Com-Watch - Issue 66 - November 2016

CMA CGM Promotes Bijagos Shuttle At Cashew Conference

Cote d’Ivoire: ICP Cocoa Grinder To Raise Capacity 50%

SADC Products To Gain Better Access To EU Market

03 06 16

AFRICACOM-WATCH

ISSUE 66 | NOVEMBER 2016

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AFRICACOM-WATCH

ISSUE 66 | NOVEMBER 2016

Contents

03 | Corporate

11 | Coffee

CMA CGM Promotes Bijagos Shuttle At African Cashew Alliance Conference

Angola: Angola Starts Exports To The United StatesEthiopia/Kenya: World Bank Group, Nespresso Aid East African FarmersKenya: New Coffee Dealers List Causes Concern / Nairobi Coffee Auction Cuts Sittings As Supply Drops / President Picks Team To Spearhead ReformsUganda: Exports Dropped 9% In August / Uganda To Plant Disease-Resistant Coffee Trees To Boost Output

14 | Cotton & TextilesCote d’Ivoire: Cotton Output To Rise 16% In 2016/17

16 | Foodstuffs, Livestock & BeveragesRegional: SADC Products To Gain Better Access To EU Market / Africa’s Agribusiness To Hit US$1 Trillion By 2030South Africa: US Poultry Industry Warns South Africa On AGOA Benefits / Pure Fruit Juice May Come Under Sugar TaxZimbabwe: Construction Of US$30 Million Pepsi Bottling Plant Begins

05 | Cashew, Groundnut, Macadamia & SheaNigeria: NCAN To Launch 8% Cashew Moisture Protocol / NCA Plants 250,000 Cashew Trees In 2016South Africa: Records Lowest Groundnut Harvest In 70 YearsTanzania: Cashewnut Board Overhauled, New One Set Up

06 | CocoaCote d’Ivoire: Start Of Cococa Season, Cocoa Price Set / ICP Cocoa Grinder To Raise Capacity 50% / Local Demand Key For West African Processors / Saf-Cacao Tops Ivorian Cocoa Buying / Port Arrivals Down 32% / Solea Cocoa Plantation Takes Shape / Black Pod Damages 20% Of CropGhana: Ghana Sets 2016-17 Season Farmgate Cocoa / Lindt Achieves Traceable Supply Chain / Cocoa Producer Price Adjusted / Ghana Likely To Miss 2016-17 Cocoa Targets / HFC Bank Earmarks GH¢198.1 Million Credit For Sector

15 | FishAngola: Network Of Fishing Inspection Stations Completed

04 | GeneralRegional: African Development Bank To Invest US$24 Billion In Agriculture

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THE AFRICAN COMMODITY REPORTBrought to you by CMA CGM Africa Marketing

Rachel Bennett Dominic Rawle

25 | Palm Oil & OilsRegional: Global Output To Grow 5.5 Million Tonnes In 2016/17West Africa: Netherlands Set To Implement SWAPP Phase TwoCameroon: CDC To Boost Nation’s Palm-Oil Output By 65%Gabon: Olam Ambassadors For Palm Oil SustainabilityGhana: Government To Establish Oil Palm Processing Plant In Volta RegionNigeria: Presco Plc Sees Profits On CurrencySierra Leone: Tomco Palm Oil Milling Operation

29 | SugarKenya: Secures 2-Year Deal To Keep Out Cheap Sugar Imports / Kenya To Push For Sugar Safeguard Extension At COMESA SummitTanzania: Zanzibar Sugar Plants To Address Shortage / Bakhresa Granted Land For Sugar Plant

30 | TeaKenya: Bomet/Kericho To Set Up Tea Auction Centre

31 | TimberCentral/West Africa: CITES CoP17 List New Species Under Control / Opportunities In Indian Log Market / Easier For Traders To Assess Market Direction / Prices Flat All Round / Gheombi Doing Well Against Malaysian MLH / Sipo, Sapele, Padouk And Ayous Prices Under PressureGabon: India Looks To Duty Free ZoneGambia: Timber Imports Banned In GambiaGhana: US$24 Million To Expand Sustainable Forests Through PPP / FAO Signs Agreement With 4-Institutions Re Timber ExportationMozambique: Prohibits Log Exports From January 2017South Africa: Structural Timber Sales Down / MTC Visits To Assess Falling Meranti Imports

36 | TobaccoMalawi: Tobacco Sales Down

18 | Fruit, Vegetables & HorticultureCameroon: Banana Exports DropMadagascar: Lychee Season Arrives EarlyMorocco: Success For Red Fruit Exports / Moroccan Strawberries Compete With Chile/Mexico In Europe / Morocco To Export 1.6M Tons Of Citrus Fruit, Early Fruit & Vegetables / U.S. Lifts Restrictions On Moroccan Citrus ImportsNigeria: Nigeria To Construct A US$120 Million Potato Processing FactoryRwanda: New Agricultural Input Distribution ModelSouth Africa: Early End To Citrus Season / Avocados To America & Nuts To China Boost Exports / Stone Fruit Volumes Slightly Up This SeasonSudan: Agricultural Sector To Receive US$60 Million From ChinaTanzania: Fruit Processing Factory InauguratedZimbabwe: Horticultural Exports Increase

CMA CGM Promotes Bijagos Shuttle At African Cashew Alliance Conference

From 19-22th September, CMA CGM participated in the 10th edition in the international cashew nut exhibition, held in Bissau, Guinea-Bissau. The conference was organized by the African Cashew Alliance [ACA], an association consisting of more than 130 African and international companies that promote production and market cashew on a global scale. Guinea-Bissau is the second largest producer of cashew on the African continent, after Cote d’Ivoire.

The Group, represented by Antoine Grangier, Manager Africa Lines HO, Daniel Carvalho, Sales Manager CMA CGM Senegal in Dakar, and Bakary Soro, Export Sales CMA CGM Ivory Coast in Abidjan, met with all of the sector’s actors: traders, processors, owners, investors, agronomists, producers etc. The event helped to better understand issues, trends and challenges in the sector and to meet with key customers.

It was also an opportunity for the Group to present the new CMA CGM service specifically dedicated to the export of cashew nuts, the Bijagos Shuttle service, launched for the 2016 cashew campaign. For further information, rates and bookings please contact your nearest CMA CGM agent.

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COMMODITY NEWSCORPORATE

RegionalAfrican Development Bank To Invest US$24 Billion In AgricultureThe African Development Bank Group [AfDB] has announced that it will invest US$24 billion in the agriculture sector over the next 10 years in its member state countries, to increase food production for human consumption and for industrial development.

[Monitor 13/10/16]4

COMMODITY NEWSGENERAL

NigeriaNCAN To Launch 8% Cashew Moisture ProtocolThe National Cashew Association of Nigeria [NCAN] is finalising plans to launch an 8% Cashew Moisture Protocol to minimise sprouting of exported raw cashew nuts and increase the shelf life to 12 or more months.

