1. Art and Diseño

COM-WATCH
AFRICA
ISSUE 45 | FEBRUARY 2015
AFRICAN COMMODITY EXCHANGE
• ANGOLA TO HAVE COMMODITIES EXCHANGE (P.3)
• TANZANIAN COMMODITY EXCHANGE IN PIPELINE (P.3)
• ICE TO LAUNCH EURO-DENOMINATED COCOA CONTRACT (P.6)
Gambia Government Targets
35,000T Of Groundnut
4
Kenya Boosting Coffee Exports
With Branding Initiative
14
Senegal Onion Sector SelfSufficient By 2016
21
COM-WATCH
AFRICA
ISSUE 45 | FEBRUARY 2015
Contents
03 / General
17 / Cotton, Textiles &
Leather Goods
04 / Cashew,
Groundnut & Shea 19 / Fish
24 / Rubber
25 / Sugar
29 / Tea
20 / Foodstuffs &
Beverages
05 / Cassava
31 / Timber
06 / Cocoa
22 / Palm &
Edible Oil
13 / Coffee
Top Stories
3
Angola To Have Commodities
Exchange / Tanzania Commodity
Exchange In Pipeline
4
Gambia Government Targets
35,000T Of Groundnut
6
ICE To Launch Euro Cocoa
Contract
14
Kenya Boosting Coffee Exports
With Branding Initiative
21
Senegal Onion Sector SelfSufficient By 2016
1
33 / Tobacco
THE AFRICAN COMMODITY REPORT
Brought to you by CMA CGM / DELMAS Marketing
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indirect or consequential loss or damage suffered by any person as a
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sole responsibility of the reader.
News Headlines By Region
Western Africa
Angola: Angola To Have Commodities Exchange / Bioenergy Company Produces 3,100 Tons Of
Sugar
Benin: Import Embargo On Poultry From Nigeria
Burkina Faso: 2014-15 Cotton Harvest Seen Just Under 700,000T / 2014-2015 Cotton Marketing
Year Sees Production At 540,000T
Cameroon: 10 Cassava Processing Units In Development / Cocoa Bean Exports Rise 9.5% Yr-Yr
By End December / Cocoa Bean Prices Rise / Robusta Exports At 698T In December / To Boost
Palm-Oil Production 26% In 3-Years / CFAF13.7 Billion Program To Develop Timber Industry /
Timber Think Tank Publishes Critical Report
Côte d’Ivoire: Cashew Production To Hit 600,000T in 2015 / Stricter Cocoa Controls Cause Bottleneck
neck In Ports /
Puratos Inaugurates Cocoa Plant / Cocoa Arrivals At 1,045,000T By Jan. 25 / Exceeds 2014 Rubber
er Forecast
Gambia: Government Targets 35,000T Of Groundnut / Government To Licence Dealers In Basic Food
od Commodities
Ghana: Cocoa Board To Cut Crop Forecast On Dry Winds / Touton Sets Up Cocoa Processing Factory
tory / Q3 Timber
Exports Up 21%
Guinea-Bissau: Cashew Export Forecast At 200,000T
Liberia: Equatorial Palm Oil Secures Development Loan
Mali: Targets 800,000T Of Cotton Per Year By 2018 As Output Jumps
Morocco: To Export 100,000T Less Citrus Fruits Than Projected
Nigeria: NEPC To Train Farmers In Shea Butter Production / Cocoa Processors Groan Under Huge Debts / MidCrop Cocoa Threatened By Prolonged Dry Winds / Cotton Fetches Lower Price In Global Market / Dufil’s Backward
Integration In Palm Oil Sector
Sao Tome & Principe: European Parliament Approves Fisheries Agreement
Senegal: Onion Sector Self-Sufficient By 2016
Togo: Togo To Resume Cocoa And Coffee Production
Eastern Africa
Ethiopia: Heineken Inaugurates Largest Brewery In The Country
Kenya: Cassava Plant For Teso South / Cassava Virus Alert / Coffee Earnings Jump 17% In 2013-14
Crop Year / Coffee Boosting Exports With Branding Initiative / Government Raises Concern Over Coffee
Industry / Measures Introduced To Increase Cotton Output To 140,000 Bales / Kenya To Establish Leather
City To Spur Industrialization / Sugar Import Safeguards Come To An End / Raw Sugar Production
Expected To Rebound In 2015 / Tea Farmers Demand Reduction Of KTDA Management Levy /
Microfinance Institution To Expand Beyond Tea Sector / Tea Farmers Reject Takeover By County / Egypt
Will Go On Buying Kenyan Tea / Top Price Of Kenya’s Best Grade Tea Rises At Auction
Malawi: Malawi Assesses Flood-Damaged Tobacco
Mozambique: Niassa Company Sells US$8 Million In Cotton
Tanzania: Commodity Exchange In Pipeline / Arabica Prices Rise As Auctions Resume / Kagera Needs 67
Million Coffee Plants To Boost Production / Bulk Sugar Importation Scheme Delayed
Uganda: Coffee Exports Down 13% Yr-Yr In December / Sugar 2015 Output At Top Producers Up 11%
Southern Africa
Madagascar: Chezda Cyclone Destroys 25% Of Rice Production
South Africa: Drought Closes KZN Sugar Mill
Swaziland: Sugar Production Expected To Grow 5% Over 3-Years
Zambia: Zambia Sugar Posts Record Sugar Production / ZAFFICO Pressed To Meet Timber Demand
Zimbabwe: Tongaat Hulett To Double Cane Production By 2016 / Zimbabwe Imported US$29 Million Tobacco For
Blending
2
COMMODITY NEWS
GENERAL
Angola
Angola To Have Commodities Exchange
The Capital Market Commission [CMC] of Angola will this year prepare a study with the aim of opening a Commodity Exchange
to trade agricultural and livestock commodities contracts. The exchange will trade spot products. The exchange aims to bring
together large, medium and small farmers from around the country.
[Macauhub/AO 22/01/15]
The Ethiopia Commodity Exchange
Tanzania
Commodity Exchange In Pipeline
Plans to set up the first commodity market in the East Africa Community [EAC] has made progress after registering a company
and identifying a trading house. The move, that started 2-years ago, is waiting for the passing of relevant laws and regulations,
training, testing and licensing of dealers. The process is to be finalised next year. The Tanzania Commodity Exchange Market
Company Ltd was incorporated 3-months ago. The trading office will be in Kijitonyama along New Bagamoyo Road with funds
secured from the World Bank.
The exchange will initially trade in 4-crops - cashew, coffee, cotton and rice which are currently being traded under the
warehouse receipt system. The exchange is designed to include a trading floor, warehouse delivery locations and price tickers.
President Kikwete, the pioneer of the market, said after visiting Ethiopian Commodity Exchange [ECX] in 2013 that the exchange
would provide a marketplace where buyers and sellers meet to trade and be assured of quality, delivery and payment. A special
committee was set up last year to fast-track the scheme.
[Daily News 01/01/15]
3
COMMODITY NEWS
CASHEW, GROUNDNUT &
SHEA
Côte d’Ivoire
Cashew Production To Hit 600,000T in 2015
Whilst the cashew campaign for the 2014-2015 season opens next month, the Ivorian
authorities have indicated an estimated production of 600,000 tons. According to Council
of Cotton and Cashew, 540,000 tons will be destined for export while 60,000 tons will be
processed locally. During the 2013-2014 campaign the country produced 550,000 tons.
This ranked the country first within Africa and represents 20% of the world production. The
challenge will be to create further infrastructure similar to a processing factory launched in
Bouake in October 2014 by Cajou des Savanes to continue the trend.
[Agent 26/01/15]
Gambia
Government Targets 35,000T Of Groundnut
The government through the Gambia Groundnut Corporation [GGC] is to purchase
30-35,000 MT of groundnuts for the 2014/15 trade season. GGC has pre-financed
80 Cooperative Produce Societies across the country for the trade. The GGC, the
government’s corporative body responsible for the commercialisation of groundnuts,
officially announced the start of the trade season on 9th January. GGC pegged the farm
gate price at the secco at D15,250 per ton and at national depots at D16,500 with a
commission of D1,250. The target is to buy all groundnuts produced. 18 private traders
have been also pre-financed by the government to trade. GGC will embark on a nationwide trade during which they will find out whether farmers have easy access to the primary
buying points. The quality of groundnuts this year are higher than that of last year’s despite
poor rainfall at the beginning of the season. URR North and South are leading areas in
production. Meanwhile there is more than enough fertiliser with each secco and is sold to
farmers at an affordable price.
