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COM-WATCH<br />
AFRICA<br />
ISSUE <strong>37</strong> | JUNE <strong>2014</strong><br />
COCOBOD TO SEEK ALMOST<br />
US$2 BILLION FOR NEXT LOAN<br />
Full Story On Page 9<br />
Mali Government Calls For<br />
36% Jump In Cotton Output<br />
17 27 33<br />
Omnicane To Invest US$250M<br />
In Ghanaian Sugar Production<br />
EU Tropical Log Imports Down<br />
54% To End February <strong>2014</strong>
COM-WATCH<br />
AFRICA<br />
ISSUE <strong>37</strong> | JUNE <strong>2014</strong><br />
Contents<br />
03 /<br />
General<br />
04 /<br />
Cashew &<br />
Groundnut<br />
05 /<br />
Cassava<br />
06 /<br />
Cocoa<br />
13 /<br />
Coffee<br />
17 /<br />
Cotton, Textiles<br />
& Leather Goods<br />
19 /<br />
Fish<br />
21 /<br />
Foodstuffs<br />
25 /<br />
Palm Oil<br />
27 /<br />
Sugar<br />
30 /<br />
Tea<br />
33 /<br />
Timber<br />
39 /<br />
Tobacco<br />
1
THE AFRICAN COMMODITY REPORT<br />
Brought to you by CMA CGM / DELMAS Marketing<br />
Rachel Bennett<br />
Dominic Rawle<br />
Website: www.delmas.com<br />
Email: lhv.marketing@delmas.net<br />
Tweet: @DelmasWeDeliver<br />
CMA CGM Marseille Head Office<br />
4, Quai d’Arenc 13235 Marseille cedex 02 France<br />
Tel : +33 (0)4 88 91 90 00<br />
www.cmacgm.com<br />
Disclaimer of Liability<br />
CMA CGM / DELMAS make every effort to provide and maintain usable,<br />
and timely information in this report. No responsibility is accepted for<br />
the accuracy, completeness, or relevance to the user’s purpose, of<br />
the information. Accordingly Delmas denies any liability for any direct,<br />
indirect or consequential loss or damage suffered by any person as a<br />
result of relying on any published information. Conclusions drawn from,<br />
or actions undertaken on the basis of, such data and information are the<br />
sole responsibility of the reader.<br />
Cocobod To Seek Almost<br />
US$2 Billion For Next<br />
Loan<br />
Mali Government Calls<br />
For 36% Jump In Cotton<br />
Output<br />
Omnicane To Invest<br />
US$250M In Ghanaian<br />
Sugar Production<br />
EU Tropical Log Imports<br />
Down 54% To End<br />
February <strong>2014</strong><br />
9<br />
17<br />
27<br />
33<br />
2
COMMODITY NEWS<br />
GENERAL<br />
Tanzania Crop Price Buffer Planned<br />
The Tanzanian government is establishing a Crop Price Stabilisation Fund to insulate farmers<br />
from fluctuations in the world market prices. The fund, which will start operating during the<br />
financial year <strong>2014</strong>/15, will start with 4-crops: cotton, coffee, cashew nuts and tobacco.<br />
In years when the world price is high some of the returns are paid into the fund while the<br />
accumulated revenues are used to bring up prices during years when prices are low. Low<br />
prices paid to farmers rendered them unable to make consistent investments to produce<br />
sustainable output thus famers needed to be incentivize to produce more, including securing<br />
markets, good prices and making value addition to the crop.<br />
[Daily News 15/05/14]<br />
3
COMMODITY NEWS<br />
CASHEW / GROUNDNUT<br />
Gambia<br />
GGC Purchases 34,000 Tonnes In 2013/14 Season<br />
The Gambia Groundnut Cooperation [GGC] has declared the 2013/14 trade season “successful”, after it purchased 34,000<br />
tonnes of groundnut. This season was the best so far. GGC is distributing 25% commission to farmers and as the rainy<br />
season draws closer it is also issuing fertilizer on loan.<br />
[Daily Observer 24/05/14]<br />
Guinea Bissau<br />
Guinea Bissau Sets Aside Billions For Purchase Of Cashew<br />
The Guinea Bissau government has set aside 12 billion CFA Francs [US$256 million] to purchase cashew nuts from<br />
agriculture cooperatives and trade intermediaries at a cost of 250 CFA F/kg, against the price of between 50-100 CFA F<br />
by some traders. The funds released by government will be able to purchase 50,000 tons of cashew nuts from farmers. A<br />
few weeks ago, farmers had accused some brokers of trying to sabotage the cashew nut business by proposing to buy the<br />
product from farmers at a cost of 50 CFA F. In 2011, the government introduced a tax of 50 CFA F/kg, a move that earned<br />
the country US$20 million that year. However, during its last evaluation, the International Monetary Fund [IMF] called for the<br />
suspension of the tax, as had equally been demanded by the association of exporters.<br />
[Xinhua 27/05/14]<br />
4
COMMODITY NEWS<br />
CASSAVA<br />
Cameroon<br />
Cassava Processing: Government Makes Good On Old Promise<br />
The government of Cameroon has kept its promise to help farmers increase production and encourage cassava<br />
transformation by supporting groups embarking on a large scale cassava processing initiative. A new cassava pasta is the<br />
first of several products which government plans to produce in the months ahead and compete with imported wheat used<br />
for the production of pastries, spaghetti and pasta presently in the market.<br />