[Nigeria Today 09/10/16]

NCA Plants 250,000 Cashew Trees In 2016The National Cashew Association [NCA] of Nigeria announced the planting of 250,000 cashew trees in Oyo, Osun, Cross-River, Kwara and Abia States since May to boost overall production. Nigeria’s current production per annum is low at 160,000 MT. The move, in line with the association’s pledge to establish 100 plantations over 5-years, will increase production capacity to 500,000 MT/yr and boost foreign earnings. Further trees will be planted in 10 other states, including Enugu, Imo, Delta, Edo, Kogi, Niger, Nassarawa and Zamfara, in 2017.

[Eagle 08/10/16]

South AfricaRecords Lowest Groundnut Harvest In 70 YearsSouth Africa has recorded its lowest groundnut harvest in almost 70 years as drought continues to hamper progress in the agricultural sector as well as higher labour costs and reduced planting. The SA Grain and Information Services [Sagis] said the country produced 18,850 T of groundnut this year, its lowest since the 1945/46 season. Sagis estimates South Africa’s 2016/17 imports will be between 30,000-50,000 tons. During periods of lower production, the country imports from Argentina, China, Mozambique and Malawi. At the end of August 2016, South Africa had already imported 20,734 T of groundnut.

[IOL News 10/10/16]

TanzaniaCashewnut Board Overhauled, New One Set UpThe Agricultural Minister has overhauled the entire board and top management of the Tanzania Cashewnut Board, appointing new members to improve efficiency. A similar exercise will be conducted throughout all agribusiness centered boards. These include cotton, tobacco, coffee, sisal and tea. The minister further appointed CBT board members consisting of members representing large-scale cashew processors and two members representing cashew farmers.

[Daily News 18/10/16]

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COMMODITY NEWSCASHEW, GROUNDNUT, MACADAMIA & SHEA

Cote d’IvoireStart Of Cococa Season, Cocoa Price SetHeavy rain in most growing regions will improve the size of the upcoming main crop. The 2016/17 marketing season officially opened on Oct. 1 with the start of main crop harvesting. The main crop runs from October to March.

The nation has boosted the minimum price paid to farmers for their beans 10% from last year. Growers will get a minimum 1,100 CFA francs/kg [US$1.86] for beans for the main crop, according to Abdourahmane Cisse, the country’s budget minister. That’s up from 1,000 CFA francs last season.

Production dropped 13% to 1.565 million MT for the 2015-16 season. Exports for the season fell 4.9% to 1.548 million MT. Poor bean quality is also affecting processing, with the country expected to lose its spot at the top cocoa processor to the Netherlands this year, according to the International Cocoa Organization. Grindings will be 510,000 MT in 2015-16, down 8.6% from a year earlier.

Meanwhile cocoa futures in London climbed to a 6-year high in July as the Harmattan reduced output from the smaller of two annual crops in West Africa. Prices have dropped 4.5% in the past 3-months. [Bloomberg 28/09/16 / Reuters 26/09/16]

ICP Cocoa Grinder To Raise Capacity 50%The Ivory Cocoa Products [ICP] cocoa grinding company San Pedro port expects to increase its current annual capacity of 50,000MT by 25-50% in the next 3-years, helped by new tax measures. The ICP is one of 12 grinding companies in the country that offer a combined annual capacity of 720,000MT. But most produce 60-80% of that, and output has been further slashed by poor bean quality this year.

The Ivorian government announced reduced export taxes several months ago in a bid to encourage greater production and reward firms that grind locally. It aims to grind half its production domestically by 2020, up from about a third now. A new tax scheme will be officially released in several weeks, according to the President of the Coffee and Cocoa Council.

The government expects large trading houses such as Cocoa Barry, Olam and Cargill to boost capacity by at least 7.5% under the new scheme, but the companies have not yet said how much they plan to expand. The company has already doubled its grinding capacity since March to reach 50,000 tonnes, and the factory is designed for further expansion.

[Reuters 07/10/16]

“”

Taxes on exports of cocoa butter will fall to 11% from 14.6% and taxes on cocoa mass will drop to 13.2% from 14.6%, among other measures.

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COMMODITY NEWSCOCOA

Cote d’Ivoire

Local Demand Key For West African ProcessorsCocoa processing in Cote d’Ivoire should rebound in the upcoming 2016/17 season, buoyed by an expected larger and better quality crop, but its long-term profitability may depend on developing local demand for chocolate products. The nation lost is mantle as the world’s top cocoa processor in 2015/16 [October/September] when it fell behind the Netherlands due to quality problems with its crop linked to the El Nino weather phenomenon.

ICCO figures show Africa accounts for about 74% of world cocoa production, but many African farmers have never tasted chocolate, with the local processing industry dependent on export markets. By the end of August, grinders had processed 414,000T of beans since the 2015/16 season began on Oct. 1, down from 450,000T during the same period of the previous season according to GEPEX exporters’ association data. The final total could be below 475,00T less than the Netherlands’ 520,000T.

[Reuters 27/09/16]

Saf-Cacao Tops Ivorian Cocoa BuyingAccording to government data a unit of Cargill Inc and Saf-Cacao were last season’s biggest buyers of the beans. Cargill West Africa bought about 208,524 MT [13.3%] of cocoa from the start of the season on Oct. 1 2015 through Sept. 30. Saf Cacao purchased 173,377 MT [11%]. The 2-companies were the only ones to have a market share higher than 10%.

[Bloomberg 11/10/16]

Port Arrivals Down 32% Cocoa arrivals at Ivorian ports reached 98,000 MT by Oct. 16 since the start of the season on Oct. 1, down from 145,000 MT in the same period of the previous season. Exporters estimated that around 28,000 MT of beans were delivered to the state’s commercial capital of Abidjan and 29,000 MT to the southern city of San Pedro.

[Reuters 17/10/16]

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COMMODITY NEWSCOCOA

Cote d’Ivoire

Solea Cocoa Plantation Takes ShapeIn central-eastern Cote d’Ivoire, a cocoa plantation that will be Africa’s biggest, spanning an area equal to about 3,000 soccer fields, is taking shape.

Solea, a unit of Brussels-based KKO International SA, is developing about 2,000 ha of land near Bocanda and is trying to secure another 1,000 ha. Solea wants to plant 4 million cocoa trees complete with a micro-irrigation system on 3,000 ha by the end of 2018 and targets production of as much as 15,000 MT of beans when its trees reach maturity in 2024.

The project is unusual as 90% of its cocoa comes from family-run farms of 2-4 hectares. About 800,000 farmers grow cocoa in Ivory Coast using a limited amount of fertilizer and reaping beans from aging trees with methods remaining archaic.

National output fell 13% in the 2015-16 season to 1.57 million MT after plantations were hit by the worst desert winds in 30 years. A smaller-than-forecast African harvest in the season ended Sept. 30 led to a global shortage of 350,000 MT, the worst in decades.

Solea uses a more-productive hybrid cocoa seed called Mercedes, developed by an Ivorian research institute. It’s one flaw is that trees grow unequally, which the company wants to address through cloning. Solea is looking at ways to have 6,000 cocoa trees per hectare, compared with 1,300 in a regular Ivorian plantation.