[Daily Observer 16/01/15]
Guinea-Bissau
Cashew Export Forecast At 200,000T
Guinea-Bissau is expected to export 200,000 tons of cashew nuts, according to a forecast
from the Ministry of Trade. The official forecast is based on the tonnage exported in 2014,
around 136,000 tons, and an additional 20,000 tons that were intercepted in the port of
Bissau for illegal export and more than 70,000 tons that were seized along the northern
border with Senegal. However 4-constraints were noted including poor access roads for
selling cashew nuts, high export taxes, the exchange of cashew nuts for low quality rice,
disrespecting parity in trading and poor monitoring.
[Macauhub/GW 07/01/15]
Nigeria
NEPC To Train Farmers In Shea Butter Production
The Nigerian Export Promotion Council [NEPC] will train 600 farmers in quality Shea butter
production to enhance its export value. The council is also trying to increase the quality of
exported products and has seen positive growth in exports to the United Kingdom, USA,
and other European countries.
[This Day 01/01/15]
4
COMMODITY NEWS
CASSAVA
Cameroon
10-Processing Units In Development
Ten cassava processing units are in development in the Northwest of Cameroon. In all 2-million high-yielding cuttings are to be planted over 300ha.
The move will create added value and guarantee revenues from production. The move is financed by the African Development Bank [AfDB] Bank with
a budget of 19 billion Cfa francs.
[Ecofin 23/01/15]
Kenya
Cassava Plant For Teso South
East African Agricultural Productivity Project [EAAPP] plans to construct a cassava processing plant in Simba Chai area of Teso South sub-county.
The facility which will cost Sh10 million is expected to serve 15,000 farmers in Busia and neighbouring Bungoma and Siaya counties. The ground
breaking will be held next month.
[Standard Digital 02/01/15]
Cassava Virus Alert
The cassava brown streak disease [CBD] has affected more than 50% of the Kenyan cassava crop according to the Food and Agriculture
Organisation. Several African countries have been affected by the fast-spreading cassava mosaic virus. West African countries have managed to
contain the disease, which has ravished hundreds of acres in other parts of the continent.
[The Star 05/01/15]
5
COMMODITY NEWS
COCOA
General
ICE To Launch Euro Cocoa Contract
Intercontinental Exchange [ICE] has announced the launch of a new euro-denominated cocoa
contract ahead of rival CME Group’s entry into the market. The new contract adds to ICE’s
existing contracts - the dollar-denominated cocoa contract traded in New York, and a London
contract traded in pounds. It comes as CME is preparing to enter cocoa trading with a contract
in Europe. The New York market is favoured by hedge funds and other financial investors while
the London contract has been used by physical traders to hedge their positions as they trade
their cocoa from west Africa to importing countries.
The ICE launch, scheduled for April 2015, is seen as a pre-emptive move to head off any
movement by cocoa traders to the CME when it launches its new cocoa contract. CME officials
said in June last year that it was preparing to launch a Europe-based cocoa contract, although
no details have been released. Europe is the largest consumer of chocolate and confectionery,
and a euro-denominated cocoa contract may attract hedging from traders and manufacturers
looking to hedge their positions. The large processors, such as Cargill, Barry Callebaut and
ADM are understood to be supportive of the new contract as it will help reduce currency
hedging costs.
The CFA franc, which is the currency of Ivory Coast, the leading cocoa producer, is also pegged
to the euro. A euro-based contract will also enable processors operating in euro zone to reduce
their foreign exchange risk. But the problem is that Ivory Coast will have sold forward much of its 2015/16 crop by the time the new futures are
launched. These forward sales will have largely been hedged in sterling. Traders say the volumes may not support 3-contracts in Europe.
[Trading Exchange 06/01/15]
6
COMMODITY NEWS
COCOA
Lindt Predicts Price Decline By H2 2015
According to Lindt & Spruengli AG cocoa prices will decline by H2 2015 noting the harvest outlook is good. Lindt notes
consumption will not rise as fast as some expect. Although demand in China and India is coming the countries have such small
consumption that it will not have an influence yet. Lindt is expecting a growth rate of 6-% this year, excluding its acquisition of
Russell Stover Candies Inc. The world’s largest producer of premium chocolate reported a surge in full-year sales after Russell
Stover gave it access to more U.S. consumers. The stock rose to an all-time high. The Kilchberg, Switzerland-based chocolatier
spends millions of francs every year to support 20,000 farmers in Ghana with training, equipment and education with the goal of
doubling productivity. With these programs, production will substantially increase in the near-term.
[Swiss Info 13/01/15]
Europe Grind 2.8% Lower In Q4 On Sluggish Economy
Cocoa processing in Europe, the biggest consuming region, dropped 2.8% in Q4 as a sluggish economy weighed on demand.
Grindings fell to 338,738 MT in the 3-months ended Dec. 31 from 348,406 MT a year earlier. That follows a 1.1% drop in Q3. The
European Central Bank will consider expanding stimulus measures at a meeting later this month in an attempt to revive growth
and stave off a deflationary spiral in the euro area. Consumer prices in the region fell in December for the first time in more than
5-years amid a weak economic environment and falling oil prices. While consumption improved in North America, the European
economic climate was sluggish. Cocoa for March delivery was about £34/MT more than the May contract in London. An inverted
market makes it costly to carry stocks, suggesting factories may be more inclined to limit grindings.
[Bloomberg 13/01/15]
Europe Cocoa Processing At 9-Year Low As Factories Migrate
A gauge of chocolate demand in Europe fell in Q4 to the lowest
for the period since 2005 as the region’s economy struggles
and processing capacity shifts to producing countries. Cocoa
grinding fell 7.4% in the 3-months ended Dec. 31 from a year
earlier according to the European Cocoa Association. Grindings
were 323,061 tons compared with 348,963 tons a year earlier.
The World Bank cut its forecast for global growth in 2015, as
an improving U.S. economy and low fuel prices failed to offset
disappointing results from Europe to China.
While economic woes are weighing on demand, the drop in
grindings also reflected the transfer of processing capacity to
West Africa and Indonesia, the main cocoa producers. Bean
processing generates butter, which accounts for as much as
20% of a chocolate bar’s weight, and powder, used in ice
cream, cereals and cookies. The so-called combined ratio, a
measure of grinders’ profitability, fell 10% in Europe in Q4 from
the same period in 2013. Cocoa grinder Euromar Commodities
GmbH said in October it would close its Fehrbellin factory
outside of Berlin for 3-weeks over Christmas.
Ivory Coast, the world’s top cocoa producer, is set to become
the biggest grinder of the beans this year, surpassing the
Netherlands, according to the International Cocoa Organization.
Factories there processed just 10,000 tons less than the
Netherlands in 2013-14, compared with a gap of almost
180,000 tons in 2010-11, according to ICCO estimates.
Grindings in Indonesia, the third-biggest producer, increased
by almost 70% from 2010-11 to 2013-14, ICCO data showed,
as companies such as Olam International Ltd and Cargill Inc.
have set up new plants. Lindt & Spruengli AG [LISP] noted that
chocolate consumption would not rise as fast as expected by
some, as Asian demand is as yet too small to have an influence
on the global outlook. And anticipated that cocoa prices would
fall by the H2 2015.
[Bloomberg 15/01/15]
7
Asia Processing Declines 17% As Global Demand Shrinks
Cocoa processing in Asia dropped in Q4 as slowing global growth and a surge in prices to a 3-year high in September reduced
demand for the beans used to make chocolate. The grind, an indication of consumption, declined 17% to 141,396MT from
170,684 tons a year earlier, the Singapore-based Cocoa Association of Asia noted. Full-year grindings fell 3.9% to 614,461
tons from 639,505 tons in 2013. The data are for Malaysia, and members in Singapore and Indonesia. Grinding also declined in
Europe, North America and Brazil, separate industry reports showed this month. Slowing global economies are crimping demand
as consumers look for ways to cut disposable spending after chocolate costs increased.