[Nouvelles 26/05/14]<br />
Ghana<br />
Large Scale Cassava Production<br />
Beverage manufacturer, Kasapreko <strong>Com</strong>pany Limited [KCL], has acquired 40% shares in Caltech Ventures <strong>Com</strong>pany<br />
Limited. Caltech has acquired 3,000 ha of land at the Hodzo near Ho for large-scale production of cassava to be processed<br />
to produce a number of products including ethanol, high quality cassava flour and electricity. Ghana currently imports 60<br />
million liters of ethanol annually, while KCL, the only beverage manufacturer with a bulk storage facility in Ghana, also imports<br />
25 million liters of ethanol in bulk from Brazil, Pakistan, USA and France.<br />
[Spy Ghana 21/05/14]<br />
5
COMMODITY NEWS<br />
COCOA<br />
General<br />
Higher West Africa Farmer Prices Won’t Fill Global Cocoa Gap<br />
Ivory Coast expected<br />
to raise farmer price<br />
above 800 CFA<br />
Farmers hope for<br />
prices between<br />
900/1,000 CFA<br />
ICCO forecasts global<br />
2013/14 deficit of<br />
115,000 tonnes<br />
West African cocoa output is unlikely to rise enough to stave<br />
off a global supply deficit forecast until at least 2015/16.<br />
Global cocoa market prices are near 2-1/2-year highs, but<br />
fixed prices in top growers Ivory Coast and Ghana are seen<br />
by some as too low to incentivise higher output, meaning<br />
world prices will have to stay higher for longer. A source at<br />
Ivory Coast’s finance ministry noted the country would raise<br />
the fixed farmer price above 800 CFA F/kg [USA$1.67] for the<br />
season starting on Oct. 1, from the current season’s 750 CFA<br />
F.<br />
The Ivorian government abandoned a decade of sector<br />
liberalisation at the start of the 2012/13 season and began<br />
auctioning its anticipated crop to guarantee a minimum price<br />
for farmers. That price was fixed at 750 CFA francs [$1.57] per<br />
kg at the start of the country’s main crop harvest in October<br />
and was maintained into the April-to-September mid-crop.<br />
Ivory Coast had finished selling its 2013/14 cocoa crop by<br />
early January, auctioning off more than 1.45 million tonnes of<br />
beans, taking advantage of world cocoa prices that rose 20 %<br />
last year on fears of a global supply deficit. Forward sales for<br />
the <strong>2014</strong>/15 season were already at 780,000 tonnes at that<br />
point.<br />
A high farmer price for next season’s Ivorian crop is likely to<br />
pile pressure on neighbouring Ghana. As much as 100,000<br />
tonnes of Ghanaian cocoa have been trafficked into Ivory<br />
Coast so far this season and the situation could worsen if the<br />
price gap between the 2-countries widens further.<br />
Ghana has had a fixed price for decades and is expected to<br />
raise it in the coming season. Traders and analysts, however,<br />
said the anticipated increases were not enough to encourage<br />
more output from farmers.<br />
The world already faces 2-consecutive deficit years, with the<br />
International Cocoa Organization [ICCO] forecasting a 2013/14<br />
global cocoa shortfall of 115,000 tonnes. Ivorian farmers<br />
reinforced the idea that they would need a price closer to<br />
1,000 CFA francs to ramp up production.<br />
Analysts forecasts a global 2013/14 cocoa deficit. Liffe<br />
cocoa futures rose around 20% in 2013, supported by the<br />
gap between supply and demand. Around 100,000 tonnes<br />
of additional cocoa production is needed each year to meet<br />
growing demand, and traders said cocoa-growing countries<br />
with liberal markets had already responded to higher world<br />
prices.<br />
[Reuters 16/05/14]<br />
6
COMMODITY NEWS<br />
COCOA<br />
ADM Names Grain Chief To Run Cocoa Unit After Dropping Sale Plan<br />
Archer Daniels Midland Co has appointed a veteran grains trader to run its niche cocoa operations in a management reshuffle<br />
just weeks after the U.S. agribusiness scrapped plans to sell the business. Ian Pinner has been named president of global<br />
cocoa, where he will oversee the cocoa press operations which extend from Ivory Coast to Germany to Brazil. He is replacing<br />
Scott Walker who will become vice president of oilseeds portfolio optimization. The changes come as ADM prepares to divest its<br />
chocolate manufacturing operations after ditching plans to sell the cocoa business in its entirety following the collapse of longrunning<br />
talks.<br />
[Reuters 07/05/14]<br />
Hershey Joins CocoaAction Initiative<br />
The Hershey <strong>Com</strong>pany will become a founding member of CocoaAction, a<br />
new strategy to align the cocoa sustainability efforts of the world’s largest<br />
cocoa and chocolate companies. CocoaAction creates a new level of<br />
coordination and commitment to promote cocoa sustainability in West Africa.<br />
Under the auspices of the World Cocoa Foundation, which will facilitate the<br />
implementation of the industry-wide strategy, CocoaAction seeks to build a<br />
