02/06/14]

KenyaKenyan Coffee Farmers Attempt To Access International MarketCoffee farmers in central Kenya’s Kirinyaga County have started roasting and packaging their coffee in a move that will enable them to access the international market and earn better prices. It is expected to trigger similar value addition process by thousands of other farmers in coffee growing areas across Kenya, as the country progressively moves to process its agro-produce. According to the International Coffee Organization, certification and verification schemes can be powerful tools for value addition, access to a fast-growing market segment and the dissemination of good agricultural, environmental and social practices.

[Xinhua 23/06/14]

17th June 10th June 3rd June

AA COF-AA-KE $177-340 $152-312 $121-328

AB COF-AB-KE $106-268 $102-258 $107-263

Bags Offered 17,413 13,312 23,164

Average price per bag $202.54 $250.13 $181.87

GRADE 17th June [$] Average Price [$] 10th June [$] Average Price [$] 3rd June [$] Average Price [$]

AA 177-340 309.24 152-312 281.33 121-328 287.91

AB 106-268 246.88 102-258 242.96 107-263 239.08

C 94-243 208.75 140-236 210.79 77-236 206.53

PB 120-269 244.75 129-265 239.32 90-258 221.26

T 52-190 112.59 - - 65-179 134.64

TT 111-223 191.16 160-174 168.35 69-211 170.13

16

RwandaCoffee Export Earnings Drop to Rwf3.4 Billion in First QuarterRwanda’s coffee export earnings plummeted to US$5.05m [Rwf3.4b] during Q1 2014, down from US$11.6m [Rwf7.8b] in the same period last year, statistics from the National Agricultural Export Board [NAEB] indicate. This was a 56.5% year-on-year decrease. Export volumes also dropped to 2,201 tonnes during the quarter compared to 3,698.6 tonnes recorded over a similar period last year. NAEB, attributed the drop in value to a decline in international coffee prices adding that January-March is usually off season for the crop, meaning that the country was exporting old stocks over the period. The average price per kilogramme of coffee stood at US$4.8 [Rwf3,218] during Q1 2013 but dropped to US$4 [Rwf2,681] over Q1 2014. The crop performed poorly last year because of prolonged drought. International prices stood at an average US$3.67/kg [Rwf2,494] for fully-washed coffee last year, down from US$6 [Rwf4,044] during the 2012 season.

Although NAEB expects better revenues of about US$70.4m [Rwf47.2b] this year, it is hard to predict when international coffee prices will improve. Rwanda exported 19,969 tonnes of coffee worth US$55.2m [Rwf37.2b] last year, a big decline from US$69.5m [Rwf46.8b] revenue earned in 2012. NAEB is working with farmers, providing them fertilisers and extension services to boost output. NAEB is also sensitising farmers and dealers to ensure proper post-harvest handling of the crop, which will improve coffee quality. NAEB increased the indicative coffee farm-gate price to Rwf200 from Rwf142/kg at the beginning of the country’s coffee season in March. The increase followed a price surge on the international market in January. In January, the monthly average of the International Coffee Organisation composite indicator price was above US$3.9/kg of robusta coffee, the highest rate in 4-months. Coffee prices on the global market had plummeted to as low as US$2.66 in August last year, as Brazil and other major producers flooded the market, but predictions for the 2014/15 coffee year are also bleak. Rwanda’s largest coffee export markets are in Europe, the US and Asia.

[New Times 05/06/14]

17


UgandaNew Board Inaugurated / Coffee Regulations For Review

Agriculture minister Tress Bucyanayandi has directed the newly inaugurated board of the Uganda Coffee Development Authority [UCDA] to work on reviewing the coffee regulation and to support coffee research at the Kituza Research station. Issues affecting the sector are wilt disease and other pests and diseases, few clean planting materials, increased demand for better quality coffee in international specialty market, high percentage of old coffee trees, soil fertility, value addition to finished products. The 11-member new board whose term runs until 2017 is led by Perez Bukumnhe who took over from Eng. Fabian Tibeita. Other members are, Henry Ngabirano, UCDA Managing Director, Valentine Okot Otamu and Gerald Sendaula as farmers’ representatives, Rose Kato and Ayub Kalule representing processors as well as Hannington Karuhanga, and Robert Nsibirwa representing exporters. The others are Beatrice Byarugaba from the Agriculture Ministry, Dr. Albert Musisi from the Finance Ministry and Silver Ojakol from that of Trade.

[New Vision 18/06/14]

May Coffee Exports 286,668 Bags, Down 15% Uganda exported 286,668 bags of coffee in May, down 15% from the 393,783 bags exported in May of last year, according to coffee regulator UCDA. It is at the tail-end of harvest in the south and south western region so yields are also declining and heavy rains in some parts of the region also disrupted transportation of stocks from rural areas. The exports were worth US$35.9 million, down from US$48.2 million earned from sale of beans in May 2013.


Coffee Crop Benefiting From Rain Before HarvestingCoffee trees in Uganda, Africa’s largest producer of the robusta variety, are benefiting from more rainfall before the harvest starts in October. The rain will benefit flowering for the main harvest which runs from October to February. Uganda will produce 3.5 million bags of coffee in 2013-14 which started in October, the most since 1999-2000, according to the U.S. Department of Agriculture. Robusta output will be 2.8 million tons and the rest arabica. Arabica futures traded in New York climbed 52% this year and robusta prices rose 11% in London.


Uganda Coffee Export SurgesUganda Coffee Development Authority [UCDA] has recorded a steady rise in both the volume and value of coffee exports this year. This has been directly linked with the prolonged drought in Brazil. The rise in coffee prices and the supply gap caused by the shortage of rainfall has reportedly forced buyers to turn to other markets; like Africa. Since the beginning of this year, many coffee-growing countries in the continent have reported an increase in the demand. According to the UCDA coffee exports for the period between [May 2013 – April 2014] totaled 3.85 million bags worth US$426 million [Shs 1,086 billion] compared to 3.13 million bags worth US$404 million [Shs1,025 billion] in the same period last year [May 2012 – April 2013].