Cocoa futures touched a 3-year high in September amid concern that the deadly Ebola disease would disrupt shipments from
West Africa, which produces 70% of global supply. Prices have since fallen 19% as exports continued to flow from Ivory Coast
and Ghana, the top growers. The demand for chocolate is down because prices are quite high. Futures surged 38% in the
previous 3-years as Asian consumers led global demand growth, eroding inventories. The gains prompted chocolate makers
including Hershey Co. to boost prices in 2014 to cover ingredient costs. Prices are likely to fall to US$2,650 by the end of the
year. Meanwhile cocoa butter has surged 38% since the end of 2010. The higher prices may prompt some confection makers to
use more substitutes, including alternative fats.
[Bloomberg 23/01/15]
Harmattan Winds Hit West African Output
The worst Harmattan winds to hit Africa’s
top cocoa producers in several years may
lower light-crop output, farmers, exporters
and analysts said, dimming hopes that
they can make up ground after a slow start
to the season. The dry seasonal winds
began to blow down from the Sahara last
month, blanketing much of West Africa’s
cocoa-growing regions. The impact was
visible in the world’s top 2-producers, Ivory
Coast and Ghana, but farmers in Nigeria
and Cameroon said their light crop - which
typically produces smaller, lower-quality
beans - had not been affected.
Ivorian farmers said the Harmattan had hindered development of the April-to-September mid-crop. Cocoa arrivals at Ivorian ports
were around 11% lower than last season’s bumper crop. Some exporters thought the Harmattan might simply reduce bean size.
Others, however, predicted output losses. The 2014/15 forecast was an overall decrease in the harvest size in Ivory Coast of
15-20%, but with the Harmattan that drop will be bigger. In Ghana, where cocoa purchases were down nearly 23% by December
25 according to industry regulator Cocobod, farmers and buyers said the Harmattan could trim output by 20,000-50,000 tonnes.
Cocobod will conduct a field assessment of the Harmattan’s impact in February, before deciding whether to revise the Ghanaian
production target of 850,000 tonnes of beans. The Cocoa Association of Nigeria said the winds were not expected to impact
output in Africa’s No 3 producer. In Cameroon, farmers said trees had so far resisted the harsh conditions.
[Business Recorder 20/01/15]
Noble Group Winding Down Cocoa Operations
Commodities trading house Noble Group is rumoured to be winding down its cocoa operations allowing its joint venture [JV] with
China’s COFCO to focus on larger agricultural markets such as grains. The Hong Kong-based commodities trader is expected
to have liquidated its cocoa trading book by June at the latest. Noble declined to comment. Noble has reportedly struck a deal
to offload some of its cocoa pod counting and sustainability operations to cocoa trader and processor Transmar Group, and the
U.S.-based company would also help wind down Noble’s trading book.
The planned exit from cocoa is the first major change since Chinese state-grains trader COFCO paid US$1.5 billion for a 51%
stake in Noble’s loss-making agricultural division in April last year. The joint venture links COFCO’s grain and oilseed processing
and distribution business in China with Noble’s grain sourcing and trading arms. The joint venture also included sugar, coffee and
cotton as well as the cocoa operations. Noble’s cocoa business included exporting operations in the world’s top 2-growers Ivory
Coast and Ghana. The move follows the departure of Paul Davis, a veteran cocoa trader, who resigned as global head of cocoa
in October 2014.
[Reuters 19/01/15]
8
COMMODITY NEWS
COCOA
Cameroon
Bean Exports Rise 9.5% Yr/Yr By End December
Cameroon exported 115,951MT of cocoa beans in the season to end-December or 9.5% higher compared with the same period
last year, according to statistics from the National Cocoa and Coffee Board [NCCB]. Africa’s 4th biggest cocoa producer shipped
42,668 MT in the month of December compared with 29,198 MT the previous month. Cameroon had exported 25,848 MT in
December 2013. Output hit a record of 240,000 MT in the 2010/11 season but has been slipping steadily due to a prolonged dry
season and attacks by pests and black pod diseases. Output fell sharply to 209,905 MT in 2013/14.
[Reuters 22/01/15]
Cocoa Bean Prices Rise
Cocoa prices have exponentially increased in recent weeks in Cameroon, with the kilogram rising from 1,000 CFA francs to 1,250
CFA francs, an increase of 25% compared to the prices at the end the year. According to the National Cocoa and Coffee Board
[ONCC], the general situation is improving in production areas in January 2015 compared to prices in effect until December 2014.
The price increase of beans is due to better accessibility to production areas as access roads have been upgraded. This has led
to competition among buyers. Also the quality of the beans has improved since the beginning of the campaign in August 2014
thanks to a national awareness campaign on better maintenance of the cocoa pods during drying as well as fermentation.
[Star Africa 19/01/15]
Côte d’Ivoire
Stricter Controls Cause Bottleneck In Ports
Stricter government controls at Ivory Coast ports have doubled the time needed to clear cocoa beans and products for shipping,
finished cocoa products have piled up in warehouses in Abidjan and San Pedro. Exporters have noted all the export warehouses
at the ports are full of cocoa with around 100,000 tonnes in San Pedro alone and the cocoa is continuing to arrive. While cocoa
shipments are going out daily, companies have been unable to clear a backlog created when authorities introduced tighter
controls at the start of the season in October.
In previous seasons, cocoa delivered from plantations typically waited at port warehouses between 5-7 days for inspections and
paperwork. That wait has now increased to between 10-15 days. Exporters blame measures put in place this season to combat
fraud by transit companies, which are meant to pay taxes and customs fees on behalf of exporters but, according to authorities,
often fail to do so.
Exporters said officials in the ports now wait for cheques to clear before issuing shipment certificates. A number of exporters
noted delays have disrupted their shipping cycles, causing them to miss loading windows for vessels and forcing them to pay
penalties. Warehousing costs are also accumulating.
[Reuters 21/01/15]
9
Puratos Inaugurates Plant
Puratos has inaugurated a cocoa collection and fermentation plant in San Pedro created in partnership with French chocolate
maker Cémoi. The official opening ceremony took place on the site near Adjamené. The move is in line with CEMOI’s
sustainability vision to promote a traceable, cocoa.
[Perishable News 02/01/15]
Arrivals At 1,045,000T By Jan. 25
Cocoa arrivals reached 1,045,000T by Jan. 25 since the start of the season on Oct. 1, down from 1,067,000T in the same period
of the previous season. Exporters estimated around 50,000T of beans were delivered to Abidjan and San Pedro between Jan. 19
and 25, up from 32,000T during the same period last year.
[Reuters 26/01/15]
Ghana
Cocoa Board To Cut Crop Forecast On Dry Winds
Ghana is expecting an output of 820,000MT of cocoa this season as the hot, dry Harmattan winds reduce the potential crop by
as much as 9% from assessments made in November. As recently as October the Ghana Cocoa Board [GBC] said the crop in
the season that will end on Sept. 30 would exceed 1 million tons. The main crop season, which lasts from October to May, will
see 780,000MT being reaped while the so-called light crop, harvested between June and August, will yield 40,000MT. So far
this season purchases from farmers by the board are about 10% lower than last year. The country reaped about 920,000MT last
season. In addition to cutting rainfall the Harmattan can cause cocoa trees to lose many of the flowers that turn into pods. Last
month central and northern areas of Ghana got as little as 10% of normal rainfall for this time of year, while Nigeria saw 20-30%
of its average.
[Bloomberg 07/01/15]
Touton Sets Up Cocoa Processing Factory
Cocoa Touton Processing Company Limited [CTPC], a subsidiary of Touton S.A. of France has signed a bean supply agreement
with Ghana Cocoa Board [COCOBOD] to process cocoa beans locally. The CTPC, which is located in the free zones enclave is
expected to commence operations in April, 2015 with an initial capacity of 25,000T, and eventually expand to about 50,000T over
the next 3-years. In addition, CTPC is embarking on a programme dubbed Reducing Emissions from Deforestation and Forest
Degradation [REDD+] which aims to protect the forest in the Western Region of Ghana and increase sustainable certified cocoa
production.
[Ghanaweb 26/01/15]
10
COMMODITY NEWS
COCOA
Nigeria
Processors Groan Under Huge Debts
Nigeria’s Cocoa processor companies are paying the price for their un-serviced loans and high input costs, with cost eroding
sales. Many of them are burdened with un-serviced debts estimated collectively at about N40 billion [US$241 million] according
to the Cocoa Processors Association of Nigeria [COPAN]. This may also prevent new credit lines from banks. Analysts agree the
huge costs and debt in the capital structure of these companies is crimping their operations. Meanwhile, the costs of exporting
products to Europe have gone up by 30%. Industry players say this culminated in loss of direct revenue to the local processing
industry.