rejuvenated and economically viable cocoa sector for at least 300,000 cocoa<br />
farmers - 200,000 in Côte d’Ivoire and 100,000 in Ghana - by 2020.<br />
By voluntarily working together as an industry, the strategy aims to increase<br />
of the impact of the cocoa industry’s numerous sustainability programs.<br />
Participating companies have committed to providing the necessary means to<br />
achieve a transformation of the cocoa sector. The governments of Ghana and Côte d’Ivoire have formally endorsed CocoaAction<br />
as the industry’s aligned effort to support their national cocoa sustainability plans.<br />
[Hershey 21/05/14]<br />
More details on the CocoaAction strategy are available at the World Cocoa Foundation website:<br />
http://worldcocoafoundation.org/wp-content/uploads/FINAL-CocoaAction-CDI-Press-Release-English_0520<strong>2014</strong>.pdf<br />
Cameroon<br />
Cocoa Exports Drop 48% In April<br />
CocoaAction <strong>Com</strong>panies<br />
ADM; Armajaro; Barry Callebaut; Blommer; Cargill; Ecom;<br />
Ferrero; Hershey <strong>Com</strong>pany; Mars, Incorporated; Mondelz<br />
International; Nestlé; Olam.<br />
Cameroon had exported 146,417 T of cocoa beans by end-April since the start of the 2013/14 season in August, down from<br />
199,147 T during the same period the previous season, according to National Cocoa and Coffee Board [NCCB] data. Cameroon<br />
shipped 3,043 T of beans in April, down from 3,207 T in March and 5,849 T in the same month a year ago. 10-companies<br />
exported beans in April, up from 7 in March.<br />
Producam topped the list with 1,003 tonnes, followed by Olam Cam with 860 T, and Ets Ndongo Essomba with 301 T. For the<br />
2nd consecutive month, Sic-Cacaos and Chocolaterie Confiserie du Cameroun [CHOCOCAM] made no purchases. Cameroon’s<br />
cocoa season runs from August 1 to July 31, with the main crop harvest period from October to January/February and the light<br />
crop harvest from April/May to July. National output hit a record of 240,000 T in the 2010/11 season before dropping to 220,000<br />
T in 2011/12 due to attacks by pests and diseases and a prolonged dry season. It rose to 228,948 T in 2012/13.<br />
[Reuters 25/05/14]<br />
Magnetised Cards For Cocoa / Coffee Exporters To Limit Fraud<br />
To clean-up cocoa and coffee sales in Cameroon, the CICC announced it will from next season be providing exporters with<br />
magnetised cards. The move aims to limit fraud. The new IDs will be provided to exporters at the start of the next season and<br />
will be the only proof of regularised status for cocoa-coffee buyers, authorising them to engage in the purchase of beans in<br />
Cameroon.<br />
[Business in Cameroon 22/05/14]<br />
7
Cote d’Ivoire<br />
Oct-Apr Cocoa Product Exports Up Over 4%<br />
Exports of semi-finished cocoa products from Ivory Coast were 238,598 tonnes from October to April of the 2013/14 season, up<br />
more than 4% compared with the same period last year. Investments in cocoa processing facilities in Ivory Coast have increased<br />
local grindings since 2008. In 2010, the nation overtook the Netherlands to become the world’s top cocoa grinder with a capacity<br />
of 532,000 tonnes of beans, which are transformed mainly into cocoa butter and powder. Ivory Coast grinds around 35%^ of<br />
its beans locally but aims to process half of its average annual production of roughly 1.4 million tonnes domestically as part of<br />
reforms launched last season. The following are official figures for cocoa product exports in tonnes, including a breakdown of<br />
cocoa powder, butter and chocolate.<br />
[Reuters 26/05/14]<br />
Apr <strong>2014</strong> Mar <strong>2014</strong> Apr 2013<br />
Abidjan 12,522 22,559 20,488<br />
San Pedro 11,903 13,359 10,495<br />
Total 24,425 35,918 30,983<br />
Cumulative from Oct 238,598 214,173 228,773<br />
Powder - Abidjan 939 2,597 4,452<br />
Butter - Abidjan 2,<strong>37</strong>0 6,159 5,005<br />
Chocolate - San Pedro nil nil nil<br />
Cocoa Farmer Price Falls Despite Heavy Grinder Demand<br />
Cocoa merchants in several of Ivory Coast’s main growing regions have begun paying farmers less than the government<br />
guaranteed minimum price amid complaints of small bean size and poor road conditions. Grinders, however, continued to pay<br />
bonuses for shipments arriving at the country’s two ports of Abidjan and San Pedro in order to ensure supplies. The mid-crop<br />
marketing season in Ivory Coast opened on April 1, with the government maintaining the minimum farmgate price of 750 CFA<br />
F/kg [US$1.59] set at the start of the main crop in October. Buyers say that the beans are too small and often buy at 700-725<br />
CFA F/kg. A lack of merchants operating in the bush has also driven down prices as little competition for the growing volumes of<br />
beans now being harvested.<br />
Traders are expecting a strong mid-crop harvest in Ivory Coast. Earlier concerns over poor weather have been dispelled with the<br />
arrival the rainy season’s regular showers which in turn damaged roads, making it harder for merchants to reach plantations deep<br />