Black Pod Damages 20% Of Crop Black pod disease due to weeks of heavy rain in the western and south-western regions has damaged about a fifth of the cocoa crop. About two thirds of cocoa comes from the affected regions, where about a third of the crop was affected. Farmers are not allowed to sell beans touched by rot, which damages the quality if it does not destroy them. The nation is in its rainy season and harvesting for the October to March main crop has begun.

[Business Recorder 16/10/16]

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GhanaGhana Sets 2016-17 Season Farmgate CocoaGhana will pay cocoa farmers 7,600 cedis [US$1,914] per tonne of beans during the 2016-17 season, nearly 12% more than last crop year, deputy finance minister Cassiel Ato Forson noted as he announced the start of the new season. The new price works out at 475 cedis per 64-kg bag and is higher than neighbouring Cote d’Ivoire. The purchase price is crucial to deter smuggling into Cote d’Ivoire, which set its producer price at the slightly lower level of US$1.86/kg. Cocoa regulator Cocobod is targeting production of 850,000-900,000 MT this season.

[Reuters 01/010/16]

Lindt Achieves Traceable Supply Chain Swiss chocolatier Lindt & Sprüngli announced it had achieved its goal of making its entire Ghana cocoa bean supply chain traceable and verifiable through its focus on farming initiatives. In 2008, the company launched the 4-pillar program in Ghana, with more than 48,000 farmers participating to establish traceability systems.

[Candy 05/10/16]

Cocoa Producer Price AdjustedThe Ghana Cocoa Board [COCOBOD] has reviewed upwards, the producer price of cocoa from GHc 6,720/T to GHc 7,520/T for the 2016/2017 season. The Board has hence announced new cocoa prices for the cocoa season pegging it at GHc 470 per bag of 64kg gross weight. The new rate is effective from October 1.

[Business Ghana 14/10/16]

Ghana Likely To Miss 2016-17 Cocoa TargetsGhana is likely to miss the 2016 17 cocoa target of between 850,000 and 900,000 MT production target projected by the Ghana Cocoa Board. Factors such as climate change which has reduced rainfall in cocoa growing areas, illegal mining activities that have destroyed many cocoa farms, pollution of river bodies and streams with mercury and cyanide and the use of substandard fertilizers and agro chemicals are greatly contributing to the worsening situation. The realistic target, according to experts at the Cocoa Research Institute [CRI] is between 650,000 and 700,000 MT for the 2016/17 season.

[Peace 06/10/16]

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COMMODITY NEWSCOCOA

Ghana.HFC Bank Earmarks GH¢198.1 Million Credit For Sector HFC bank has announced plans to increase its investment in the cocoa sector from GH¢90 million to GH¢198.1 million in order to further augment the availability of funds to players in the sector. The announcement was made at the bank’s first-ever consultative stakeholder summit held in Kumasi to discuss issues such as financing. The forum was attended by various businesses within the cocoa value chain, including cocoa farmers, LBC, haulage companies, agro-chemical Institutions and COCOBOD. The bank’s move is in response to projections of increasing yields per hectare in the sector, which presents a viable opportunity for financial institutions. The bank’s relationship with the cocoa industry began in 2012 and entails the financing of Licensed Buying Companies [LBCs]. Ghana hopes to produce between 850,000-900,000 MT of cocoa beans this crop season, up from the 750,000 MT produced in the previous crop season.

[Graphic 26/09/16]

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)

3 Oct 16 2009.34 2808.41 2217.00 2758.33

4 Oct 16 2021.83 2815.89 2237.33 2769.33

5 Oct 16 2034.77 2834.99 2252.00 2789.67

6 Oct 16 2007.21 2792.15 2232.00 2750.33

7 Oct 16 2002.43 2775.59 2261.33 2739.67

10 Oct 16 1932.44 2678.57 2189.00 2635.33

11 Oct 16 1936.69 2677.06 2210.00 2644.33

12 Oct 16 1920.86 2651.01 2196.00 2614.67

13 Oct 16 1946.27 2685.00 2210.00 2658.67

14 Oct 16 1954.89 2695.09 2225.00 2670.00

17 Oct 16 1938.86 2669.95 2205.33 2641.67

18 Oct 16 1937.32 2672.17 2186.33 2643.67

19 Oct 16 1948.32 2686.86 2198.67 2662.00

20 Oct 16 1945.06 2680.12 2198.67 2655.00

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AngolaAngola Starts Exports To The United StatesThe first tranche of coffee from Angola, weighing 11 tonnes, has arrived in the United States. The coffee is the first Angolan product to be exported to the United States under the African Growth and Opportunity Act [AGOA], which allows sub-Saharan Africa countries to place a variety of products on the US market with paying customs duties or taxes.

[Macauhub 28/09/16]11

COMMODITY NEWSCOFFEE

Ethiopia/KenyaWorld Bank Group, Nespresso Aid East African FarmersNespresso will co-invest US$6 million with the World Bank’s IFC [International Finance Corporation] in a landmark collaboration project to support coffee farmers in East Africa to combat the effects of climate change. The project, part of Nespresso’s AAA Sustainable QualityTM Program, will work with more than 40,000 smallholder coffee farmers in several regions of Ethiopia and Kenya to provide technical and financial support to increase sustainable practices and plant trees on their land.

[3BL Media 07/10/16]

KenyaNew Coffee Dealers List Causes ConcernThe Agriculture and Food Authority’s Coffee Directorate has issued firm instructions that dealers not included on a list of permitted traders should not be allowed at the Coffee Exchange. Of concern to farmers is the exclusion of the umbrella body, the Kenya Planters Co-operative Union [KPCU]. Reportedly the new list has ignored recommendations of the Presidential Task Force report on Coffee Reforms, just days after an implementation committee was gazetted.

Some say the move reinforces the entrenched cartel and locks out farmers-owned companies. The list was also released at a time when there are several court cases pending regarding the licensing powers and the implementation of the Presidential Task Force on Coffee Reforms report. Only 45 dealers will be allowed to trade in the crop while only eight millers have been licensed to continue with their work. The directorate has licensed 3-management agents, 6-growers marketers, 13-warehousing companies, 4-commercial warehousing and 6-commercial marketing agents.

[Standard Digital 04/10/16]

Nairobi Coffee Auction Cuts Sittings As Supply DropsLow supply from millers has hit the weekly coffee auction, forcing the exchange to cut sittings from four to two every month. The performance drop was due to bad weather. This has cut volumes that millers are bringing to the auction, meaning there is not enough quantity of clean [processed] coffee to sustain the trade at the Nairobi Coffee Exchange [NCE]. Low volumes has meant prices have surged to Sh20,000 per 50 kg bag in the last auction, compared with Sh19,000 that the produce was retailing at in the previous exercise. Coffee production declined by 16% to 41,000T in 2015 compared to 49,500T in 2014 according to Kenya National Bureau of Statistics.