[Business Day 12/01/15]
Mid-Crop Cocoa Threatened By Prolonged Dry Winds
The Cocoa Farmers Association of Nigeria has noted mid-crop cocoa output is threatened by the Harmattan that have
evaporated moisture and caused buds to break off trees. The winds have persisted for 1-month unbroken by rainfall, increasing
the adverse effects on cocoa trees with an average of 6 buds rather than the usual 12-15 buds. The last rains in the southwest
belt that accounts for about 70% of Nigeria’s production were recorded in November. For the surviving trees, the quality of yield
declines, resulting in cocoa pods with underweight beans. Nigeria has set a target to produce at least 500,000T of cocoa by the
end of the season running through September 2015. Nigeria produced 350,000T of cocoa in the 2013-2014 season.
[Bloomberg 16/01/15]
Togo
Togo To Resume Cocoa And Coffee Production
In a move to renew plantations and increase cocoa production to 25,000MT/pa and coffee to 20,000MT within 3-years the
Togolese Minister of Agriculture, Colonel Ouro-Koura Agadaz, formally handed over 70,000 cocoa pods and 445,000 coffee
cuttings to local producers. The Agriculture Sector Support Project [PASA] is one of the components of the 5-year National
Program for Investment in Agriculture and Food Security [PNIASA]. The move will also strengthen the economy and generate
funds to producers. In 2014, only 15,000 cocoa pods were distributed to farmers. Ghana has helped the state by providing
50,000 pods. Since 2010, Togolese cocoa production is between 11,000-13,000T/pa. Togo is the 8th producer in the world and
cocoa is the 3rd export product after phosphate and cotton.
[Med Africa 12/01/15]
11
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 Jan 15
2051.17
2971.75
1963.33
2930.67
5 Jan 15
2073.98
2973.07
1984.33
2927.67
6 Jan 15
2047.16
2933.67
1970.00
2882.00
7 Jan 15
2061.63
2946.87
1988.67
2900.00
8 Jan 15
2107.24
3005.38
2018.00
2965.00
9 Jan 15
2091.46
2989.09
2009.00
2938.67
12 Jan 15
2116.72
3024.03
2026.67
2980.00
13 Jan 15
2112.49
3018.58
2023.00
2973.33
14 Jan 15
2117.62
3026.85
2023.33
2976.00
15 Jan 15
2108.43
3009.87
2020.00
2962.67
16 Jan 15
2096.70
2982.59
2007.33
2931.00
19 Jan 15
2095.50
2980.89
2010.33
2923.67
20 Jan 15
2090.75
2968.84
1996.00
2916.33
21 Jan 15
2045.95
2906.19
1965.33
2844.33
22 Jan 15
2010.16
2860.76
1944.33
2799.67
23 Jan 15
2012.30
2819.72
1921.00
2759.00
26 Jan 15
1996.21
2802.32
1903.67
2737.33
27 Jan 15
2000.16
2813.83
1897.67
2747.67
28 Jan 15
1974.14
2787.03
1885.00
2718.00
12
COMMODITY NEWS
COFFEE
Cameroon
Robusta Exports At 698T In December
National Cocoa and Coffee Board [NCCB] statistics show Cameroon exported 698T of robusta coffee in December, the first
month of the 2014/15 season, a sharp increase from 236T in the same month of the previous season. There were 6-exporters for
the month. Nealiko Enterprises exported the most with 284T, followed by Nestle Cameroun [180T] and Polis Agro Cam [27T]. No
arabica coffee was exported from the country during the month. Cameroon’s total exports since the start of the 2014/15 season,
which started prior to the robusta season on Oct. 1, remain at 249T. Cameroon is one of the few countries in Africa that grows
both robusta and arabica coffee. The robusta coffee season runs from Dec. 1 to Nov. 30 and the arabica coffee season runs
from Oct. 1 to Sept. 30. The country exported 19,704Tof robusta coffee in the 2013/14 season, up from 14,725T in the previous
season, and 2,175T of arabica coffee in 2013/14, a slight drop from 2,522T in 2012/13.
[Reuters 23/01/15]
13
Kenya
Earnings Jump 17% In 2013/14 Crop Year
Kenya’s earnings from exports of its coffee rose 17% to US$254.2 million during the 2013/14 [Oct-Sept] crop season due to
improved production and higher prices. The nation is a relatively small coffee grower compared with other producers, but its
speciality beans are known for their quality, attracting demand from roasters. Kenya’s Coffee Directorate said farmers benefited
from subsidised fertiliser from the government during the period, helping them to raise production by 25% to 49,475 MT. Kenyan
growers also benefited from better prices after the average auction price of the commodity increased to US$212.7/50-kg bag in
2013/14 from US$166.7 a year earlier.
Uncertainty about the crop in leading producer Brazil after a long drought helped prop up global prices of coffee in 2014. Brazil
grows about 40% of the world’s arabica beans. Kenya secured 4-new export markets for its coffee in the 2013/14 season.
Besides traditional European and USA markets, other non-traditional markets expanded to Turkey, Bulgaria, Seychelles and
Zambia with Zambia mainly absorbing roasted coffee. Kenya is expected to produce 45,000 MT of coffee in 2014/15, fetching
US$150 million from an estimated average price of US$200 per bag.
[Reuters 08/01/15]
Boosting Exports With Branding Initiative
Kenya has launched a coffee branding initiative designed to boost the country’s reputation for producing high-quality beans and
help the industry regain its position as a top foreign exchange earner. Under a scheme set out by the government, bulk coffee
sold to roasters will be branded “Coffee Kenya Mark of Origin” by producers and traders, with the Kenya Coffee Directorate
policing the system and ensuring the beans are from the country. The government wants to add value to exports through
initiatives such as branding, widening the appeal of Kenyan coffee with consumers and following similar schemes used by other
producers.
Coffee exports, worth US$254 million in the 2013/14 season which runs October to September, are Kenya’s 4th-biggest foreign
exchange earner after tourism, tea and horticulture. In the 1980s, the sector was the leading earner accounting for 40% of foreign
exchange. But output plummeted as farmers said political corruption meant they were not paid and many switched crops or sold
fields for real estate development. Output was 49,475T in 2013/14, down from a peak of 130,000T in 1988/89, although Kenya’s
high-grade beans are still appreciated by roasters who often blend them with lower-quality beans from other growers.
[Africa Report 14/01/15]
Government Raises Concern Over Coffee Industry
The government has expressed concerns that the country may lose their privileged position in the world’s coffee market because
production levels are predicted to drop. Currently, Kenya is producing in the region of 50,000MT per year – a sharp decline from
the nation’s peak of 130,000 tonnes which was achieved in the late 1980s accounting for about 40% of Kenya’s export revenue.
Climatic challenges are seen as one of the main reasons for this drop, but, worryingly, so is amount of prime coffee growing land
that has been lost to other industries. According to the Agriculture Fisheries and Food Authority, the past decade has seen the
coffee industry lose 60,000 ha of arable land. For example Kiambu, Murang’a and Nyeri regions are under threat by advancing
new-build construction projects, while elsewhere in the country plots are being transformed into grazing fields for livestock. But
with exports slipping and the government sounding warnings, national decision makers are launching programmes in order to
boost the sector. During the 2013-14 season farmers were able to harvest some 825,000 bags of coffee, weighing in at just over
49,000 MT, which brought in some KSh 19 billion.
[Coffee Press 19/01/15]
14
COMMODITY NEWS
COFFEE
Tanzania
Arabica Prices Rise As Auctions Resume
Average arabica prices in Tanzania, Africa’s 4th-biggest coffee producer, edged higher at the first auction of the year, buoyed
by strong demand from exporters. The Tanzania Coffee Board [TCB] noted the average price for top grade arabica coffee was
US$192.01 per bag up from US$185.29 previously. Overall average prices at the Moshi exchange were up by US$7.92/50 kg for
mild arabica compared to the last auction. The TCB said 12,127 bags were offered at the latest sale compared with 17,046 bags
offered at the last auction in December. The regulator resumed the weekly auctions last week after suspending trading on Dec.
18 for the Christmas and New Year holidays. The next auction will be held on Jan. 29.