in the bush. Analysts now predict a better than expected crop in West Africa after forecasts of a supply deficit boosted prices<br />
20% last year.<br />
Meanwhile cocoa with a bean count above 120 beans/100g is not allowed to be exported as beans. And since the mid-crop<br />
produces smaller beans than the main crop, the lion’s share of total volumes is typically purchased by local processors. Ivory<br />
Coast set a minimum price port entry price of 830 CFA F/kg this season with a price ceiling of 845 CFA / kg. However some large<br />
grinders are now paying above the maximum price allowed offering up to 860 CFA F because the bean quality is good.<br />
[Reuters 07/05/14]<br />
Rains <strong>Com</strong>plicate Cocoa Bean Drying<br />
Abundant rains occurred in most of Ivory Coast’s main cocoa-growing regions which should help mid-crop development, but<br />
growers are struggling to dry their beans. Farmers noted harvesting was intensifying with large stocks of beans waiting to be<br />
collected from plantations. In the coastal region of San Pedro, farmers said that while 2-weeks of heavy showers were helping<br />
their trees, they were struggling to prepare their beans for pick-up by merchants and worried there would be a lot of mould in the<br />
shipments. In western Duekou farmers were certain they would have problems to properly ferment and stock their beans in the<br />
bush. Ivory Coast introduced stricter quality standards, including for mould and moisture levels, as part of a drive implemented<br />
last season that exporters have credited with improving the reputation of the country’s cocoa.<br />
[Reuters 29/04/14]<br />
8
COMMODITY NEWS<br />
COCOA<br />
Ghana<br />
Cocobod To Seek Almost US$2 Billion For Next Loan<br />
The Governor of the Bank of Ghana [BoG] Dr Henry Kofi Wampah has hinted that the country’s cocoa industry regulator,<br />
Cocobod will this year go for about US$1.8 billion for its syndicated loan. Last year Cocobod signed a US$1.2 billion syndicated<br />
loan from international banks for the 2013/14 cocoa crop purchases as against US$1.5 billion for 2012/13. The credit facility<br />
between Cocobod and a consortium of international and local banks was led by French lender Societe General. The Cocobod<br />
syndicated loan is used to purchase cocoa beans from farmers. Last year the offer was oversubscribed by 75%. The increased<br />
figure is as a result of a higher projection of cocoa yield this year. Ghana aims to raise its production to an average of 1 million<br />
tonnes annually from 800,000 tonnes through improved farming methods and better incentives.<br />
[Ghanaweb 08/05/14]<br />
9
Ghana Cocoa Main Crop Purchases Reach 750,122T By May 1<br />
Cocoa purchases declared to Cocobod Ghana’s industry regulator reached 750,122 tonnes by May 1, since the start of the main<br />
crop on Oct. 18, up 17.45 % on the previous year. The purchases, which covered 28 weeks of the 33-week main crop season,<br />
were up from 638,654 tonnes declared in the same period last year. Ghana is hoping to buy around 850,000 tonnes of cocoa<br />
during its October-May main crop harvest. Total purchases for the 28th week rose to 17,170 tonnes from an average of 10,000<br />
tonnes in the past 3-weeks. Buyers say the rise in the latest output figure indicated that purchases were on target as projected.<br />
[Reuters 15/05/14]<br />
Currency Fall Deepens Ghana’s Cocoa Smuggling Troubles<br />
Cedi has slipped<br />
23% against dollar<br />
this year<br />
Farmers seeking to<br />
cash in on I. Coast's<br />
higher price<br />
Trafficking likely to<br />
continue<br />
Ghana’s falling currency has fuelled smuggling of as much as 100,000 tonnes of cocoa into neighbouring Ivory Coast since<br />
October, reversing a trend. Cocoa smuggling between the world’s 2-biggest cocoa producers is common, but over the past<br />
decade it has mainly involved Ivorian beans being taken illegally to Ghana. That has changed this season. Ghana’s cedi currency,<br />
which the government has struggled to prop up, has fallen nearly 23% against the dollar so far this year, while Ivory Coast’s europegged<br />
CFA franc has remained stable, making the country’s official farmer price around 24% higher than Ghana’s.<br />
Exporters said the Ivorian price is now seen as more attractive by Ghanaian farmers, who can make bigger profits selling their<br />
output to smugglers. Estimates of smuggled volumes rang from 40,000 to 80,000 tonnes of beans, while exporters in Ivory Coast<br />
put the figure at between 50,000 and 60,000 tonnes. Bean arrivals at Ivorian ports reached around 1.3 million tonnes by May 11,<br />
according to exporters’ estimates, up more than 10% from the same time last season.<br />
Ivory Coast’s October-to-March main crop opened on Oct. 2 with its sector regulator, the CCC, fixing a minimum guaranteed<br />
farmer price of 750 CFA F/kg [US$1.59]. Ghana’s price of 3,392 cedis per tonne was roughly on par with Ivory Coast’s at the<br />