[Business Daily 18/11/16]

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Kenya

President Picks Team To Spearhead Reforms President Kenyatta has appointed a team to oversee reforms aimed at turning around the coffee industry and to implement recommendations made recently by a coffee taskforce. The team comprises mainly of members who were in the taskforce that proposed a raft of measures to revive the industry. The move comes hot on the heels of a court injunction stopping any action on the taskforce’s report until a case filed by farmers and governors is determined. The case is slated for October 26. It will be chaired by Prof Joseph Kiayah, who similarly oversaw the work of the earlier taskforce.

In July a court suspended the application of the coffee regulations 2016, meant to bring reforms to the ailing sector. County bosses argue in court papers that agriculture is a fully devolved function under the Constitution and that they ought to be consulted on any matter relating to the sector. The National Farmers Federation [NFA] has disowned recommendations of the taskforce saying its views were altered to meet interests of cartels. Among other things, the taskforce proposed an increase on direct coffee sales from the current 10% to 30%, promotion of speciality coffee and turning the Nairobi Coffee Exchange [NCE] into a public limited company.

Currently, 90% of Kenyan coffee is traded at the NCE before accessing the export market with only 10% finding its way to the international market through direct sales. Industry stakeholders reckon that lack of a direct market deny farmers a lucrative income. The report recommends the establishment of the Central Depository Unit which will be a building block towards transformation of NCE to a commodity exchange. As an exchange, NCE would eliminate the need for the US$1 million guarantee which is a requirement to sell coffee to the auction and give access to farmers who do not have the finances to raise such funds.

[Daily Nation 02/10/16]

UgandaExports Dropped 9% In August Uganda’s coffee exports declined 9% in August, from the same month last year, due to harsh weather, the sector regulator Uganda Coffee Development Authority [UCDA] noted. UCDA said shipments were 291,059 60-kg bags, down from 320,297 bags exported in August last year. The report said some of the coffee growing areas had experienced dry weather conditions.

[Reuters 26/09/16]

Uganda To Plant Disease-Resistant Coffee Trees To Boost OutputUganda, Africa’s biggest coffee exporter, will plant trees resistant to the wilt disease in the next 3-years as part of a plan to boost production fivefold by 2020. The nation has developed 7-strains of the robusta variety and has started distributing seedlings to farmers. Wilt has destroyed more than half of Uganda’s robusta trees since 1993. Since then, the country has been replacing affected trees, as well as old and less productive ones, bringing the disease largely under control. The nation plans to plant 900 million new higher-yielding trees in the next 3-years, helping boost coffee output to 20 million bags. At least 80% of the new seedlings will be of the robusta variety, the bean type used in instant coffee, and some trees will start yielding by the second year. Robusta accounts for about 80% of Uganda’s coffee output. Production in the 12 months through September next year is expected to climb 5% to 4.2 million bags.


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COMMODITY NEWSCOFFEE

Cote d’IvoireCotton Output To Rise 16% In 2016/17Ivorian raw cotton output for the 2016/17 season is expected to reach 360,000T, a 16% increase on last year, according to the cotton ginners’ association. Output fell to 310,000T in the 2015/16 season due to bad weather, after reaching 450,000T the year before. Authorities are targeting annual production of 600,000T by 2020.

This season 343,000 ha has been planted with 94,000 farmers involved compared with 113,500 the previous year. Some were in debt and stopped farming after last year’s bad season, when the national output dropped by 30% following a bad weather. The country is one of West Africa’s major cotton exporters, with an annual output of about 400,000T before a 2002-2003 civil war halved production.

[Reuters 23/09/16]14

COMMODITY NEWSCOTTON, TEXTILES & LEATHER

AngolaNetwork Of Fishing Inspection Stations CompletedThe regional centre for fishing inspection in Dande, Bengo province, has been completed. The centre is the 7th of its kind and is equipped with a continuous monitoring satellite system for “monitoring fishing vessels” as well as a radio system to communicate with vessels. The centres installed in Namibe [2012], Kwanza Sul [2013], Zaire [2014], Cabinda [2014] and Luanda [March 2016], and the latest one in Dande along with the central station can trigger patrol boats to sail along the Angolan coast to reduce illegal fishing.

[Macauhub 28/09/16]15

COMMODITY NEWSFISH

RegionalSADC Products To Gain Better Access To EU MarketA new economic agreement between SADC and the European Union [EU] will soon come into effect, giving agricultural products from the region improved access to the EU. The SADC Economic Partnership Agreement [EPA] group, made up of Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland, has submitted the necessary instruments required to bring the agreement into effect.

The agreement will provisionally come into force between Southern African Customs Union [SACU] member states and the EU, on 10th October 2016, for all provisions of the agreement, except for the new agriculture market access that requires an exchange of letters between the EU and South Africa to confirm the protection of each other’s Geographical Indications names.

It is expected that the new agricultural market access will enter into force on 1st November 2016. The agreement will provisionally enter into force between the EU and Mozambique once the latter has finalised their ratification process.

[All Africa 07/10/16]

Africa’s Agribusiness To Hit US$1 Trillion By 2030 According to the International Finance Corporation by 2030, Africa’s agriculture and agribusiness market will triple to US$1trillion. Africa needs more than US$10 billion in new investment annually to achieve this expansion of output. One such example is the recent announcement by Promasidor Nigeria Limited [PNL] to inject US$25 million to expand production capacity at one of its processing facilities. Increasing investment in food-processing companies like PNL will help diversify Nigeria’s economy.

[Fresh Plaza 27/09/16]

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COMMODITY NEWSFOODSTUFFS, LIVESTOCK & BEVERAGES

South AfricaUS Poultry Industry Warns South Africa On AGOA BenefitsThe United States government has asked the government to challenge an attempt by South African poultry and pork producers to once again block US imports of those products. The US poultry industry has warned that South Africa could once again lose its trade free access for many exports to the market if South African poultry and pork producers get a court injunction to block US chicken imports. The US Poultry and Egg Export Council [USAPEEC] said that if the South African Poultry Association [SAPA] and South African Pork Producers Organisation [SAPPO] won their court case “it probably would trigger another out-of-cycle review under AGOA”.

South Africa nearly lost its key AGOA benefits last year as a result of an “out-of-cycle” review triggered by US poultry, pork, and beef producers who complained that South Africa was violating AGOA by blocking imports of their products. South Africa eventually negotiated its continued participation in AGOA by lifting 15-year-old anti-dumping duties for a quota of 65,000T of chicken parts a year and also lifted health restrictions which continued to block poultry, pork, and beef imports. But SAPA and SAPPO have now appealed the lifting of the health restrictions on imported US poultry and pork.

However even after the prohibitive antidumping duties on US poultry imports had been, US poultry producers are still paying normal duties of 37% versus zero for the EU. EU poultry enters the South African market tariff-free under the EU-SA free trade agreement.

[Engineering News 03/10/16]

Pure Fruit Juice May Come Under Sugar TaxPure fruit juice may be added to the list of drinks expected to face a levy under a proposed tax on sugary drinks, South Africa’s Treasury has said. In February, Finance Minister Pravin Gordhan proposed the tax on sugary drinks to be implemented in April 2017, aimed at fighting growing obesity in the continent’s most lucrative market for fizzy drinks.