[Reuters 20/01/15]
Grade
Amount
Sold
Low
High
Average
Arabica AA
3,782
3,782
165.00
229.60
192.01
Arabica A
1,911
1,900
165.00
190.00
185.19
Arabica AB
1,703
1,703
171.80
207.00
194.45
Arabica B
1,806
1,633
165.20
190.00
183.67
Arabica PB
1,289
1,165
158.80
198.80
186.99
Arabica C
805
768
155.00
186.00
186.00
Robusta Organic
309
309
97.80
98.00
98.00
Robusta Screen 18
233
233
104.20
104.20
104.20
Robusta Superior
21
21
95.00
95.00
95.00
Robusta FAQ
43
43
83.60
83.60
83.60
Kagera Needs 67 Million Coffee Plants To Boost Production
Kagera Region needs to plant about 67 million new Arabica coffee plants in place of the current poorly cultivated ones for farmers
to gain good yields. The Maruku Agricultural Research Institute [ARI] has set aside about 100,000 new coffee stems to facilitate
the move, that are waiting to be collected by farmers ready for the farming season between March and April. Poor extension
services coupled with outdated application of techniques are some of the reasons behind the current trend and this appears to
demoralize farmers from improving the crop. Current coffee production stands at 20,000-30,000 tonnes a year.
[Daily News 23/01/15]
15
Uganda
Exports Down 13% Yr/Yr In December
Uganda’s coffee exports fell 13% to 224,803 60-kg bags in December compared with the
same month a year ago according to Uganda Coffee Development Authority [UCDA]. No
reason was given for the fall but an industry source said rains in parts of the central region
disrupted harvesting and transportation from rural areas. UCDA forecast Uganda would
export 230,000 bags this month from 391,514 bags in same period last year, without
elaborating on the reasons for the decline.
[Reuters 22/01/15]
16
COMMODITY NEWS
COTTON, TEXTILES &
LEATHER GOODS
Burkina Faso
2014/15 Cotton Harvest Seen Just Under 700,000T
Burkina Faso expects a cotton harvest of just under 700,000T during the 2014/15 season, up from the last year’s 650,000T but
revised down from an initial target. The figure is about 100,000T below a target set last year for the 2014/15 harvest due to poor
rains at the beginning of the season. SOFITEX, the country’s biggest cotton firm, will account for around 80% of the harvest,
producing 540,000T. SOCOMA and Faso Coton will produce 90,000T and 50,000T respectively. Cotton is the second-biggest
source of revenue after gold.
[Reuters 27/01/15]
2014/2015 Marketing Year Sees Production At 540,000T
Cotton production in the 2014/2015 marketing year is expected to reach 540,000T according to the Society Of Fibres and
Textiles [SOFITEX], the main ginning company, representing an increase of 6.2% over the previous year.
[Ecofin 21/01/15]
Kenya
Measures Introduced To Increase Output To 140,000 Bales
They Government is currently putting in place measure to increase production in order to meet local demand which stands
at 140,000 bales. One key challenge is the lack of access to certified seed. The Kenya Agriculture and Livestock Research
Organization is to begin breeding high yielding varieties to increase output. Kenya’s average yield is 572kg/ha against an
international average of 800kg/ha. The government is also promoting irrigation schemes. Production stood at 30,000 bales in
2014 an increase from 22,000 bales in 2013 a year impacted by drought.
[Yarns & Fibres 17/01/15]
Kenya To Establish Leather City To Spur Industrialization
The Kenyan government has announced plans to establish a
Leather City, a fully-fledged product development facility in Athi
River, a town outside capital Nairobi, that will be the first of its kind
in the region. The industrial park will be set on 500 acres of land
which the government is optimistic could generate 10 times the
current value of exported raw leather to about US$1.09 billion in 18
months.
The move is in line with government policies to move the country
from an exporter of raw and semi-processed hides and skins to
finished leather goods. The City will feature an effluent treatment
plant that is a critical enabler in the tanning of hides and skins,
as well as carefully master-planned integrated leather and leather
goods production facilities. The project will be fully funded by the
private sector. The ground-breaking is slated for February.
In the past Kenya established measures to prop up the leather
industry, such as increasing export duty on raw hides and skins
as well as budget allocations for development of tanneries in rural
areas. The park will house tanneries, a training center, common
manufacturing facilities, chemical storage and distribution units,
leather goods’ accessories production units and a Common
Effluent Treatment Plant [ETP]. The initial phase will target at least
15 tanneries, each with a production capacity of 10 tonnes of raw
hides and skins per day and at least 10,000 pairs per day each of
shoes, hand bags, leather garments and industrial gloves.
[Coastweek 20/01/15]
17
Mali
Targets 800,000T Per Year By 2018 As Output Jumps
Mali plans to produce 800,000T of unginned cotton per year by 2018 after output surged by more than 25% in the 2014/15
season on the back of improved farm inputs. According to state-owned textile development firm CMDT final production figures
for the season stood at 552,000T, compared with 440,000T the previous season. The government increased input subsidies and
lowered the price of fertilizers. Mali, Africa’s 3rd biggest gold producer behind South Africa and Ghana, also counts cotton as
one of its main exports. Mali is expecting to produce 650,000T in the 2015-2016 season, 725,000T in 2016-2017, and 800,000T
in 2017-2018, according to CMDT’s 5-year development plan. Mali plans to invest between 60-70 billion CFA francs [US$122
million] per year to achieve its targets. The measures include lower farm input prices, improving soil fertility, motivating farmers
with favourable farmgate prices and immediate cash payments after harvest.
[Mail Online 22/0/1/15]
Mozambique
Niassa Company Sells US$8 Million In Cotton
Sociedade Algodoeira de Niassa [SAN] the only cotton company in Mozambique’s Niassa province, in 2014 posted turnover of
US$8 million in the last cotton campaign from the sale of 5,600 tons of raw cotton and 7,000 tons of seeds. Last year cotton
campaign exceeded production targets of 12,000T compared to actual production of 15,000T. The raw cotton was purchased by
customers based in China, India and Bangladesh. SAN’s entire cottonseed production was bought by a single company based in
Malawi.
[Macauhub/MZ 13/01/15]
Nigeria
Cotton Fetches Lower Price In Global Market
Cotton from Nigeria is sold at lower prices in the international market, compared to the price of cotton from Burkina Faso, China,
and India is it does not produce Biotechnology [BT] cotton. This is due to the non-passage of the bio-safety bill which would
allow cotton producers to purchase and cultivate BT cotton in Nigeria.
Speaking at a Cotton Value Chain stakeholders’ forum held in Abuja last month, Hamma Ali Kwajaffa, president of the National
Cotton Association of Nigeria [NACOTAN], said BT cotton which is significantly cheaper to produce, commands higher prices in
the global market. The use of BT cotton would increase the quality and quantity of cotton output in Nigeria, reduce the spraying
of insecticides, and thereby, reduce cost of production. Nigerian farmers get less than 1T/ha against BT cotton that provides
4T/ha. Nigeria’s cotton is currently discounted in the international market and sold for an equivalent of N80,000/T, whereas BT
cotton is sold for N200,000-300,000/T.
[Fibre2 Fashion 07/01/15]
18
COMMODITY NEWS
FISH
Sao Tome & Principe
European Parliament Approves Fisheries Agreement
Members of the European Parliament signed a new fisheries agreement between the European
Union and Sao Tome and Principe, authorising 34 vessels from Spain, France and Portugal to fish
in the country’s waters. The new partnership agreement protocol provides fishing opportunities for
28-tuna seiners and 6-fishing vessels for surface trolling. The protocol aims to promote a policy of
sustainable fisheries, providing for a financial contribution of over €2.8 million for 4-years.
[Macauhub/ST 14/01/15]
19
COMMODITY NEWS
FOODSTUFFS & BEVERAGES
Benin
Import Embargo On Poultry From Nigeria
The Ministry of Agriculture announced a ban on the import, distribution and transit of all poultry and
products from Nigeria to protect the country of bird flu currently plagued by Nigeria. But many analysts are
questioning the ability of Benin to enforce this ban, given the porosity of borders between the 2-countries.
Nigeria announced a few days ago the appearance of the H5 virus indicating that 5-states were affected
by the disease.
[Ecofin 24/01/15]
Ethiopia
Heineken Inaugurates Largest Brewery In The Country
Heineken has recently launched a €110 million plant in Kilonto, Ethiopia with a production capacity of 1.5
million hectolitres making it the largest brewery in the country. The plant will produce Barnard and Harar
brands along with a new brand Walia. The facility will allow the company to better position itself in the local
market more than doubling capacity.