time. Despite the beans lost to smuggling, Ghanaian cocoa output still remains more than 15% ahead of last year’s levels with<br />
purchases reaching 704,266 tonnes by April 8 since the start of the main crop. But Ivory Coast decided to maintain its farmer<br />
price at the main crop level of 750 CFA F/kg for April-to-September mid-crop cocoa, which is usually sold at a discount. This in<br />
turn could further fuel illegal trafficking as Ghana heads towards its light crop in July unless they raise the price.<br />
[Reuters 12/05/14]<br />
Processing <strong>Com</strong>panies Owe COCOBOD US$250 Million<br />
Five out of the 10 indigenous cocoa processing companies in the country owe the Ghana Cocoa Board [COCOBOD] US$250<br />
million in unpaid bills under the Old Beans Supply Agreement. This has compelled COCOBOD to take drastic measures to halt<br />
the continued supply of cocoa beans to the companies to save the board from going bankrupt. The move is likely to affect more<br />
than 6,000 workers of the companies and their outsource service providers. The amount owed COCOBOD ranges from US$3<br />
million to more than $50 million per company since 2010.<br />
Cocoa Farmers To Receive Payments From E-Zwich<br />
Cocoa farmers would from the beginning of this year’s light crop season receive payments for cocoa sold to the licensed buying<br />
companies [LBCs] only from e-zwich and by cheque. The use of cash, the authorities say, would no longer be permitted. apart<br />
from the flexibility the e-zwich offered in terms of money withdrawal from all banks, savings and loans companies, it would<br />
provide accurate records on the number of cocoa bags sold by every farmer. That would make it easier for the determination of<br />
bonuses payable to them.<br />
[Ghanaweb 23/05/14]<br />
10
COMMODITY NEWS<br />
COCOA<br />
Nigeria<br />
Cross River State Plans To Sell 5 Cocoa Farms<br />
Cross River State, Nigeria’s 2nd-largest cocoa grower will sell 5-government-owned farms in a bid to boost production of the<br />
commodity with private investment. Prospective investors have until May 19 to bid on the cocoa farms, which the government<br />
expects to sell before the end of next year. The farms cover 12,129 ha and produce about 50,000 MT annually.<br />
Nigeria, the world’s 4th-largest cocoa producer, will probably will see output jump 10% in 2013-<strong>2014</strong> season after higher prices<br />
last year lead to planting of more disease-resistant plants according to the Cocoa Association of Nigeria. The nation plans to<br />
double production to 500,000 tons by next year. The main harvest begins in October and ends in January, while a smaller crop is<br />
collected from March through <strong>June</strong>.<br />
[Bloomberg 05/05/14]<br />
Output Seen Rising Less Than Expected<br />
Nigeria will probably produce less than originally expected this year as rainfall harms yields in the southeastern part of the country.<br />
The Cocoa Association of Nigeria noted production would increase by a small amount, bur would not match the 10% gain<br />
forecast in January. The government is to distribute fungicides to help farmers deal with the blackpod threat. Nigeria’s recent<br />
measures of distributing fertilizers and early-maturing, high-yielding, disease-resistant beans led the country’s cocoa association<br />
earlier this year to expect a bigger crop. The farm-gate prices for cocoa beans increased 12% to N470,000/t [US$2,892] from<br />
N420,000 in January, which enables more farmers to buy agrochemicals to protect their crops. Nigeria’s main crop begins in<br />
October and ends in January, while the smaller mid-crop season usually begins in March and ends in <strong>June</strong>. The start and end<br />
dates of the seasons may vary each year depending on the weather.<br />
[Bloomberg 28/05/14]<br />
11
Daily Spot Price [ICCO]<br />
These are the average of the quotations of the nearest 3-active futures trading months on NYSE Liffe Futures and Options and<br />
ICE Futures US at the time of London close.<br />
Date<br />
ICCO daily price<br />
(SDRs/tonne)<br />
ICCO daily price<br />
(US$/tonne)<br />
London futures<br />
(£ sterling/tonne)<br />
New York futures<br />
(US$/tonne)<br />
1 May 14 1934.23 3003.70 1823.00 2931.00<br />
2 May 14 1932.99 2999.03 1823.33 2928.67<br />
5 May 14 1932.23 3000.80 1819.67 29<strong>37</strong>.00<br />
6 May 14 1931.00 3005.85 1816.00 2933.67<br />
7 May 14 1914.90 2980.93 1805.00 2905.00<br />
8 May 14 1911.81 2976.61 1804.67 2899.00<br />
9 May 14 1900.80 2946.70 1796.33 2871.33<br />
12 May 14 1905.79 2950.38 1791.00 2884.00<br />
13 May 14 1929.04 2980.67 1818.33 2905.00<br />
14 May 14 1925.61 2974.68 1818.00 2902.67<br />
15 May 14 1936.08 2986.11 1826.00 2910.67<br />
16 May 14 1943.89 3003.28 1830.33 2931.33<br />
19 May 14 1950.73 3016.78 1840.67 2941.33<br />
20 May 14 1972.20 3048.29 1855.67 2976.00<br />
21 May 14 1982.12 3064.29 1863.00 2991.00<br />