[Zegabi 10/06/14]

18

BeninCotton Production GrowthBeninese cotton production expects an upturn for the 2013-2014 campaign. Harvest is forecast at 350,000 T of cotton-seed against less than 230,000 T last season. The increase in production is related to the takeover of the sector by the Government under the national society for agricultural promotion [Sonapra] as well as timely distribution of agricultural inputs [seeds, fertilizers, pesticides]. Benin also launched the construction of an agricultural machinery assembly plant in Ouidah, 40 km west of Cotonou supported by a US$15 million credit line from India. A similar plant will also be built in Banikoara. However the country remains below its initial forecast of 500,000 T.

[Ecofin 11/06/14]

KenyaKenya To Commercialize Genetically Modified CottonKenya will soon grow genetically modified [GM] cotton to help enhance farmer’s income. So far the country has completed a confined field trial of cotton and is in the process of carrying out the same for cassava, maize and sorghum under the direction of the Kenya Agricultural Research Institute [KARI].

Twenty companies are willing to relocate their garment making businesses to Kenya but are delayed by an import ban imposed 2-years ago on genetically modified materials - a major obstacle to commercialization of the insect resistant GM cotton in the country. South Africa, Mali, Burkina Faso and Brazil are already making profits from it as is Sudan that also started growing GM cotton last year. A task force was formed to look into GM crops. Its report is finalized and is due to be presented to the Minister for Agriculture this month. Kenya has developed a level 2 laboratory that is capable of handling the development of transgenic crops.

Kenya is also losing out on the African Growth and Opportunity Act [AGOA] market due to reluctance in adopting the technology. As farmers abandoned cotton in the late 1980s, the country is currently producing only 30,000 bales of cotton as opposed to the expected 200,000 bales.

[Xinhua 30/05/14]

Kenya Textile, Leather Sectors Get Sh3 Billion BoostFarmers and traders in the cotton and leather industries could see improved fortunes in future if a plan mooted by the Government succeeds.

The two suffered a beating when the industry was liberalised allowing the market to flood with cheap imports. Now, the Government plans to rejuvenate the sectors. Government is spearheading a raft of new measures aimed at improving production and attracting new investments. It will commit Sh3 billion for the development of textile and leather sectors and take advantage of the global market through African Growth Opportunity Act [AGOA] to aggressively grow the sector.

Key on the list of measures being pursued includes enhancing value addition. Both sectors have been hit by the influx of second hand clothes and shoes. The strategies are contained in the comprehensive Industrialisation Master Plan, launched last year. The export value of articles of apparel increased by 7.5% to Sh23.9 billion in 2013 compared to Sh22.3 billion in 2012. The Cotton sector is currently producing about 10,000 MT though far below its potential of 40,000 MT.

The cotton industry collapsed between late 1980s and 90s after the liberalisation of the sector following introduction of the Structural Adjustment Programmes [SAPs] by the Bretton wood institutions – World Bank and International Monetary Fund [IMF]. This led to the collapse of most operational ginneries. There are only 8-operational ginneries out of an establishment of 22 factories. They include Makueni, Kitui, Voi, Meru, Malindi, Mpeketoni, Salawa and Nyanza ginnery.

The industrialization master plan further highlights plans to reinvigorate the local leather industry. The national government in conjunction with county governments will work together to implement growth measures. Annually, the industry generates about Sh6 billion.

[Standard Media 14/06/14]

19

COMMODITY NEWSCOTTON / TEXTILES & LEATHER GOODS

TanzaniaCotton Stakeholders Set PricesA cross section of key cotton stakeholders, including buyers and outgrowers have met in Dodoma this month and set indicative price of cotton for this year’s season. The seasonal indicative price is put in place as a mechanism to prevent farmers from incurring losses. This is a result of unscrupulous businessmen who buy cotton at lower prices compared to prices at the international market.

An indicative price also means farmers are not allowed to sell cotton below the Tsh750 [US$0.446]/Kg threshold, while buyers are not permitted to purchase below the set price. Cotton buyers are required to purchase above the indicative price. Any person who buys below the set price would be in contempt of rules and regulations governing the cotton industry - the Cotton Industry Act [No. 2 of 2001]. Stakeholders include cotton buyers through Tanzania Cotton Association [TCA], Tanzania cotton growers association [TACOGA], Ministry of Agriculture, Food Security and Cooperatives and Tanzania Cotton Board.

Cotton is a commercial crop that is grown in 15 regions spread across two zones which are Western which includes Mwanza, Shinyanga, Simiyu, Geita, Tabora, Mara, Kigoma, Singida and Kagera, while the Eastern zone has Morogoro, Iringa, Coast, Tanga, Kilimanjaro and Manyara. Cotton planting season in the western zone begins in the middle of November while the Eastern zone starts from the beginning of February. Cotton production for this season is estimated at 250,000 tones.

[Business Week 21/06/14]

ZimbabweChina-Africa Fund To Acquire Stake In CottcoThe China-Africa Development Fund, China’s largest private equity fund focusing on African investments, has moved to buy a significant shareholding in Cottco Holdings Ltd* through its wholly-owned subsidiary China-Africa Cotton. On June 5, Cottco advised shareholders that it was in negotiations which, if successfully concluded, “will have a significant impact on its operations and share price”.

[Ecofin 18/06/14] *Following the unbundling in February this year, Cottco replaced AICO Africa Holdings listing on the Zimbabwe Stocks Exchange. Before the unbundling, AICO owned 100% in Cottco, 49% in Olivine Industries, a fast moving consumers goods company and 51% in Seed Co, a ZSE- listed firm. The National Social Security Authority is the major shareholder in Cottco with 22.2%, Stanbic Nominees owns 20.2%, while Old Mutual has 13.7%. Cottco is the largest cotton company in Zimbabwe, supporting more than 200 000 small-scale farmers.