ZimbabweConstruction Of US$30 Million Pepsi Bottling Plant Begins The construction of a US$30 million Pepsi bottling plant has commenced by Varun Beverages in Harare, Zimbabwe. All required machinery and equipment has been ordered and all resources needed for the completion of the plant are in place. The plant is expected to be completed by Q2 2017. The plant will focus on juice based beverages from PepsiCo‘s portfolio to augment its product offering. Varun has also invested in chilling units in line with its “Cold is Sold” business. Varun Beverages Ltd is one of the largest franchisee in the world of carbonated and non-carbonated beverages sold under trademarks owned by PepsiCo. They produce and distribute a wide range of CSDs, as well as a large selection of NCBs, including packaged drinking water.

[CR 04/10/16]

17

COMMODITY NEWSFOODSTUFFS, LIVESTOCK & BEVERAGES

CameroonBanana Exports DropThe Banana Association of Cameroon [Assobacam] noted that by the end of July 2016 Cameroon’s banana producers had exported 152,384T. The figure was a decrease of 5,000T compared to the 157,377T exported over the same period during 2015. The drop was attributed to Cameroon Development Corporation [CDC], the public agro-industrial company, whose exports were down 10,000T compared to the end of July 2015. CDC suspended its marketing activity for non-standard bananas this year only exporting 61,010T in the first 7-months of 2016, against 71,789T as of the end of July 2015.

Banana exports in Cameroon are still dominated by Plantations du Haut Penja [PHP], subsidiary of Compagnie Fruitière de Marseille. According to Assobacam, its exports represented more than 40% of total exports as at July end 2016, with 85,473T, against 92,874T during the period under review in 2015 - a drop of 7,401T.

[Fresh Plaza 27/09/16]18

COMMODITY NEWSFRUIT, VEGETABLES & HORTICULTURE

MadagascarLychee Season Arrives EarlyThe lychee season in Madagascar is much earlier this year compared to other years. Export volume is expected to reach 18,000 T and Malagasy producers are expecting to end the season earlier than planned. Export could go by 10-12th November. A week earlier than usual. Fruit load is higher than last year. Production increased over the 2012-2013 season when Madagascar was able to export almost 17,500 T. This volume increased to 18,000 T in 2013-2014, but decreased to 17,000 T in 2014-2015. Last year, Malagasy producers aimed at a 20,000 T export, but forecast data is not yet available.

[Fresh Plaza 13/10/16]19


MoroccoSuccess For Red Fruit Exports Red fruit exports from Morocco increased by 21% over the 2015-2016 agricultural season, seeing volume reaching 96,000 T. A large part of the export volume comes from the Loukkos region. 4,000 ha and 550 farms for red fruit production were recorded in the region in 2015-2016. Strawberries, blueberries and raspberries, both fresh and frozen, are exported to about 30 countries across the EU, to Asia, the Gulf, Australia, North Africa and Latin America. The increase in red fruit exports is thanks to the Green Morocco Plan business strategy. In order to increase exports, a B2B mission was recently organised for Moroccan red fruit exporters and producers in London. The aim was to reinforce exports to the UK market, evaluate potential and British market needs and strengthen relationships between importers and red fruit distributors.


Moroccan Strawberries Compete With Chile/Mexico In EuropeAccording to a recent study, Morocco already exports more strawberry than oranges, and they are now competing, in the European market, with Chile and Mexico, the leading suppliers of strawberries in winter and spring. Last season [2015-2016], Morocco exported to the European Union 100,000T of strawberry, double the amount of oranges they exported, which is traditionally their most prolific fruit. Spain, France and the United Kingdom imported 90% of the strawberries exported mainly drom the Gharb region, in the northwest, which has a significant input from offshore Spanish companies. Producers are also looking to export mainly frozen strawberries to other demanding markets, such as Russia, Canada, and the USA.

[EFE 18/10/16]

Morocco To Export 1.6M Tons Of Citrus Fruit, Early Fruit & Vegetables This year, Moroccan citrus and “primeur” [early fruit and vegetable] exports should reach the same level as last year, i.e. 1,6 million tons. Over the first week of the current export season, 3,000T has already been exported. Producers are underlining the fruit’s quality this year, in terms of calibre and taste, like they have over the last 2-years. In a recent meeting held by the citrus fruit committee, a communication plan with the Canadian market was underway. Morocco has already had encouraging results with this market last season, exporting over 57,000 tons. Out of the 1.6 million tons of fruit and vegetables to be exported this year, 67% will be made up of early fruit and vegetables, the rest citrus fruit. The EU remains Morocco’s main market, importing 220,000T of citrus fruit and early fruit and vegetables. Russia follows with 200,000T and Canada with 57,000T.


U.S. Lifts Restrictions On Moroccan Citrus ImportsThe United States has lifted its suspension of citrus imports from Morocco that began last January following the discovery of fruit fly larvae in a consignment of clementines. The export of citrus to the US resumed on October 13.

[Morocco World News 17/10/16]

20

NigeriaNigeria To Construct A US$120 Million Potato Processing FactoryA US$120 million potato processing factory and farm is set to be constructed in Manchok in Kaura Local Government Area in Nigeria. The new plant, which will need about 10,000 ha of land for potato cultivation, is being constructed by Vicampro International, an agro-based company with branches in several countries in partnership with the Nigerian government. It is anticipated to be the first of its kind in West Africa and is projected to be completed in the next 18 months. Upon completion, the factory is projected to have a capacity to process 2,500T of potatoes daily.

[CR 29/09/16]21


RwandaNew Agricultural Input Distribution ModelFarmers have welcomed the new inputs [seeds and fertilizers] distribution model which comes under the Government subsidy scheme, saying it will help curtail malpractices in the distribution chain. The new model was approved by the Cabinet. Farmers noted fertilizers were exported illegally to neighbouring countries and nepotism was rife due to the lack of a proper distribution channel. Under the new model, only 8-companies have signed contracts with the Rwanda Agriculture Board [RAB] to import mineral fertilizers under the Government’s subsidy programme.


South AfricaEarly End To Citrus SeasonThe South African citrus season is nearing its end, and despite fears of drought, low volumes and very small sizes before the season started, it seems to have been a reasonably positive season. The Valencia estimate was increased by ½ million cartons, but the total crop will still be 20% short of the 2015 record crop, and 10% off the initial estimate, according to the latest figures from the Citrus Grower’s Association.

Lemon volumes were also adjusted, up to 15.1 million cartons. The grapefruit and soft citrus packed figures are still seeing slight upward adjustments. The predicted total southern hemisphere export volume is now less than 2% lower than the March estimate. All harvesting and packing in the Western Cape has been completed, around 2-weeks earlier than normal and the overall crop is down in the region.

Local citrus farmers started turning to new markets in Asia last year after their largest market, the European Union, temporarily halted imports over concern that a fungal disease called citrus black spot would spread to farms in Spain. With the U.K. set to leave the EU, the chamber is also in talks with the U.K. High Commission about trade.