22 May 14 1997.55 3085.73 1880.33 3006.67<br />
23 May 14 2015.46 3107.05 1895.67 3030.33<br />
27 May 14 2018.31 3113.55 1904.33 3032.67<br />
28 May 14 2018.50 3110.24 1910.33 3033.00<br />
29 May 14 2028.69 3125.77 1918.67 3049.00<br />
30 May 14 2044.48 3149.45 1932.33 3064.67<br />
12
COMMODITY NEWS<br />
COFFEE<br />
Master Blenders to Buy Mondelez Coffee Unit For US$5 Billion<br />
JAB Holding Co., the investment arm of the billionaire Reimann family, agreed to pay Mondelez International Inc. US$5 billion in<br />
cash to create the world’s 2nd-biggest coffee company. A company led by JAB will combine Mondelez’s coffee unit with D.E<br />
Master Blenders 1753 BV, giving it control of brands such as Jacobs. Mondelez will gain a 49% stake in the new company,<br />
which will be named Jacobs Douwe Egberts and be based in the Netherlands. The move is the latest step from JAB to<br />
consolidate in coffee. The company last year bought Master Blenders, the Amsterdam-based maker of Douwe Egberts, for<br />
US$10.4 billion. That transaction, the industry’s biggest deal ever, was followed by purchases of Peet’s Coffee & Tea Inc. and<br />
Caribou Coffee Inc. The merged entity will have sales in excess of US$7 billion and be the market leader in countries such<br />
as France and Austria. The transaction, which excludes Mondelez’s coffee business in France, should close next year. The<br />
purchase of the Mondelez division follows a surge in prices for coffee. Robusta coffee futures have climbed 27% this year to<br />
US$2,142/MT in London, and are up 6.6 % in the past 12 months. Arabica coffee futures surged 83% this year in New York to<br />
US$2.0305/lb, advancing 42% in the past 12 months.<br />
13
Cameroon<br />
Dec-Feb Robusta Exports Down on Year<br />
Exports of robusta coffee from Cameroon during the first 3-months of the 2013-<strong>2014</strong> season fell compared with a year earlier,<br />
figures from the National Cocoa and Coffee Board data showed. Cameroon exported 790 tons of robusta coffee from December<br />
through February, down from 1,038 tons it shipped in the same period of the previous season.<br />
Cameroon’s robusta coffee season officially runs from December through November the subsequent year. Cameroon exported<br />
194 tons of the crop in February, down from 390 tons it exported in February 2013. Cameroon’s robusta exports have sunk in<br />
recent years as farmers have switched to growing crops such as yams, vegetables and cassava, to take advantage of rising food<br />
prices as coffee prices on world markets fall.<br />
The robusta harvest during the 2012-2013 season was 16,175 tons, down from 36,641 tons in the 2011-2012 season. The<br />
government plans to raise robusta output to 100,000 tons by 2020.<br />
[Dow Jones 29/04/14]<br />
Nestlé Cameroon To Produce Nescafé Using Locally Produced Coffee<br />
As of July Nestlé Cameroon, a subsidiary of the Swiss<br />
agro-foods giant, will produce Nescafé using Cameroongrown<br />
coffee. Nestlé Cameroon plans to take advantage<br />
of its addition to the Cameroonian government’s “indirect<br />
refinement initiative” provided for in the Cameroonian<br />
Customs code which mandates a reduction in the Customs<br />
royalties.<br />
According to current practices within the group, the Ivorian<br />
subsidiary which produces all Nescafé product sold in Africa<br />
[9,000 tonnes] and exported to Poland and Greece [3,000<br />
tonnes], sells the product to all other subsidiaries for the<br />
same price.<br />
However, while Cameroon pays Customs duties amounting<br />
to 30% of imported Nescafé, a country like Nigeria, which<br />
shares its highly permeable border with Cameroon, imports<br />
its Nescafé duty-free thanks to the free trade zone created<br />
by the UEMOA Treaty – a zone to which Nigeria and Cote<br />
d’Ivoire belong.<br />
[Business In Cameroon 30/05/14]<br />
Cote d’Ivoire<br />
Coffee Exports Up 6%<br />
Ivory Coast’s coffee bean exports reached 34,672 tonnes from October to April of the 2013/14 season, up more than 6% on<br />
the same period last year. The following is data for coffee bean exports in tonnes from the Ivory Coast ports of San Pedro and<br />
Abidjan.<br />
[Reuters 27/05/14]<br />
Apr <strong>2014</strong> Mar <strong>2014</strong> Apr 2013<br />
Abidjan 3,638 4,390 9,109<br />
San Pedro 1,255 1,263 297<br />
Total 4,893 5,653 9,406<br />
Cumulative from Oct 34,672 29,779 32,564<br />
14
COMMODITY NEWS<br />
COFFEE<br />
Kenya<br />
Coffee Value Sold At Kenyan Auction Up 24% In First Half<br />
The value of coffee sold at Kenya’s auction jumped 24% to US$83.5 million in<br />
the half-year to March, driven by improved global prices and better quality crop.<br />
Kenya sold coffee worth US$67.3 million in the first-half of the 2012/13 season<br />
that runs October to September. Given the dynamics in the global market it is<br />
anticipated that high prices will remain. Uncertainty over the performance of the<br />
crop in leading producer, Brazil following a prolonged drought, has helped prop up<br />