20

Cote d’Ivoire108 Billion CFA Francs To Boost Ivorian Fisheries Production By 2020Since 2000, the fisheries sector in Côte d’Ivoire has recorded a steady decline in domestic production, which now covers only 33% of annual consumption. This deficit is filled every year by imports of frozen fish. In 2010, more than 368,000 tonnes of frozen fish and shellfish costing 169 billion CFA was imported. To rectify this imbalance Government intends to mobilize 108.5 billion CFA by 2020 with the assistance of the private sector and development partners. 28.6 billion will be devoted to the fishing port of Abidjan.

[Ecofin 17/06/14]

MoroccoMorocco, Russia Agree To Promote Joint Ventures In FisheriesMoroccan Minister of Agriculture and Marine Fisheries, Aziz Akhannouch and his Russian counterpart, Nikolai Fyodorov, agreed joint ventures [JV] in the processing of seafood and aquaculture, to better harness the potential of Moroccan exports to Russia.

[Morocco World News 10/06/14]

21

COMMODITY NEWSFISH

East AfricaEast African Countries Hike Rice Import Duty To 35%The East African Community [EAC] comprising Tanzania, Burundi, Rwanda, Uganda and Kenya has increased import duty on rice in a move to discourage cheap imports of the product from Asia and protect local farmers. The duty was increased from 25 to 35%. All Finance Ministers of the EAC were said to have signed the new proposal, except the Ugandan Minister, which is proposing a 75% increase to its import duty.

[Ventures 04/06/14]

GhanaFinatrade, Distell Group To Set Up Bottling Plant In TemaA new bottling plant has been inaugurated for the production of internationally recognised cider brands of Hunters and Savanna, as well as Knights Whisky range of alcoholic beverages at Tema. The GH¢16 million facility is a partnership between the Distell Group, a South African-based global player in the alcoholic beverage market with an annual turnover of GH¢5 billion, and Finatrade, a leading West African agri-commodities and branded foods company which has well-established distribution strengths in Ghana and on surrounding markets.

[Ghanaweb 15/06/14]

ABL To Double Capacity By Year End The Ghanaian brewer Accra Brewery Limited [ABL] plans to double its capacity by the end of the year. The subsidiary of the South African giant SABMiller, which had announced last November an expansion plan estimated at US$100 million intends to develop infrastructure including 2 packing units and a new warehouse. ABL is to increase its consumption of locally produced raw materials, including sorghum, maize, cassava and rice.

[Ecofin 15/06/14]

MoroccoMorocco To Export Citrus In Sub-Saharan AfricaMembers of the Moroccan Citrus Association / l’Association des conditionneurs d’agrumes du Maroc [ASCAM] aim to develop export markets in sub-Saharan Africa. In 2012, the region only accounted for 3% of the Kingdoms citrus exports a position it wishes to expand. Morocco annually produces 1.3 million tons of citrus fruit with 530,000 tons exported. In 2013, the Kingdom exported 16,082 tonnes to sub-Saharan Africa. The industry sees Mauritania, Ivory Coast, Senegal, Mali and Burkina Faso as key opportunities.

[Ecofin 16/06/14]

22

COMMODITY NEWSFOODSTUFFS

NamibiaBeef Exports DecreaseBeef exports to the European Union [EU] markets during Q1 2014 decreased by 48%, according to statistics by the Meat Board of Namibia. A total of 1,621 tonnes of chilled and frozen deboned cuts were exported to the EU markets, compared to 2,164 tonnes exported during the same period in 2013.

Namibia’s only EU approved export abattoirs, Meatco [Windhoek and Okahandja plants] and Witvlei Meat reported a total slaughter figure of 16,682 livestock units by the end of Q1 2014. This figure indicated a decrease of 35,86% from 26, 008 livestock units as reported in the same period last year.

The export of cattle to South Africa also decreased by 58% in Q1 2014, compared to the same period last year. A total of 23, 741 livestock units were marketed during Q1 2014, compared to 57,030 livestock units during the same period in 2013. On the total marketing of cattle by the end of Q1 2014, the Meat Board said figures stood at a level of 46,476 livestock units.

[Namibia 30/05/14]

NigeriaNigeria to Become a Major Player In Global Food Markets Nigeria is on the edge of becoming a major food player in global food and agricultural markets. The size of Africa’s agriculture and agribusiness is expected to grow to US$1-trillion by 2030, with foreign direct investment in agriculture which stood at US$10 billion in 2005 hitting US$45 billion by 2020. The country’s rice self-sufficiency policy was directed at saving US$2.3 billion every year. With the distribution of high yielding varieties leading to an increased output of 4 to 5 t/ha compared to 1.5 to 2.5 t/ha previously.

[This Day 10/06/14]

SenegalSenegal Clears Slate For Rice And Tomato GrowersSenegal has decided to pay off a 11.5 billion CFAF debt of rice and tomato farmers and producers in order to boost the 2-sectors. The Government is to also redevelop infrastructure and equipment including distributing 375 pumps and 50 combine harvesters estimated at 32 billion CFAF. Rice farmers could meet new challenges if the ECOWAS common external tariff eventually comes into force on 1 January.

[Ecofin 14/06/14]

23

COMMODITY NEWSFOODSTUFFS

South AfricaStrong Outlook For Global Citrus Brand ClemengoldThe future is looking positive for South Africa-based global citrus brand ClemenGold, as it enjoys a higher demand than supply for its Nadorcotts and continues to open up new markets throughout the world. Germany and Austria are currently two of the biggest markets for the brand, where it has been operating over 4-years.