Avocados To America & Nuts To China Boost ExportsU.S. consumers may soon see South African avocados on their supermarket shelves as growers look for new markets to sustain export growth. South African agricultural exports surged 68% to US$7.3 billion in the 6-years through 2015. Trade increased as companies including Shoprite Holdings Ltd., the continent’s largest food retailer, took local products abroad. The “massive growth” is set to slow as producers start to source goods domestically, which means new markets need to be found.

There is huge potential, especially avocados into the U.S., and macadamias into China is a massive market. The country may ship avocados to the U.S. under the African Growth and Opportunity Act [AGOA], with the fruits entering that market without duties.

Meanwhile South Africa exported US$245.7 million of macadamia nuts globally last year. Of that, US$30.7 million was to the U.S. and US$4.2 million was for China. Hong Kong was the biggest buyer at US$84.5 million, while Vietnam, the Netherlands, Germany, and the U.K. ranked as other top purchasers.


22

South Africa

.Stone Fruit Volumes Slightly Up This SeasonDespite prolonged drought conditions and a cool spring, the South African stone fruit season is expected to be relatively normal and is looking positive at the moment, according to the pre-season estimate released by the South African Stone fruit Producer Association [SASPA]. The start to the harvesting season is similar to last year. The projected increases in export volumes for nectarines [+5%], peaches [+4%], and plums [+6%] are as a result of young orchards coming into production. There has been steady growth and replacement in nectarine, peach and plum plantings over the past number of years. Recent information has indicated that the growth trend in peaches and nectarines has stabilized.

[Hortgro 20/10/16]

SudanAgricultural Sector To Receive US$60 Million From ChinaSudan is set to receive US$60 million from the Chinese government to boost strategic partnership between the 2-countries in the field of agricultural investments. Addressing the Sudanese-Chinese Forum for Boosting Agricultural Cooperation and Investment, the Chinese Minister of Agriculture Han Changfu, noted China is keen to invest in Sudan with more than 27 institutions already investing. China is ready to import Sudanese products which meet the specified technical requirements and will exempt them from customs fees.


23


TanzaniaFruit Processing Factory InauguratedPresident Magufuli has inaugurated a US$120 million fruit processing factory in the outskirts of Dar es Salaam. The investment in Mwandege, Mukuranga District, has the capacity to process between 20,000-25,000 T/yr. The facility is the second Bakhresa investment in the area, which brings to 13 the number of factories owned by businessman Said Salim Bakhresa in Dar es Salaam and Coast regions.

ZimbabweHorticultural Exports IncreaseAccording to trade promotion agency Zimtrade, Zimbabwe’s horticultural exports amounted to US$72.1 million in 2015, a significant increase from US$49 million the previous year, but still about half of the country’s peak output recorded in the 1999/2000 season.

The Netherlands remains the biggest single buyer of Zimbabwe’s fresh produce, accounting for US$32.6 million [45%] of total horticulture exports. The European Union consumes the bulk of Zimbabwe’s exports, with the United Kingdom [US$13.5 million], Germany [US$5.3 million], France [US$3.2 million] and Poland [US$2.9 million] taking up a combined US$57.5 million worth of horticultural produce.

Citrus was Zimbabwe’s leading export horticulture product in 2015, making up 32% of total volumes, followed by flowers at 25%, peas 19%, dried leguminous vegetables 11%, berries 7% while an assortment of other produce made up the remaining 6%.

[Southern African News 20/10/16]

24

RegionalGlobal Output To Grow 5.5 Million Tonnes In 2016/17Global palm oil output will grow by 5.5 million tonnes in the new oil year beginning October. Palm oil output next year is expected to improve after crops took a hit this year from the lingering effects of El Nino. Global supplies of will still be tight from now until March, but production will rebound by 5.7 million-6.3 million tonnes in calendar year 2017.

Global output in calendar year 2016 is expected to drop by 3.3 million tonnes to 59.2 million tonnes. The 2016 output forecast was also lowered for top producer Indonesia by 100,000 tonnes to 32.2 million tonnes, and for second-largest producer Malaysia by 300,000 tonnes to 17.8 million tonnes.

[Reuters 13/10/16]

West AfricaNetherlands Set To Implement SWAPP Phase TwoPhase-2 of the Sustainable West Africa Palm-oil Programme [SWAPP] is to be implemented across the sub- region following the significant impact of Phase-1. SWAPP is a 4-year programme funded by the Dutch implemented in Ghana, Nigeria and Ivory Coast with focus on increasing productivity and profitability of the Small to Medium Scale Enterprises [SME’s] in the palm oil sector. Phase-1 was introduced in 2012 and ends in Q4 2016 and is expected to be extended from 2017 to 2020. A Palm Oil Development Board is to be instituted in Ghana to facilitate development in the sector.

[Footprint On Africa 15/10/16]

25

COMMODITY NEWSPALM OIL & OILS

CameroonCDC To Boost Nation’s Palm-Oil Output By 65%Cameroon’s top state-owned agribusiness plans to help boost palm-oil output in Africa’s third-largest producer by about 65% by 2020. The Cameroon Development Corp. wants to help increase the country’s annual production to 450,000 MT. Output will total 270,000 MT in the 2016-17 season. That’s less than annual consumption estimated by the Ministry of Agriculture and Rural Development at about 385,000 MT. Meanwhile CDC officials recently visited Malaysia, the world’s second-biggest producer, to study production techniques.


GabonOlam Ambassadors For Palm Oil SustainabilityOlam International is making strides in Africa’s palm oil sector by becoming the first company to receive verifications from the Roundtable on Sustainable Palm Oil [RSPO], including the first-ever African working plantation to become certified. The Awala plantation is breaking new ground by becoming the first palm plantation to get RSPO new planting procedure verification, and in turn is boosting Africa’s RSPO-certified production hectares by 30%.

Another key development for Olam Palm Gabon [OPG] is the Moulia plantation located south of Awala. Around 31,000 hectares have already been planted, in full compliance with RSPO guidelines and it looks highly likely this area will also progress towards official certification in 2017.

[Food Ingredients 05/10/16]

26

GhanaGovernment To Establish Oil Palm Processing Plant In Volta RegionPresident John Mahama announced that the Government will assist the people of Ddzodze in the Volta Region to establish a 50-acre palm oil processing plant. Last month cabinet passed the oil palm regulatory board [bill] to be put before parliament in October. When parliament passes the Act, a board will be set up and it will be responsible for driving investment in that sector.

[Pulse 02/1/016]27

COMMODITY NEWSPALM OIL & OILS

NigeriaPresco Plc Sees Profits On CurrencyNigeria’s ban on importers accessing foreign exchange for certain products is proving a benefit for the country’s biggest palm-oil producer as it stokes demand for domestic goods. Profit at Presco Plc, a Benin City-based manufacturer of the edible oil, more than doubled in the 6-months through June as sales jumped 60% to $US$24 million. The outlook for the next 4-years is a 10% annual profit growth. However Presco faces challenges from the dollar scarcity as it imports fertilizers, chemicals and equipment including spare parts for plants, to increase output.