global prices of the commodity. Forecasts of El Niño weather conditions later this<br />
year have also lifted prices of the beans.<br />
Kenya exports about 90% of its coffee through the Nairobi Coffee Exchange [NCE], and the remainder is sold growers to foreign<br />
buyers directly. Officials said 324,247 60-kg bags were sold in the 6-months to March compared with 305,468 the previous<br />
year. The average price climbed to US$211.1 per 50-kg bag compared to US$180.7 in the previous year. Kenya expects its<br />
coffee export earnings to dip by 3% in the 2013/14 season, mainly weighed down by volatility in global prices. The Coffee Board<br />
of Kenya forecasts it will earn 18 billion Kenyan shillings from 50,000 tonnes of coffee produced in the 2013/14 season. Kenya<br />
earned around 18.5 billion Kenya shillings from exports of the commodity in 2012/13, down from 27.1 billion a year earlier.<br />
Coffee exports were at one time Kenya’s leading foreign exchange earner but have slipped from a record level of 130,000 tonnes<br />
in 1987/88. Many smaller coffee farmers, disillusioned with poor earnings, switched to other crops or sold land for real estate.<br />
The area of coffee plantations in Kenya has fallen to 109,000 ha from the average of 150,000 ha.<br />
[Reuters 19/05/14]<br />
Kenya’s Top-Grade Coffee Price Rises At Auction<br />
The maximum price of Kenya’s benchmark coffee grade jumped to $385 per 50-kg bag. Kenya’s main coffee harvest usually<br />
runs from November to December, with the highest-quality beans sold first after they are dried and processed. Sales tend to peak<br />
around February and March. Kenya’s second, smaller crop tends to be harvested from May to <strong>June</strong>. Weather can change the<br />
timings for harvests and sales.<br />
[Reuters 27/05/14]<br />
27th May 20th May 13th May 6th May 29th April<br />
AA COF-AA-KE $181-$385 $204-$<strong>37</strong>0 $210-$346 $305-$306 $179-$338<br />
AB COF-AB-KE $125-$283 $180-$272 $195-$244 $205-$270 $201-$276<br />
Bags Offered 4,842 20,451 22,941 22,731 23,800<br />
Bags Sold - 5,150 1,740 4,254 2,958<br />
Fetching $1.4 million $1.3 million $<strong>37</strong>8,901 $967,857 $691,384<br />
Average price per<br />
bag<br />
- $208.41 $178.08 $187.80 $192.71<br />
GRADE 20th May [$] Average Price [$] 13th May Sale [$] Average Price [$] 6th May Sale [$] 29th April [$]<br />
AA 204-<strong>37</strong>0 312.14 210-346 268.61 305-306 179-338<br />
AB 180-272 247.17 195-244 228.93 205-270 201-276<br />
C 166-241 206.26 188-227 208.73 199-267 1<strong>37</strong>-261<br />
PB 176-282 248.78 238-272 259.99 225-265 201-266<br />
T 102-191 163.05 84-185 121.24 104-206 80-214<br />
TT 177-232 216.66 205-229 216.95 210-250 201-252<br />
15
Tanzania<br />
Dar’s New Coffee Season Promising<br />
Tanzania has entered what is seen as the most promising new coffee buying season, thanks to rising coffee prices in the world<br />
market. The <strong>2014</strong>/2015 new coffee buying season started on May 1st in Mbeya, Kagera, Kigoma, and Mara which covers<br />
Mwanza and Geita when coffee prices in the global market have doubled. Coffee is one of the country’s major exports with<br />
production at more than 61,000 tonnes of coffee this season, up from 48,756 tonnes last season.<br />
The Northern zone which covers Kilimanjaro, Arusha, Manyara, Tanga and Morogoro regions will start the new season on <strong>June</strong><br />
1st and for the Ruvuma zone which covers Iringa and Njombe on July 1st. Coffee buyers must have a licence from Tanzania<br />
Coffee Board [TCB]. The board has opened offices within major coffee growing zones as part of its on-going strategies aimed<br />
at fast tracking development of the crop. TCB is hoping that the increase in prices will support the nation’s coffee industry<br />
development strategy of producing 80,000 tonnes of coffee in 2015/2016.<br />
Tanzania is rated as Africa’s 4th largest producer of coffee after Ethiopia, Uganda and Ivory Coast. Large part of last season was<br />
bad for coffee farmers after the world experienced a significant fall in coffee prices. Coffee price in the world market have been<br />
increasing since late January this year [<strong>2014</strong>] with significant increases recorded in February. The coffee price increases have<br />
been pushed by drought in Brazil, the world’s leading coffee producer. The International Coffee Organization [ICCO] notes the<br />
prices increased by 50% since January <strong>2014</strong>.<br />
[Daily News 06/05/14]<br />
Uganda<br />
Uganda Coffee Exports Up 35% Yr/Yr In April<br />
Uganda’s coffee exports in April rose by 35 % year-on-year to 336,676 60-kg bags, helped by rising global prices. According<br />
to Uganda Coffee Development Authority [UCDA], farmgate prices averaged 1,700 shillings/kg [US$0.67] of raw coffee in April<br />
compared to 1,300 in January.<br />
[Reuters 19/05/14]<br />
16
COMMODITY NEWS<br />
COTTON / TEXTILES & LEATHER GOODS<br />
General<br />