This year will be the company’s first year in Ireland and Norway and their second year in China. In South Africa, ClemenGold-branded fruit is grown in four regions – Limpopo, Mpumalanga, the Eastern Cape and the Western Cape – though the U.S. only allows imports from the latter.

[Fresh Fruit Portal 18/06/14]

SudanSudan Ready To Resume Meat Exports To Saudi ArabiaThe Sudanese Ministry of Animal Resources has expressed readiness to resume exports of meat to Saudi Arabia announcing that veterinary quarantines are ready for export operations of sheep and live cattle. It predicts an increase in chilled meat exports to Saudi Arabia in the coming days.

Last month, the Saudi Food and Drug Authority [SFDA] lifted a temporary ban on imports of beef, lamb, goat and chilled meat products from Sudan. The decision was based on the reports of the World Organization for Animal Health [OIE] which stated that Sudan is free of the Rift Valley fever and rinderpest Sudan has exported 1,500 tons of meat to Egypt, Jordan, Qatar, and Kuwait and more than 2 million heads of cattle mainly to Saudi Arabia.

[Tribune 24/05/14]

ZambiaZambeef Negative First HalfZambeef Products swung to a H1 pretax loss of US$6.5m, from a profit of US$6.4m previously. Revenue was down 9% to US$140.2m from US $153.4m. However good performances were seen from the cropping, milk/dairy and West Africa divisions. The 2-joint ventures [JV] with Rainbow [Zam Chick and Zamhatch] are progressing smoothly with full benefits expected over the next 12 months, when Zamhatch becomes operational. Export sales grew 27.8% to US$20.2 million in H1 representing 15.6% of revenues.

[Stock Market Wire 16/06/14]

ZimbabweZimbabwe To Resume EU Beef ExportsZimbabwe will soon resume beef exports to the lucrative European Union [EU] market, with negotiations already underway. The Cabinet is discussing a national strategy on livestock production in preparation for the exports. Beef here is classed GMO-free. Zimbabwe last sold its beef to Europe in 2001 before the exports were suspended because of an outbreak of foot and mouth disease. Meanwhile the country is to re-establish green, red and white zone. The livestock sector could also create downstream industries that use by-products from livestock such as hides.

[AllAfrica 16/06/14]

24

Cote d’IvoireDekeloil Signs Third Crude Palm Oil Off-Take AgreementDekelOil Public Ltd has signed its third off-take agreement to supply crude palm oil produced from its 60 t/hr extraction mill in Ivory Coast. The crude palm oil producer said the agreement, with San Cie, a local refining company, is in line with its strategy to diversify its customer base. DekelOil will supply Sania with crude palm oil in return for an Inter-professional Association of Oil-Palm Industry price for its product. The agreement covers an initial period to December 31 at which point it should be renewed.

[Alliance News 02/06/14]

LiberiaSime Darby Plans Up To 100,000 Hectares Of Oil Palm Sime Darby Bhd is planning to plant up to 100,000 ha of oil palm in Liberia within the next 10 year under its 63-year concession with the government to develop 220,000 ha of land. Sime Darby has so far planted 10,035 ha with oil palm involving a total investment of RM100-200 million, inclusive of upfront infrastructure since signing the agreement in 2009. The first planting began in 2010. The plan is to develop 10,000 ha of oil palm annually to ensure the sustainability of the company’s palm oil business. The remaining 110,000 ha will be utilised as rubber plantations with 107 ha having already been developed with the commodity. Besides Liberia, Sime Darby are eyeing the Ivory Coast as its next potential investment for oil palm plantations.

[Bernama 09/06/14]

NigeriaOkomu Oil Palm ExpansionOkomu Oil Palm Company Plc plans to invest about N8 billion over 4-years for business expansion as shareholders voted close to N1 billion in dividend for the 2013 financial year. The company is to plant 10,000 ha of oil palm within the next 3-years and thereafter, a new 60 t/hr oil mill would be erected to process the FFB produced, under the proposed investment plan. Okomu has begun the expansion of its current oil mill from 30t/hr to 60t/ hr at a cost of about N2.5 billion, effectively make Okomu oil one of the largest mills in Africa, and certainly one of the newest technology, featuring tilting sterilizers, scheduled for completion in 2014. However, consolidated results for 2013 showed that turnover at N8.86 billion slipped 13% from N10.1 billion in 2012 attributed to a tough operating environment, especially seen in lower than average commodity prices and/or volumes. Consolidated profit before tax was down 19% to N2.69 billion. Net profit on continuing operations also dropped 42% to N2.09 billion.

[Business Day 17/06/14]

25

COMMODITY NEWSPALM OIL

CARCAR Sugar Factory Reopens Amid StrifeA sugar refinery - the Republic’s biggest factory - is back in business after soldiers recaptured it from former rebels who occupied it for more than a year. In a rare boost to the impoverished nation’s battered economy, the plant’s 150 employees are back on the job in Ngakobo - with African peacekeepers providing security. They had fled to the capital Bangui amid sectarian violence sparked by a March 2013 coup. Operator Sucaf normally produces 11,000 tons of sugar a year.

KenyaEast Africa: EAC Ministers Impose 100% Duty On Imported SugarAs local sugar industries struggle to compete with cheap imported sugar with others suspending investments for expansion, Finance Minister Saada Mkuya Salum said a 100% import duty will be imposed. Sugar is a sensitive commodity which is also produced locally although short of meeting domestic consumption. Local sugar factories produce less than 350,000 MT of sugar per annum against consumption of over 480,000MT, necessitating importation to offset the difference.