[Ecofin 19/01/15]
Gambia
Government To Licence Dealers In Basic Food Commodities
The Gambia government is to introduce a new measure that will licence or authorise importers, distributors
as well as major and minor retailers of essential food commodities in the country. The measure is
expected to kick-in next month. The move is meant to ensure a fairer and honest pricing of essential food
commodities in the country. All importers, distributors or retailers will need a licence from the Ministry.
[Daily Observer 14/01/15]
Madagascar
Chezda Cyclone Destroys 25% Of Rice Production
The passage of typhoon Chedza across Madagascar has affected rice production by at least 25%.
Fortunately stocks made through the production of the previous year will fill the gap. Madagascar is
expected to achieve a good level of rice in this campaign but is now expected to rely on some grain
imports.
[Ecofin 23/01/15]
Morocco
To Export 100,000T Less Citrus Fruits Than Projected
The citrus sub-sector In Morocco is experiencing problems with weather and disease. Exports are
expected to fall below 500,000T at the end of the current campaign, a decrease of 100,000T over initial
estimates. Projections were made at 600,000T. Moreover, the Russian market which traditionally buys
60% of the production will absorb less citrus this year due to current difficulties in the Ruble. In January,
the Kingdom exported 217,000T of citrus fruits, against 300,000T a year earlier. Russia remains top with
94,000T followed by the Union European [47,000T], USA [35,000T] and Canada [25,000T].
[Ecofin 20/01/15]
20
COMMODITY NEWS
FOODSTUFFS & BEVERAGES
Senegal
Onion Sector Self-Sufficient By 2016
The Senegalese onion sector wants to achieve self-sufficiency by
2016. The goal is to produce at least 350,000T within 2-years. A
development plan has seen production from 90,000T in 2001 to
290,000T in 2014. Senegal expects a record campaign in 2015 with
a harvest of 400,000T. Producers have asked the Government to
ban imports of the bulb this year.
[Ecofin 23/01/15]
21
COMMODITY NEWS
PALM OIL & EDIBLE OILS
General
European Commission Clears Sime Darby To Buy New Britain Palm Oil
The European Commission cleared the acquisition of New Britain Palm Oil Ltd by Malaysia’s Sime Darby Plantation Sdn Bhd,
saying the deal doesn’t give it concerns about competition. Both companies are active in the plantation, production and
processing of palm oil.
[Alliance News 27/01/15]
Palm Trader Delivers On Sustainability Pledge
Wilmar International, the biggest palm oil trader in the world, has set up a website that reveals its supply chain and allows anyone
to report violations of its recent sustainability pledge. It is also working closely with The Forest Trust, a third party that monitors
corporations and helps them deliver on sustainability promises. The vast majority of palm oil traders have said that they will no
longer buy from those who exploit forests.
[Grist 22/01/15]
Cameroon
To Boost Palm-Oil Production 26% In 3-Years
Cameroon, Africa’s third-biggest palm-oil producer, plans to start using higher-yielding seeds to help raise production by 26%
over the next 3-years. The new seeds will be planted over an additional 30,000 ha and are expected to boost production to
290,000 MT/pa compared with 230,000 tons now. About 10,000ha of additional plantations will be planted each year. The
seeds will be produced by the Institute of Agricultural Research for Development [IRAD]and distributed for free to farmers. An
agreement between the Ministry of Agriculture and Rural Development, MINADER and IRAD was signed on 16/01/15. MINADER
will disburse FCFA 495 million to help IRAD revamp its structures and produce palm oil seeds. Cameroon’s demand for palm oil,
used in products from noodles to biofuels, is estimated at 325,000MT. It presently has 160,000 ha of palm-oil plantations. By
2020 government will limit the importation of oil palm.
[Bloomberg 19/01/15]
Liberia
Equatorial Palm Oil Secures Development Loan
Equatorial Palm Oil PLC has secured a US$20.5 million loan for its 50/50 joint venture company Liberian Palm Developments
Ltd. The AIM-listed palm oil development and production company with operations in Liberia, noted the loan agreement is with
KLK Agro Plantations Pte Ltd, a subsidiary of Kuala Lumpur Kepong Berhad. KL Kepong holds a 62.86% stake in Equatorial
Palm Oil and also holds the remaining 50% interest in the joint venture firm Liberian Palm Developments. The loan has a term of
5-years, and Equatorial Palm Oil said it will be used to develop its oil palm estates in Liberia.
[Alliance News 27/01/15]
22
COMMODITY NEWS
PALM OIL & EDIBLE OILS
Nigeria
Dufil’s Backward Integration In Palm Oil Sector
In its effort to boost the local production of Palm Oil, Dufil Prima Foods Plc has acquired and signed a Memorandum of Understanding [MoU] with
the Edo State government for 60,000 ha for cultivation of palm to boost local production. Dufil has embarked on strategic backward integration to
ensure 100 per cent local content in most of the products being produced by the company. This has led to investments worth billions of naira in the
Nigerian economy in the last 10 years. These include the establishment of a seasoning plant, the establishment of flour mills, the establishment of
oil refinery and the establishment of a palm tree plantation under the Edo State Government Agribusiness revolution scheme.
Nigeria’s palm oil production is estimated at 55% of African output making it the largest producer of palm oil in Africa. However Nigeria has lost
its dominant position in the international trade after 1980s and is currently the 5th largest producer, behind Indonesia [51%] and Malaysia [34%] in
2013/14. Its output represented only 1.57% of the world production in 2013/14.
Due to the constant shortage of palm oil for both domestic consumption and industrial usage, major companies like Dufil and PZ Wilmar are
investing heavily in the cultivation of palm tree plantations that will revolutionize the palm oil industry in Nigeria. A combination of the above will help
the Government transformation agenda to achieve its 300,000 ha for agribusiness in palm oil sector.
[This Day 18/01/15]
23
COMMODITY NEWS
RUBBER
Côte d’Ivoire
Exceeds 2014 Rubber Forecast
According to the Association des Professionnels et Manufacturiers de Caoutchouc [APROMAC], Ivory Coast’s natural rubber output for 2014
reached 311,429T exceeding a forecast of 296,456T. But lower prices for farmers and harsh Harmattan winds could dent 2015 output. Ivory Coast,
the world’s top cocoa grower, is also Africa’s leading natural rubber exporter. It produced 293,293T of rubber in 2013 due to new plantations that
entered production APROMAC expects output of 326,101T in 2015.
While Asian producers including Indonesia, Thailand and Malaysia dominate world output, Ivorian farmers, frustrated by cocoa’s low returns, have
increasingly turned to rubber in recent years for the more stable income it provides. The farmgate price for rubber in Ivory Coast peaked at 942 CFA
francs/kg [US$1.68] in 2011. But a drop in world natural rubber prices, which tend to mirror oil prices, has since cooled farmer interest. Meanwhile,
a successful reform of the country’s cocoa sector has led to a progressive rise in prices paid to farmers over the past 3-seasons.
The Ivorian rubber farmgate price was at 386 CFA francs in January 2014 but fell to 281 CFA francs in December.
[Reuters 15/01/15]
24
COMMODITY NEWS
SUGAR
Angola
Bioenergy Company Produces 3,100 Tons Of Sugar
Companhia de Bioenergia de Angola [Biocom] produced 3,100T of sugar and 3,500 cu.m of ethanol in its experimental phase.
The project will be formally opened in Q1 2015, when it will and start producing 256,000T of sugar, 28,000 cu.m of ethanol and
235 MW of electricity from sugar cane bagasse. Located in the Capanda Cacuso Agro-Industrial Hub, Biocom is a partnership
between the Angolan State, through the National Agency for Private Investment [ANIP] and Sonangol Holding, with 20%, and the
Angolan group Damer and Brazil’s Odebrecht with 40% each.
[Macauhub/AO/BR 01/01/15]
Kenya
Import Safeguards Come To An End
Kenya’s sugar industry is under threat as the final extension of sugar import safeguards comes to an end. Kenya has exhausted
the reprieve limit set by Common Market for Eastern and Southern Africa [COMESA] which gives a market access at zero-rate
tariff to goods from member states. The sugar directorate officials have begun to lobby COMESA for another extension despite
exceeding the maximum allowable safeguard duration of 10 years. Kenya received a 1-year extension to delay duty-free sugar
imports from COMESA member states till the end of February 2015, after failing to guide the sector towards competitiveness
through privatisation and establishment of cane estates. Kenya plans to complete reforms in its sugar industry. However, stateowned sugar companies - Chemelil Sugar Company, Nzoia Sugar Company Ltd, South Nyanza Sugar Company Ltd, Muhoroni
Sugar Company Ltd and Miwani Sugar Company - are yet to be privatised.