Nigeria’s central bank stopped importers of 41 items, including palm-oil and textiles, from accessing official foreign-exchange markets in June 2015. The measure was part of a plan to prop up the naira after it plunged against the dollar following a drop in the price of crude, the country’s biggest source of foreign-exchange. A 15-month dollar peg that ended on June 20 caused a foreign currency shortage that contributed to West Africa’s biggest economy contracting in the first two quarters and drove inflation to the highest rate in more than a decade. The peg removal led the naira to weaken 37% against the dollar. That hasn’t improved the availability of U.S. currency and most foreign investors are yet to return.

The company, which operates 16,900 ha of palm-oil plantations and sells its output locally, plans to increase the export of palm-kernel oil to Europe, mainly the Netherlands, to enable it access dollars and cushion the impact of the scarcity in Nigeria. Exports contributed 5% of revenue from January to August and the company plans to increase palm-kernel crushing capacity to 100 tons daily by 2018, from 60 tons currently.

It plans to increase oil-palm plantation to 31,400 ha by 2021 from 16,900 while it targets to raise palm-oil mills capacity to 120 T/hr from 60 T/hr. It will start work on a 500 T/dy palm-oil refinery and fractionation plant next year, which will be completed by 2018 to increase current capacity of 100T.

Presco supplies fats and oils to some of Nigeria’s biggest manufacturers including PZ Cussons Plc, Dangote Industries Ltd. and May & Baker Nigeria Plc. Nigeria’s demand for palm oil is greater than its output. It consumed 1,405,000T in 2013 while it produced 930,000T. The forecast for the 2016-2017 season is 970,000T, making it Africa’s largest producer and the world’s fifth, behind Indonesia, Malaysia, Thailand and Colombia, according to data from the USDA.


Sierra LeoneTomco Palm Oil Milling OperationTomCo noted following completion of the equity fundraise announced on 2nd September, discussions have been ongoing with potential debt providers with regards to securing a debt facility to part fund the proposed palm oil milling operation in the Makeni oil palm belt in Sierra Leon.

The move will enable the company to commence procurement and construction of the initial 1-t/hr processing plant. TomCo is considering proceeding directly to developing a 2t/hr palm oil production plant and associated packaging plant, with an expected aggregate capital cost of approximately US$1.25 million, rather than a phased ramp up from 1t/hr to 2t/hr.

[Digital Look 07/10/16]

28

Kenya Secures 2-Year Deal To Keep Out Cheap Sugar ImportsKenya has won a 2-year extension of sugar import limits from the Common Market for Eastern and Southern Africa [COMESA] to give it more time to overhaul its ailing sugar sector. The arrangement capping cheaper imports was scheduled to expire soon. The deal was struck at a meeting of COMESA in Madagascar. The government is selling shares in some of its sugar factories, hoping to bring in capital and the expertise needed to pull the sector out of the doldrums. Kenya produces about 600,000 MT of sugar a year, compared with annual consumption of 800,000 MT. The deficit is covered by strictly controlled imports from COMESA. Experts have blamed the high cost of production for the problems facing Kenya’s sugar industry. Poorly funded government factories have aging machinery that is prone to breaking down. The roads in most sugar growing areas are also in poor shape.

[Reuters 12/10/16]

Kenya To Push For Sugar Safeguard Extension At COMESA SummitDeputy President William Ruto was in Antananarivo, Madagascar for the 19th Common Market for Eastern and Southern Africa [COMESA] Heads of State and Government summit where Kenya will push for an extension of the sugar safeguard from the COMESA region into the country. The current safeguard which was granted in 2015 is due to expire in February 2017 and the country is still unable compete on equal terms due to in-built structural weaknesses such as high fragmented land tenure system.

[Capital Business 17/10/16]

TanzaniaZanzibar Sugar Plants To Address ShortageA multi-million sugar factory is set for commissioning in Zanzibar as the investor, Quality Group Limited [QGL], has acquired land rights for the project. Two plants are planned for Mkundi in Morogoro and Pemba. The US$50 million facility will have an annual installed capacity of 280 MT over 20,000 ha. Construction is expected to take 24 months, from December 2016. The project will be implemented in phases, with the first phase covering the installed capacity of 100,000 MT, and the second phase’s 180 MT.

Tanzania’s demand for sugar has been increasing dramatically. Demand stands at 450,000 MT, with domestic producers just producing a combined total of 300,000 MT, leaving a deficit of 150,000 MT.


Bakhresa Granted Land For Sugar Plant President Magufuli has issued 10,000 ha of land to one of Tanzania’s business and industrial moguls, Chairman of Bakhresa Group of Companies, Said Salim Bakhresa, to establish a sugar plant.


29

COMMODITY NEWSSUGAR

KenyaBomet/Kericho To Set Up Tea Auction CentreSmall-scale tea farmers in Bomet and Kericho counties have decided to establish a regional auction centre to market their produce locally through the ‘Silibwet Declaration’. The auction bay will be the second largest in Kenya and third largest in Africa. It will be set up in Kericho. Previously, farmers had to pass through the Mombasa auction. The farmers will now avoid brokers and cartels, whom they termed exploitative. The auction centre will bring together farmers from the Western bloc – Bomet, Kericho Kisii, Nyamira and Nandi.

[Star 29/09/16]30

COMMODITY NEWSTEA

Central/West AfricaCITES CoP17 List New Species Under ControlDelegates at the 17th Conference to the Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora [CITES CoP17] voted to list the entire Dalbergia genus within Appendix II of the Convention as well as 3-species of Guibourtia from Central Africa and Pterocarpus erinaceus from West Africa. The Appendix II listings mean control measures will be put in place to control commercial international trade in the species. Dalbergia is large and widespread often traded as “rosewood” or exported to China as Hongmu “redwood” timber used for furniture-making. The Guibourtia species are traded internationally under the name of “Bubinga” and are used as a substitute for Hongmu timbers in China.

[TRAFFIC 03/10/16]

Opportunities In Indian Log MarketProducers report that as demand for logs is only moderate they have little opportunity to seek higher prices, this despite buyers for the China slowly but steadily coming back into the market for African logs. Indian log importers are very active in the market for tropical hardwoods but West and Central African exporters have, so far, not followed up on the opportunity to enter this expanding market.

[ITTO 16-30/09/16]

Easier For Traders To Assess Market DirectionWith very few exceptions prices continue stable as producers are matching output closely to demand levels to avoid any build-up of stocks which could put a downward pressure on prices. Buyers also are playing the market very carefully seeing no advantage in speculative purchases, being content to import to sufficient to satisfy immediate demand. In this way stocks are kept to a minimum. This trading pattern is very different from the past style of ‘hand-to-mouth’ buying. The immediate concern of both producers and importers is currency volatility triggered first by the decision in the UK to exit the EU and as investors move funds seeking safe havens.

[ITTO 01-15/10/16]

31

COMMODITY NEWSTIMBER

Central/West Africa

.Prices Flat All RoundOverall, producers report no significant change in the market situation as demand remains moderate. Prices ofsapelli and sipo, as of mid-October, were weak but despite this there is still no interest from buyers in Europe orChina. However, demand for beli remains firm in the Chinese market. Over the past two weeks there have been reports of an upturn in interest from buyers for the Chinese market.