The country’s 4-major producers namely Tanganyika Plantation Company [TPC] in Moshi, Kilombero Sugar Company and Mtibwa Sugar Estates in Morogoro and Kagera Sugar based in Kagera Region have been complaining that their expansion plans have been frustrated by imports. TPC has stopped expansion plans and KSC is likely to follow unless the government takes measures to contain cheap imports mostly from Asia and Brazil. Rampant sugar smuggling has also frustrated a huge project likely to reduce the over 120,000MT deficit by a half.

Meanwhile Agro EcoEnergy Tanzania Limited plans to invest over US$500 million [800bn/-] in sugar, power and ethanol production. The project is under the Southern Agricultural Growth Corridor of Tanzania [SAGCOT] and is expected to take off soon. Currently, a kilogramme of sugar has peaked to 2,000/-, which has forced the government to demand explanation from traders. While the traders buy a kilogramme of sugar at 1,440/- wholesale prices delivered on door steps, they are selling it at between 1,900/- and 2,000/- a kilo.

[Daily News 05/06/14]

South AfricaSugar Workers Agree Wage Offer to End 11-Day StrikeAbout 5,500 sugar workers agreed to wage increases of as much as 10%, ending the first industrywide stoppage for 17-years. Employers will raise salaries for the lowest-earning employees by 10% while middle and higher band earners will receive increases of 9% and 8.75% respectively. The strike began on May 27 with employees requesting an 11% increase, while companies including Illovo Sugar Ltd. and Tongaat Hulett Ltd., Africa’s 2-biggest producers offering 8.5%. The final wage agreement was brokered by the government-sponsored Commission for Conciliation, Mediation and Arbitration.


26

COMMODITY NEWSSUGAR

SwazilandSugar Exports To EU To Increase By 3%

Swaziland’s sugar exports, mainly to the European Union [EU] could increase by about 3% to 385,000 MT [MT]. In 2013/14 sugar production increased by 3% from the previous year to an estimated 679,934 MT and Swaziland exported about 373,523 MT of sugar to the EU. For 2014/15 forecast the area under sugar cane cultivation will increase by 3% to 61,000 ha to produce a cane crop of 6-million MT.

Swaziland’s area under sugar cane has increased by almost 12% the past 5-years, as more small scale farmers take up cultivation and access to irrigation increases through significant investments by the Swaziland government, the EU and donor organisations. As a result, sugar cane production has increased by 15% to reach its highest level of 5.6 MMT in 2012/13. For 2013/14 Swaziland is expected to produce 5.6 MMT of sugar cane. 2014/15 forecasts see sugar cane cultivation increasing by 3% to 61,000 ha. By 2016/17 the sugar cane area will increase to 65,000 ha with sugar cane production more than 6.5 MMT.

Season Production Land

2013/14 5.6 MMT 58 979 ha

2014/15 5.6 MMT 61,000 ha

2016/17 6.5 MMT 65,000 ha

Swaziland is Africa’s 4th largest producer of sugar [after South Africa, Egypt and Sudan]. South Africa’s 3-biggest sugar companies, Illovo Sugar Ltd, Tongaat Hulett Sugar Ltd, and Tsb Sugar RSA Ltd are involved in the Swaziland sugar industry through their co-ownerships in production estates and mills. Swaziland has 3-sugar mills, namely, Mhlume, Simunye and Ubombo with a combined annual production capacity in excess of 800,000 tonne. Sugarcane growing in Swaziland is only permissible through a quota issued by the Sugar Industry Quota Board.

The Swaziland Sugar Association is responsible for all sales and marketing of sugar produced in Swaziland. The main export market for Swaziland’s sugar is the European Union [EU], under the Economic Partnership Agreements [EPA] that was introduced in 2009. EPA allows for preferential access to the EU market for Swaziland sugar. The United States also allows preferential access for Swaziland sugar under its Tariff Rate Quota. However, due to higher income realisation, Swaziland exported only to the EU in 2012/13 and 2013/14.

[Swazi Observer 09/06/14]

27

COMMODITY NEWSSUGAR

TanzaniaTanzania Restricts Sugar ImportsTanzania is expected to release a policy on sugar importation in July aimed at protecting national sugar companies as well as ensuring they have access to the domestic market. Tanzania has seen the need for having a policy that will give way to procuring sugar using the bulk procurement system. According to Sugar Board of Tanzania [TSB], the introduction of bulk procurement is expected to spur sugar companies’ development and also encourage investment. Tanzania consumes some 590,000 tonnes of sugar annually while the local industry production stands only at 291,000 tonnes a year.


Sugar Production To Rise Sugar production in Tanzania is set to double in the coming years, thanks to new initiatives by the private sector in collaboration with the Sugar Board of Tanzania [SBT]. The Ruipa and Mkulazi projects in Morogoro Region are being worked on as well as the Bagamoyo Agro Eco Energy [BEE] project a subsidiary of the Swedish-based Eco Energy Africa AB. The new factory is expected to start production in 2016/17.

Government agencies are also opening up new greenfield investments particularly in sugar industry by the Tanzania Investment Centre [TIC], part of the Big Results Now initiative and the sugar board. Furthermore indirect government investment through the SBT is offering support through European Union and CFC funded projects. Through these projects growers are supported in infrastructure, capacity building, research and training. Block farms have also been set up where growers receive assistance under EU and Common Fund for Commodities [CFC] projects.

Average annual sugar production is 300,000 tonnes. During the 2013/2014 season 308,000 tons of sugar will be produced However, there are at least 80,000 tonnes of sugar that are in reserve so Tanzania will have enough sugar from now to the next season of production. Therefore there will be no sugar importation to fill the deficit as it used to be in the previous years when there was a shortage. Generally, the supply of sugar for households and industries use in the country is 590,000 tonnes per year.

[IPP Media 13/06/14]

28

KenyaMombasa Tea Auction to Be AutomatedThe Kenyan government intends to automate the Mombasa tea auction to enhance transparency and eliminate brokers who fix prices. Tea farmers are being robbed of their earnings under the current state of the auction, which is run by the East African Tea Trade Association. The government wants to get rid of people who determine the tea prices at the auction bay at the expense of farmer.