Kenya wants to privatise all its sugar mills, infrastructure development and diversifying the millers into Ethanol distillation and
power co-generation before the expiry of the safeguards. The government applied for protection of the sector by way of a
safeguard under Article 61 of the COMESA Treaty in 2003 to run till 2008 so that sugar imports from COMESA are subject to
customs duties. Since then, the safeguards have been extended. Under the safeguard Kenya is allowed to limit the entry of
imported sugar to 350,000MT to meet the annual production deficit. Kenya produces 600,000MT annually but not enough for its
market. Potential demand is approximately 800,000MT leaving a net deficit to be filled by imports. It has been importing sugar
from COMESA countries as it is allowed to cap sugar imports from the 19 countries.
[CNBC 06/01/15]
25
Raw Sugar Production Expected To Rebound In 2015
Kenya’s raw sugar production is expected to rise 4% to 617,039MT in 2015, buoyed by extra factory capacity and improved
supply of cane. Kenya has an annual sugar deficit of around 200,000MT, which is usually filled by imports from other producers
in the region. The country is struggling to improve output due to relatively high production costs and loss-making sugar
factories. The Kenya Sugar Directorate said Kenya produced 591,658MT of sugar in 2014, a 1.4% drop from a record harvest of
600,179MT in 2013 attributed to closure of the mills and cane under-supply in Mumias zone.
Mumias sugar factory in western Kenya was closed for a period to allow its cane to mature and for maintenance. There was
also an unscheduled closure of Kibos sugar factory after its boiler broke down, as well as a scheduled shutdown of West Kenya
sugar Company for maintenance. A fourth miller, Soin Sugar Company was also shut for the entire second-half of 2014 to allow
for ongoing factory modernisation. Kenya has long had plans to privatise 5-sugar factories to reduce inefficiency. Privatisation
of the public owned mills is in progress and will provide a platform for the injection of much needed fresh capital to facilitate
modernization, expansion, value addition and diversification. The cost of producing a tonne of sugar at about US$570 in western
Kenya. The cost is US$240 to US$290 in producers such as Egypt.
[Reuters 21/0/11/5]
South Africa
Drought Closes KZN Sugar Mill
One of South Africa’s biggest sugar producers, Illovo Sugar, will close its Umzimkulu mill for the year-long 2015 milling season
starting in April. Illovo blames significantly below-average rainfall in KwaZulu-Natal during the 2014 milling season and frost during
the past winter which severely affected cane supplies for the forthcoming season. There are fears that next year’s crop is also
going to be affected, as the planting season has been delayed by the drought. Estimated cane supplies for the 2015/16 season
will fall by approximately 1 million tons [18%] compared against average deliveries in a normal season. Deliveries meant for
Umzimkulu will be diverted to Illovo’s Sezela mill for processing.
This past season was particularly unfavourable to the sugar sector with a combination of bad weather and a sugar industry
strike. Illovo took a further hit when cane production in Swaziland was also affected by weather and another industry strike. Total
group sugar production for the period dropped by 9% to 1.3 million tons with the contribution to operating profit derived from
sugar production declining from R847 million in 2013 to R692m last year. Meanwhile the KwaZulu-Natal Agricultural Union noted
that the drought-stricken KwaZulu-Natal province, where more than 80% of the country’s sugar is grown, has 6-weeks to get
sufficient rain for this year’s crop.
[Business Report 19/01/15]
26
COMMODITY NEWS
SUGAR
Swaziland
Production Expected To Grow 5% Over 3-Years
Production in Swaziland is projected to grow at an average annual rate of 5% to a record level exceeding 800,000T by 2018 and
2019 season according to the Swaziland Sugar Association [SSA]. The industry has been implementing measures to improve
productivity and efficiencies since the European Union [EU] sugar sector reformed in 2005. The EU has recently allocated €1.8
billion, most of which is targeted at Smallholder Sugarcane Growers [SSGs]. The EU centre for the Development of Enterprise
[CDE] also donated €1.2 million which has been spent on Fairtrade Certification for FSSC 2200 certification of one of the mills,
reviewing provision of extension services, development of environmental guidelines and building capacity at SSA.
[Swazi Observer 02/01/15]
Tanzania
Bulk Sugar Importation Scheme Delayed
Bulk sugar procurement will not start yet as the country has enough stocks of the product. A technical committee, comprising
experts from the ministry and key stakeholders from the sugar sector advised Government that there was enough domestic
stocks. The committee will make a further assessment of the situation later this month. The industry is in a crisis over continued
supply of cheap and illegal sugar imports that have left millers holding tonnes of the product. The government has not issued a
permit for importing domestic sugar in 2-years although the market is flooded with illegally smuggled product.
Local sugar producers say they have 55,585T of sugar as at December 31 from 4-mills - Kilombero Sugar [32,841T], Mtibwa
Sugar Estates [84T], TPC Ltd [19,638T] and Kagera Sugar Ltd [3,022T]. The stock is enough to last for 2-months depending
on market factors. According to the sugar board, Tanzania imported a total of 41,858T of domestic sugar in 2012/13 year and
182,845.39T in 2011/12. It imported 131,651T of industrial sugar in 2012/13 year and 101,528T in 2011/12.
[Daily News 27/01/15]
27
Uganda
2015 Output At Top Producers Up 11%
Uganda’s 3-largest sugar refiners are expected to produce 11.5%
more this year, helped by an expanded cane acreage. Uganda
consumes about 350,000T of raw sugar a year and the government
wants more investment to meet rising demand, which is forecast to
double by 2030.
The Uganda Sugar Manufacturers Association [USMA] projects the
country’s 3-growers and processors will produce 416,000T of sugar in
2015, up from 373,000T last year. Output at Kinyara Sugar Works and
SCOUL, will increase in 2015 as it has land for sugarcane expansion
and capacity to still absorb the increased cane supply. Output at Kakira
Sugar Works [KSW], the largest of the three, is set to remain stable at
about 180,000T.
Production last year was up 25.2% from 2013, boosted by increased
processing capacity and higher cane supply from the 3-firms’
plantations and independent farmers. This month, the Ugandan
government signed a long delayed agreement with local owners of a
large tract of land in northern Uganda where Madhvani Group, owners
of KSW, intends to invest US$100 million in a new cane plantation and
processing plant.
[Reuters 21/01/15]
Zambia
Zambia Sugar Posts Record Sugar
Production
Zambia Sugar, a unit of South Africa’s Illovo Sugar, posted record
production of 424,024 MT during the milling season which ended in
December - the highest-ever tonnage produced by a single sugar
factory on the African continent in any given season. This topped its
previous production record from 3-years ago of 404,000 MT. Illovo is
Africa’s top sugar producer and its Zambian unit accounted for 31% of
its operating profit in the 6-months to the end of September last year.
[Engineering News 08/01/15]
Zimbabwe
Tongaat Hulett To Double Cane
Production By 2016
The Zimbabwean subsidiary of the South African Group Tongaat Hulett
plans to double production of sugarcane by next year. Tongaat Hulett
Zimbabwe [THZ] expects to harvest about 1.8 million tonnes as it has
increased by 1,022 the number of producers under contract to ensure
its supply. National demand is experiencing a steady increase from
475,000T in 2014 to 628,000T by 2016. At the end of its 2014fiscal
year, the subsidiary recorded a turnover of US$58 million.
[Ecofin 22/01/15]
28
COMMODITY NEWS
TEA
29
Kenya
Farmers Demand Reduction Of KTDA Management Levy
Farmers want the management agency fee that the Kenya Tea Development Agency [KTDA] charges factories reduced. They
said the 2.5% charge on net sales is too high and should be reduced to 0.5% as it eats into their returns. The levy is charged on
66 farmer owned tea factories. Meanwhile KTDA noted the levy was previously 7% and was reviewed downwards after farmers
complained.