[ITTO 01-15/10/16]

Gheombi Doing Well Against Malaysian MLHOkoume and meranti sawnwood compete for market share particularly in the South African and Middle East markets. In recent weeks meranti has been gaining market share in South Africa but in the active Middle East markets business is said to be brisk for both timbers. Middle East demand is focused on the luxury housing sector which requires high grade sawnwood and mouldings. In the lower endues applications shippers in West and Central Africa are finding a ready market for mixed gheombi which it is said to be preferable to Malaysian MLH [mixed light hardwoods].

[ITTO 16-30/09/16]

Sipo, Sapele, Padouk And Ayous Prices Under PressureBuyers in the European markets are not yet fully committed to their fourth quarter purchase which has meant prices for their favourites, sipo and sapele, have not moved for a month. Analysts say there are no clear signs of a recovery in demand for sipo and sapele sawnwood. Padouk sawnwood is still out favour in European and Indian markets and prices will be under pressure unless demand picks up soon. While demand for ayous in the Italian market is currently very quiet, prices remain stable. It is anticipated that demand in Italy will recover towards end of the year. Overall, West and Central African producers report moderate business in terms of volume and are content as prices are holding as they have done for most of this year.

[ITTO 16-30/09/16]

32

GabonIndia Looks To Duty Free ZoneSome Indian companies are interested in setting up processing facilities in Gabon’s Duty Free Zone [DFZ] and log producers report preliminary enquiries for long term supplies of okoume peeler logs. There have been reports of Indian entrepreneurs considering the building production plants in Congo Brazzaville but deciding against this perhaps because, as suggested by analysts, the quality of okoume logs in Congo Brazzaville is an issue. Downstream mills that are already producing doors, windows and other joinery in the Gabon DFZ are complaining that taxes and the duties levied on goods for export to the CEMAC countries are far too high. Manufacturers are beginning to lobby the authorities for a review. If intra-regional trade is to grow then there is a need for improved infrastructure, harmonisation of duties and customs entry and exit procedures as well as elimination of costly informal tolls.

[ITTO 01-15/10/16]

GambiaTimber Imports Banned In GambiaThe Gambia announced a ban on importing timber on 27th September after years of accusations from neighbouring Senegal that it profits from illegal logging across their border. Gambian loggers have long benefited from lax oversight of Senegal’s southern Casamance forest to take prized rosewood timber over the border before exporting the logs to China. Security personnel manning borders have been instructed not to allow any logs to enter the country.

[ENCA 28/09/16]

33


GhanaUS$24 Million To Expand Sustainable Forests Through PPPGhana received approval on September 22nd from the African Development Bank [AfDB] for a project to restore degraded forest reserves and double a sustainable forest plantation through a first-of-its-kind Public-Private Partnership [PPP] in its forest sector. The project is backed by a US$10-million concessional loan from the Climate Investment Funds’ Forest Investment Program [CIF FIP] approved on July 1, and supplemented by US$14 million in co-financing from the AfDB. The project approval comes a day after Ghana ratified the Paris Agreement on climate change at the UN in New York, signalling its full commitment to linking its climate action and development path.

Ghana’s forests, which once covered a third of its 24-million-hectare landmass, have been degraded at an alarming rate by excessive and often illegal logging, slash-and-burn agriculture, mining and quarrying, and fuelwood collection. The newly approved project aims to help reverse this trend by restoring and expanding an existing Forest Stewardship Council [FSC] certified 5,000 ha forest plantation to nearly 12,000 ha of sustainable commercial forest plantation made up of 10% indigenous tree species and 90% teak.

[AfDB 26/09/16]

FAO Signs Agreement With 4-Institutions Re Timber ExportationThe Food and Agriculture Organisation [FAO] signed agreements with 4-institutions on 18th October, including the Forestry Commission [FC], and timber processing groups to build their capacity in the management and exportation of timber. As part of the agreement, two institutions under the FC, the Timber Development Division and the Resource Management Support Centre, will lead actions that support increased opportunities and capacity development for small-holders and artisanal millers to encourage the legal production of timber in the country.

The agreements also focus on helping the private sector to comply with the Voluntary Partnership Agreement [VPA] signed between Ghana and the European Union [EU] in 2009 to address the problem of illegal logging and trade in associated timber products. Funding for beneficiary institutions under the agreements range between US$75,000-300,000. The agreements form part of the preparations for the issuance of Forest Law Enforcement Governance and Trade [FLEGT] licences under the VPA.

[Graphic 19/10/16]

34

MozambiqueProhibits Log Exports From January 2017Cut wood in Mozambique will no longer be exported as logs from January 2017 according to the Forestry, Environment and Rural Development Ministry. An announcement was made on the side-lines of the first national meeting of the sector held in Beira, Sofala province. Under current law, the export of first class wood can only occur after processing in the country, while the remaining quality classes can be exported as logs. Legal wood cutting in Mozambique totals between 515,000-640,000 cu.m/yr, but due to the pressure on forest resources, these targets have been exceeded, which has led the government with support from the Bank World to survey forest operators in 2015. The survey revealed the existence of 1,081 operators in Mozambique, of which 198 are concessions and the remaining 707 only simple licenses, which is considered unsustainable in forestry due to lack of plans to replace trees that are cut down.

[Macauhub 30/09/16]

South AfricaStructural Timber Sales DownSeptember sales of structural timber sales are still strong and this can be judged from stock levels at most mills. It is reported that some mills are down to just a few days stock and this, although good on the one hand, is not good on the other as merchants and fabricators are experiencing frustration as they cannot get the required dimensions for their roof truss plants. Some end-users are talking about turning to steel if the situation does not improve.

[ITTO 16-30/09/16]

MTC Visits To Assess Falling Meranti ImportsRepresentatives of the Malaysian Timber Council were in South Africa in early October and they expressed disappointment on how the market for Malaysian sawnwood has shrunk from about 130,000 cu.m in 2007 to just 61,000 cu.m annually. Part of the reason is that there have been some significant company closures such as the recent collapse of Zikiza and there has been a strong performance of steel and aluminium especially in the window market. Local analysts also point to some negative trading issues with Malaysian suppliers which have disappointed importers such that they have shifted to other species such as okoume where pricing and delivery is more predictable. Another issue that has impacted meranti imports is the move to pine and eucalyptus by door manufacturers.

[ITTO 1-15/10/16]

35


MalawiTobacco Sales Down Auction Holdings Limited noted tobacco sales have raked in K171 billion so far in the last 6-months down from K244 billion for the same period in the previous year. This year has seen low prices coupled with a high rejection rate. 150 million kg was sold at an average of US$1.36 compared to last year’s 190 million kg at US$1.76.

Meanwhile the market was supposed to close in September but there is lots of tobacco yet to be bought due to overproduction of the leaf. 165 million kg of tobacco was produced up from 133 million kg. The law does not allow tobacco to be sold in the next season.

[Nyasa Times 11/10/16]36

COMMODITY NEWSTOBACCO

Documents

Com-Watch - Issue 66 - November 2016