The country is also looking at Russia, Poland and China to diversify Kenya’s tea export markets to avoid recent upsets from traditional destinations such as Egypt. Kenya’s tea exports in Q1were the highest compared to similar periods over the past 4-years. Tea exports from January to March reached 1.25 million tonnes compared to 1.19 million in Q1 2013 and 1.18 million tonnes in 2012. Exports in a corresponding period in 2011 had dropped to 1.07 million tonnes from 1.17 million tonnes in 2010. Despite the increase in tea exports this year, low prices in international markets threaten earnings from the commodity.

[The Star 23/06/14]

Tea Farmers To Get Mini Bonus By Month-EndTea farmers will be paid an interim bonus – commonly known as mini bonus – at the end of the month. The Kenya Tea Development Agency [KTDA] said the tea factories’ boards would agree on the rate per kilo. President Kenyatta impressed on the Ministry of Agriculture, KTDA and other players in the tea sector to cushion farmers from unnecessary taxes and levies to lower the cost of production and increase returns.

The President directed the National Treasury to review taxes such as Value Added Tax [VAT] and import duties that hinder growth of the tea industry and that implementation of the proposed electronic tea auction through public private partnership [PPP] should be fast-tracked. President Kenyatta also asked KTDA to boost capacity during glut.The meeting proposed the setting up of a price stabilisation fund through partnership between the Government and the tea industry.

Implementation of the Common User Facility [CUF] – estimated at Sh3.6 billion – should start to provide incentives for investors under the public private partnership model. Currently, the tea industry is experiencing low levels of value addition at less than 10% due to inadequate facilitation and access to technology.

On low excise duty charged on tea imports the KTDA note it should be raised from 25% to 100% as charged by other tea producing countries outside the common markets to inhibit excess importation of value added tea. KTDA also expressed concern over tea hawking, saying it contributed to quality reduction.

[Standard Digital 12/06/14]

Kenyan Tea Firms’ Profits SlideKenya’s Williamson Tea and Kapchorua Tea both posted a slide in annual profits with little prospect of a pick-up. Williamson’s pretax profit fell 10% to 1.04 billion shillings [US$11.9 million], while Kapchorua Tea’s dropped 29% to 182 million shillings. Both blamed weak markets and low tea prices while costs for inputs and labour continue to rise. Last month, tea and coffee producer Sasini issued a profit warning for its full year after first-half earnings slumped.

[Reuters 09/06/06]

29

COMMODITY NEWSTEA

Tea Industry Faces Probe Over Price SlumpThe Government is considering launching an investigation into the sharp price decline over the last year. The concern is prompted by a 30% fall since July 2013. Government wants to examine the entire tea value chain to find out the cause of the plummeting prices and come up with solutions to protect farmers. It was not indicated when the exercise would start but it would involve Governors from various tea growing counties, tea brokerage firms, tea factory directors and farmers.

The East Africa Tea Trade Association noted industry stakeholders are equally concerned though optimistic the situation will correct itself soon. With reasons ranging from increased supply due to good weather as well as economic and political instability in some of the key markets for Kenyan tea. This is not a unique phenomenon. In 2008, tea prices dropped drastically from Sh208.98 [$2.43] to Sh146.20 [$1.70]. Due to the current price decline 560,000 farmers affiliated to KTDA will not receive the initial [mini-bonus] payments and fears are that the final payment scheduled for late in the year will equally be affected by far.

[Standard Digital 08/06/06]

Auction 24th June 17th June 10th June 3rd June

Best Broken Pekoe Ones [BP1s] TEABP1-

BEST-KE

$2.22-$3.20 / kg $2.12-3.22 / kg $2.05-3.16 / kg $2.16-3.28 / kg

Best Brighter Pekoe Fanning Ones [PF1s] TEAPF1-BEST-KE

$2.30-$2.74 / kg $2.30-2.78 / kg $2.12-2.61 / kg $2.10-2.54 / kg

Not Sold 9.88% of 165,116 packages = or 10.5

million kg

16.31% of 170,461 packages = 10.88

million kg

23.01% of 165,603 packages = 10.55

million kg

12.08% of 166,628 packages = 10.68

million kg

UgandaUganda Falls Back As Kenya Tea Forges OnThe Ministry of Agriculture want to established a Tea Board similar to that in Kenya to promote tea production in the country and to increase tea production in the next 10 years. Tea production has stagnated since 1972 with the country producing between 30,000 to 50,000 MT of tea. Experts at the Economic Policy Research Centre [EPRC] say the disparity is due to lack of technology and failure by government to put in place a standalone tea policy or a regulatory authority. The government has been doing this for other crops like coffee and cotton. Experts say the country has the potential to increase tea production if it utilizes the 200,000 ha available for tea planting and to carryout active research on tea and improve funding among other concerns.


30

GeneralEU Tropical Wood Products Imports Static At Last Year’s LevelWhile economic indicators are beginning to improve in the EU and market confidence is rising, these trends are filtering only very slowly into the European tropical hardwood trade. Imports of tropical hardwood products in the first four months of 2014 were 1.385 million m3 in roundwood equivalent terms, down 1% compared to the same period last year. Although imports of tropical hardwood sawn and veneer have increased this year by 3% and 14% respectively, these gains have been offset by declining imports of tropical hardwood logs [-34%], mouldings and decking [-3%], plywood [-8%] and glulam/window scantlings [-6%].