[Star 10/01/15]
Microfinance Institution To Expand Beyond Tea Sector
Greenland Fedha Limited [GFL], a microfinance institution for small-scale tea farmers in Kenya, has implemented a new software
solution to improve its efficiency and remain competitive in the market. The system has automated its processes and enabled it to
develop a mobile payment solution. GFL is wholly owned by the Kenya Tea Development Agency [KTDA] Holdings and provides
financial services to the tea sub sector. GFL can get money to farmers regardless of whether they have a bank account or how
remote their farms are – by simply paying the money directly into their mobile phones.
[IT News 27/01/15]
Farmers Reject Takeover By County
Farmers have rejected a plan by the Murang’a government to take over the management of tea. Farmers at Ngere, Njunu
and Makomboki factories threatened to uproot their crop and hold demonstrations if the government replaces the Kenya Tea
Development Agency [KTDA], noting the county government has no capacity to handle operations currently being carried out by
KTDA.
[The Star 12/01/15]
Egypt Will Go On Buying Kenyan Tea
Egypt will continue to be the leading importer in Africa of Kenyan tea, its trade Minister told a Kenya-Egypt business forum held
in Nairobi. The forum was aimed at strengthening trade relations between the 2-countries which witnessed the formation of a
business council that draws 10 representatives from each country to explore trade opportunities.
[Star 15/01/15]
Top Price Of Kenya’s Best Grade Tea Rises At Auction
The maximum price of the top grade Kenyan tea, Best Broken Pekoe Ones [BP1s], rose at auction this week compared with the
previous sale. Africa Tea Brokers noted the following tea prices from the Mombasa auction, in which tea from other producers in
the region is also sold:
Tea Grades
Prices This Week: $/Kg
Prices Last Auction: $/Kg
BP1 Best Broken Pekoe Ones
2.20-3.60
2.40-3.56
PF1 Best Brighter Pekoe Fanning Ones
3.12-3.26
3.02-3.15
PD Pekoes Dusts
2.45-3.44
2.45-3.28
D1 Dusts
2.58-3.31
2.40-3.14
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COMMODITY NEWS
TIMBER
General
Harvesting Back To Normal After Rains
For a few of the most popular species minor price changes have been reported for early trade in the New Year. In general
producers report demand remains steady despite the slight slowing of business for Asian markets ahead of the Chinese New
Year celebrations towards in February. Some producers believe demand has peaked and without fresh stimulus it is possible that
prices for some of the most sought after species may drift down. This could be accelerated as log harvests are now rising as the
worst of the rain season is over.
[ITTO Report 1-15/01/15]
Producers Optimistic
Log stocks at Douala Port have now been reduced and all outstanding shipments are expected to be cleared by month end.
The Gabon government is reported to be making further changes to the permitted cutting sizes for sawnwood and boules. The
market outlook for West and Central African business in Q1 is difficult to forecast but producers are more optimistic for Q2 as
construction activity in the EU picks up after the winter lull.
[ITTO Report 1-15/01/15]
Competition For Market Share Toughens As EU Demand Wanes
There is growing concern over economic prospects in the EU such that it is very difficult to forecast likely trends in demand
even in the short-term. In terms of trade in all products, West Africa is the EU’s most important trading partner in the African,
Caribbean and Pacific region. West African countries account for 40% of all trade between the EU and the African, Caribbean
and Pacific region with Côte d’Ivoire, Ghana and Nigeria accounting for 80% of all exports to the EU. Demand from Middle East
buyers remains firm and prices are stable even in the face of growing efforts on the part of suppliers of European softwoods and
temperate hardwoods to capture market share.
The lack of clear direction in the international markets will make it difficult for producers in Cameroon as they consider preparing
offers for the annual auction of forest concession areas. At the moment demand and supply is fairly evenly balanced but negative
economic news in major markets could tip the balance and create pricing problems. The Chinese market now plays a major role
in the timber trade and all eyes on how the Chinese economy will develop.
[ITTO Report 1-15/01/15]
31
Cameroon
CFAF13.7 Billion Program To Develop Industry
The Cameroon Government has provided the Programme For Processing Forest Products [PNATPF] with a budget of 13.7 billion
Cfa francs.
[Cameroon Web 21/01/15]
Think Tank Publishes Critical Report
The influential think tank Chatham House published a report examining the extent of illegal logging in Cameroon and its
associated trade and response. It found that progress has stalled since 2010, with illegal activity accounting for nearly 33% of all
timber felled. The checklist of failures include the proposed reform of the forestry sector’s legislative framework as incomplete, the
availability of information on forestry projects as inadequate, transparency and enforcement in the sector is weak and on top of it
all corruption remains rampant with little political will around to change this.
[All Africa 23/01/15]
Ghana
Q3 Exports Up 21%
The Timber Industry Development Division [TIDD] of the Ghana Forestry Commission [FC] has released its Timber Export Report
for the first 9-months of 2014. Ghana exported a total of 249,846 cu.m of timber and wood products worth €98.50 million. This
represented increases of 21% in volume and 7.8% in value compared to same period in 2013. Products for which increases were
recorded included kiln and air dry sawnwood, poles and billets. A large volume of gmelina poles were exported to India.
The major markets for Ghana’s wood product exports in the first three quarters of 2014 were Asia/Far East 44%, Africa 26%
with the balance going to Europe. Other markets included the US [5%], Middle East [3%] and Oceania. The Average Unit Price
for 2014 exports to the ECOWAS market was in the range of €229-434 per cu.m, up slightly on the €223–392/cu.m in the same
period in 2013. Exports to Niger were the lowest priced while export prices in the Togo and Gambia markets were the highest.
The main export species included wawa, Mahogany, Gmelina, Teak, Papao, Koto, Odum, Ceiba, Walnut, Ofram.
[TIDD 15/01/15]
Zambia
ZAFFICO Pressed To Meet Demand
The Zambia Forestry and Forest Industries Corporation [ZAFFICO] will this year harvest a total of 470,000 cu.m of wood to be
distributed to 1,071 customers up from 587 customers last year. Zambia National Association for Sawmillers [ZNAS] called for
transparency and accountability in the distribution of wood and requested a Government ban on the export of timber in order to
meet the local demand.
[Daily Mail 19/01/15]
32
COMMODITY NEWS
TOBACCO
Malawi
Malawi Assesses Flood-Damaged Tobacco
The Tobacco Control Commission [TCC] has commenced the assessment of damages to tobacco by floods after heavy rains in
recent months. The rains have caused leaching of nitrogenous related fertilisers applied in farms. It is also very difficult for farmers
to control weeds in the fields and curing the leaves is also problematic. Rains have also led to tobacco disease that is affecting
the production of the crop. It will take the commission 2-weeks to come up with a detailed assessment report that will indicate
the amount of damages incurred to production.
[Star Africa 20/01/15]
Zimbabwe
Zimbabwe Imported US$29 Million Tobacco For Blending
Local companies last year spent US$29.3 million on tobacco imports that they use for blending with locally grown Virginia
tobacco to make cigarettes. The companies imported about 8.1 million kg from 9-countries at an average price of US$3.64/kg.
The tobacco imported during the period under review was however lower that the 14.3 million kg that was bought for US$51.7
million at an average price of US$3.60/kg in 2013.
2014: Imported From
Amount [kg]
Total Price [US$]
Average Price [US$]
Zambia
6.5 million
21.4 million
3.28/kg
India
885,792
4.4 million
5.02/kg
Malawi
257,035
1.5 million
5.89/kg
Mozambique
99,000
711,810
7.19/kg
Bangladesh
79,200
237,600
3/kg
Other imports were sourced from South Africa, Uganda, the United Kingdom and the United Arab Emirates.
In 2014 Zimbabwe grossed US$722.5 million from exporting 135.5 million kg of Virginia tobacco at US$5.70/kg. This was slightly
lower than the US$877.4 million that was received from the sale of 153.3 million kg at US$5.72/kg in 2013.
2014: Exported To
Amount [kg]
Total Price [US$]
Average Price [US$]
China
48 million
401.9 million
8.37/kg
Belgium
29.7 million
131.5 million
4.01/kg
South Africa
13 million
52.1 million
4.01/kg
UAE
9.2 million
29.1 million
3.16/kg
Russia
4.7 million
14.2 million
2.98/kg
Tobacco is one of the country’s top foreign currency earners and accounts for 10.7% of the country’s Gross Domestic Product
[GDP]. It is one of the country’s top foreign currency earners and is also one of the key crops that is expected to anchor the 9%
growth in agriculture this year within the framework of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
[The Herald 12/01/15]
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