In addition to slow consumption, the European market for tropical wood during Q1 2014 suffered from supply constraints, notably from Cameroon and Congo where shipments were significantly limited due to major issues with handling operations and administrative procedures at Douala Port. The situation has improved since the start of the year but the backlog of wood destined for Europe at the port is being shifted only slowly. Lead times between ordering and delivery into Europe of the main African commercial species such as sapele and framire has now fallen to 3 to 4 months compared to 6 months at the start of this year. Another reason for slow imports of tropical wood in 2014 is the change in GSP status of several key tropical suppliers, notably Malaysia and Gabon. This led to a rise in European import duties on timber products from these countries on 1 January 2014. An immediate effect was to encourage a short-term build-up of stocks before the deadline and subsequent fall in imports from these countries in Q1 2013.

[ITTO 15/06/14]

EU Imports Of Tropical Hardwood Logs Fall SharplyEU imports of tropical hardwood logs were 42,000 m3 in the first four months of 2014, 34% less than the same period of 2013. Imports fell particularly heavily from the Congo countries, Cameroon, and Central African Republic. This is due to the combined effects of shipping problems at Douala Port, the civil war in Central African Republic, and EUTR-related concerns over the reliability of legality documentation.

While total EU imports of tropical hardwood logs were down over the 4-month period, closer analysis of the monthly trend suggests a slight improvement in April compared to the first quarter of the year.

Malaysia And Côte d’Ivoire Fill Gap In Cameroon Sawn SupplyImproving demand in the UK and Netherlands boosted EU imports of sawn hardwood in the first four months of 2014. Imports were 320,000 m3 during this period, 4% more than the same period in 2013.

Rising imports from Malaysia, Ivory Coast and Gabon, helped to fill the gap caused by supply disruption in Cameroon. Monthly data reveals that after a sharp fall in January and February this year, the pace of EU imports of tropical sawn hardwood began to recover from March onwards. This was due to improved shipments from both Cameroon and Malaysia.

EU28 Tropical Log ImportsJan to Apr - 1000m3

EU28 Imports of Tropical Hardwood LogsMonthly Rolling Average - Mar 2012 to Aprl 2014

EU28 Tropical Sawn ImportsJan to Apr - 1000m3

EU28 Imports of Sawn Tropical HardwoodMonthly Rolling Average - Mar 2012 to Apr 2014

31

COMMODITY NEWSTIMBER

Improved Prices Now Well EstablishedThe upward movement in prices for the premium species continued into the first weeks of June and the new prices levels seem well established. Producers have been emphasising that they are currently close to the maximum log production limit in their government approved forest management plans and that it will be almost impossible to increase output any further.The tight log supply is impacting local mills cutting for export and some are struggling to maintain full production. The rainy season is already beginning in some areas and mills are earnestly trying to stockpile logs in anticipation of the disruption to logging.

[ITTO 15/06/14]

Mills Report Full Order Books Through Q3Producers report market demand continues firm and exporters have full order books for deliveries through to the third quarter. Buyers for the Chinese market are active making regular and consistent purchases of okoume logs, in particular from Congo Brazzaville. Middle East markets are also said to be active and firming with sawn okoume being the preferred species. Some exporters also report good business with mixed red timbers especially as these mixed parcels can be offered at prices that compete well with Malaysian mixed light hardwoods [MLH].

[ITTO 15/06/14]

EU Develops DNA Testing Regulation For WoodThe European Union [EU] has developed a new timber regulation that will require all timber and wood products entering the EU market to be genetically tested to identify their true origin. The objective of the DNA tracking system is to ensure that only timber products acquired from legal sources are supplied onto the European market. Already, the DNA technology for tracking timber has been enacted into law in Germany and it is being implemented by the authorities. The Thünen Centre of Competence has been established, which registers and checks timber importing companies on the origin and legal sources of products they import into Germany. The Centre has studied over 1,600 species from different parts of the world to identify their DNA properties and true origin. Professor Degen said the introduction of the technology to track timber sources was not to prevent exporting of wood and timber products into the EU market, but was to ensure that the trees were cut from legal sources.

For more information please see: http://www.ti.bund.de/en/startseite/home/thuenen-kompetenzzentrum.html[Business Ghana 02/06/14]

Log And Sawnwood Prices Realigned HigherProducers reported a few minor changes in prices for both logs and sawnwood during the last weeks of May. Analysts suggest that these changes are basically an upward realignment in prices for those timbers for which prices lagged behind the April firm upward movement. Overall the markets are stable and, at the moment, producers are concentrating on trying to satisfy their rather full order books. Demand remains good for logs and sawnwood with front runners appearing to be moabi, iroko, sapele and sipo for which demand is very high. Demand for okoume is very firm say analysts and producers in Congo Brazzaville are reporting full order books. Reports indicate that demand for sawn azobe is much improved and, as with other species, millers are working at full capacity. The pressure on production has meant that delivery dates are now extending into August or later for the species in high demand.

[ITTO 31/05/14]

Timber Industry Welcomes Anti-Corruption CampaignThe crackdown on illegal logging in Gabon continues with a report of a discovery by Forest Department officials of an attempt to buy and smuggle kevazingo [bubinga] logs, the export of which is banned in Gabon. The stepped up anti-corruption campaign in Cameroon, aimed at all sector in the economy, is working to safeguard the timber industry.

[ITTO 31/05/14]

Prospects Good Into Q4Producers have indicated that demand in the EU is almost back to normal levels for this time of the year. They also say demand for China is active but Indian buyers are on the side-lines at the moment as log stocks in India are high as so much was imported from Myanmar before the log export ban. Most producers are optimistic that the present stable to good market conditions will be maintained into the fourth quarter.

[ITTO 31/05/14]

32

CameroonExport Shipments Moving SlowlyExporters in Cameroon report that log exports are still well behind schedule because of the huge backlog of cargo at the port. Shipments have been hampered recently because of a delay in issuing a new contract for port operations. A new port operator has been appointed and exporters are hoping that work will begin shortly to ship out a very large stockpile of well over 250,000 m3 of logs that has built up over the past weeks. Some observers speculate that, possibly next year, Cameroon may begin to tighten up on log exports by further restricting the number and/or volumes of particular species that can be exported.

[ITTO 15/06/14]

GabonIndustries In Gabon Owed Billions In Tax Refunds

Exporters in Gabon are saying that delays in the TVA tax refund are having a negative impact on the industry. The delays in repayments are causing cash flow problems which have been made worse by the tight credit environment at local banks. While it is not clear exactly how much is owed to exporters, figures as high as CFA 240 billion have been mentioned.

The government of Gabon reportedly plans phased repayments but, as these are yet to start, the timber industry is experiencing serious financial problems. To make matters worse the industry still has to contend with delays with shipments because of continued industrial action by Customs staff who are members of the SNAD union which has orchestrated recent strike action. The Union is demanding, among other things, improvement of working conditions, the prompt payment of various allowances and construction of housing units for union members.

[ITTO 15/06/14]

GhanaNew Minister for Lands and Natural ResourcesThe President of Ghana has nominated a new Minster for Lands and Natural Resources, Nii Osah Mills. Mills replaces Alhaji Inusah Fuesini. Emmanuel Okletey Terlarbi has also been moved from the Ministry of Defence to the Ministry of Lands and Natural Resources as a Deputy Minister.

[ITTO 15/06/14]

FLEGT Action Plan AgreedGhana and the European Union [EU] have signed a memorandum of understanding [MoU] for the implementation of the FLEGT Action Plan. On conclusion of the VPA trade in illegal timber will be impossible. Ghana has demonstrated global leadership not only in the application of the wood tracking technology but also in the field of forest governance.

[ITTO 15/06/14]

Private Sector To Be Drawn Into Plantation DevelopmentsThe Forestry Commission [FC] is embarking on a forest plantation development plan to meet the rapidly growing demand for wood products and this will involve the private sector in conservation and development of forest resources. At a National Colloquium on Forest and Wildlife resource management in Accra, Musah Abu-Juam, Technical Director in charge of Forestry at the Ministry of Lands and Natural Resources, said the government has reviewed the policy on Forests and Wildlife to ensure conservation and sustainable development of resources in the sector. The FC policy is to promote the rehabilitation and restoration of degraded landscapes through forest plantation development and enrichment planting.

[ITTO 15/06/14]

33

COMMODITY NEWSTIMBER

EU Markets Absorbing More Of Ghana’s ExportsGhana’s exports of secondary wood products [SWPs], for Q1 2014 accounted for 90% of total export revenues according to available statistics from the Timber Industry Development Division [TIDD] of the Forestry Commission [FC]. Exports in Q1 2014 totaled €22.49 million compared to €29.48 million in Q1 2013. SWP includes sawnwood, veneers, boules and plywood. Wawa, mahogany, cedrella, koto, makore and teak were the major timbers exported during Q1 2014. Markets in the EU accounted for 42% of total in Q1, significantly higher than the 22% in the same quarter last year. Shipments to African markets slipped to 33% of all exports from last year’s quarter figure of 36%. The Asian, American and Middle Eastern markets accounted for the balance.

[ITTO 31/05/14]

Ghana To Issue First Timber Validity License In 2014The Deputy Minister of Lands and Natural Resources, Barbara Serwah Asamoah, has hinted Ghana could start the issuing Timber Validity Licenses [TVL] for timber exports to the European Union markets by the end of the year during a tour of timber companies in the Western Region with the EU Ambassador in Ghana Claude Maerten. The tour was to assess the country’s preparation towards compliance with the EU Voluntary Partnership Agreement [VPA].

Also in the group was Dr Ben Donkor, the Executive Director of the Timber Industry Development Division [TIDD] and Chris Beeko, Director in-charge of the Timber Validity Department of the Forestry Commission. Ghana had initiated several processes towards full compliance with the VPA, to pave the way for Ghanaian companies to export verified legally harvested wood products to EU markets. TIDD has positioned itself to ensure compliance with the Voluntary Partnership Agreement whilst the FC has put in place a Legality Assurance System [LAS] to help track timber as it moves through the supply chain.

[ITTO 31/05/14]

Liberia Liberia-EU Sign Forest Governance and Trade AgreementA joint agreement between Liberia and the European Union, which intends to put in place a system to verify the legality of Liberia’s timber production and strengthen forest sector governance was signed on 29th May. The meeting reviewed the implementation of the Liberia-EU Volunteer Partnership Agreement, which entered into force on the 1st of December 2013. The process, expected to last for several years, will bring the Liberian forestry sector into a state of the art and sustainable status.

The EU has similar agreements with Ghana, Congo, Cameroon, and Indonesia. Among the issues discussed were the key milestones in the development of the timber legality assurance system, recent developments and challenges in the sector, including forestry management agreement and improved transfer of timber revenues to communities. The issue of fraud and abuse in the forestry sector has been a serious problem. Recently, President Ellen Johnson-Sirleaf was compelled to impose a moratorium on all timber exports due to the fraudulent issuance of the Private Use Permits PUPs.

[Front Page Africa 01/06/14]

34

MalawiMalawi Earns US$138m In Tobacco SalesMalawi has realised US$138 million in tobacco sales over the past 11 weeks, marking a 38% increase over last year’s sales, Auction Holdings Limited [AHL] claimed. As of week 11, 83.605 million kg have been sold with burley accounting for 77.1 million kg, flue cured selling 5.5 million kg and the remaining 336,000 kgs being dark fired. Prices of dark fired tobacco dropped by 25%, from US$2.20 per kg to US$1.65 per kg - the biggest drop in the sales of the dark leaf this season.

[Star Africa 11/06/14]

35

COMMODITY NEWSTOBACCO

com-watch - issue 38 - july 2014 · ceec us$3.6 million loan for cashew nut industry the citizens...

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