ICE Aims For Q4 Launch For New Global Cotton Contract<br />
IntercontinentalExchange [ICE - www.theice.com] expects to launch its new global cotton futures contract in Q4 <strong>2014</strong>, later than<br />
previously scheduled. The Atlanta-based exchange had previously aimed to list the contract, the first alternative for merchants,<br />
mills and growers to pricing on ICE’s U.S.-only one, in early <strong>2014</strong>. The contract will include cotton grown in the United States,<br />
Australia, Brazil, India, Benin, Burkina Faso, Cameroon, Ivory Coast and Mali. Delivery points will be in Australia and Malaysia.<br />
Some traders have questioned whether the new contract will attract sufficient liquidity to operate alongside the existing U.S.<br />
one, which is used as the global benchmark. Questions also remain over the ability to deliver certain growths to Malaysia and<br />
other logistics and grading issues. Supporters of the plan say the product is needed because the existing No. 2 contract, which<br />
accepts only cotton grown in the United States, is increasingly vulnerable to price-distorting squeezes. The exchange may<br />
consider adding other origins after the initial launch.<br />
[Reuters 01/05/14]<br />
Cameroon<br />
Cameroon Joins Cotton Made In Africa Initiative<br />
Cotton made in Africa [CmiA], an initiative designed to help African cotton farmers, has now extended to around 226,000<br />
smallholder farmers in Cameroon, making it the 7th project country. The initiative of the Aid by Trade Foundation provides<br />
assistance in helping cotton farmers help themselves through trade, to improve their living conditions in Sub-Saharan Africa. By<br />
joining the CmiA system farmers can now also benefit from the income from license fees which are used to pay for CmiA cotton<br />
and are reinvested in the project regions.<br />
[Just Style 16/05/14]<br />
Madagascar<br />
Socota Textile Group Expansion<br />
The Socota group, one of the Malagasy leaders in the textile sector, is looking to expand by the 2017. Cotona produce 21 million<br />
m2 of fabrics annually while Cottonline, another of its companies, manufactures 4 million pieces annually.<br />
[Ecofin 23/05/14]<br />
Mali<br />
Mali Government Calls For 36% Jump In Output<br />
The Mali government has called on farmers to boost raw cotton production by 36%<br />
to 600,000 tonnes in <strong>2014</strong>/2015 to take advantage of high global prices. This level<br />
exceeds the state cotton company’s forecast. State company CMDT’s forecast<br />
of 525,000 tonnes, is already a gain of more than 19%. Growers noted the target<br />
was achievable if the price of inputs is lowered and soil fertility is increased. Mali’s<br />
cotton sector is benefiting as higher world prices lure farmers back into fields.<br />
Cotton futures prices have risen, reaching a 2-year high in April, on concerns that<br />
prolonged drought in Texas will hurt the U.S. cotton harvest.<br />
President Ibrahim Boubacar Keita officially launched the April <strong>2014</strong> to end-March<br />
2015 season on 02/05/14. Keita announced a 40 billion CFA franc [US$84.6 million]<br />
subsidy to cut the price of a 50 kg bag of fertiliser to 11,000 CFA from 12,500<br />
CFA. Government spending on agriculture will rise from 10-15% of the budget with<br />
immediate effect.<br />
[Reuters 06/05/14]<br />
17
Senegal<br />
Senegal’s SODEFITEX Plans Diversification<br />
The Textile Fibres Development Corporation of Senegal [SODEFITEX] has announced that it is to diversify its activities and has<br />
developed a strategic plan ‘SODEFIX 2020’ to expand into other agricultural crops. SODEFITEX decision was based on cotton<br />
price volatility. The plan also seeks to enhance the quality of cotton fibre through investing in research.<br />
[Fibre2fashion 22/05/14]<br />
Tanzania<br />
Gatsby Trust To Review Cotton Program<br />
The Tanzania Gatsby Trust [TGT] has organized a cotton sector workshop to review the Cotton and Textile Development<br />
programme [CTDP] - an opportunity to review the sector and identify successes to be modeled by all in the sector. CTDP is<br />
funded by the Gatsby Charitable Foundation [GCF] and the UK’s Department for International Development [DFID]. The CTDP<br />
works under the auspices of the Tanzania Cotton Board [TCB] and with a wide range of public and private sector partners to<br />
improve the incomes and livelihoods from cotton of 360,000 small scale cotton farmers in the Lake Zone regions The aim is to<br />
sustainably transform the country’s cotton industry. The transformation includes major policy work on cotton pricing, licensing<br />
and regulation; the development of private markets for key agricultural-inputs; and the facilitation of sector-wide use of improved<br />
cotton seed. Gatsby has committed £10 million over 6-years whilst DFID have contributed nearly £6 million over 4-years.<br />
Significant co-funding agreements are also in place with NORAD and DEG.<br />
The quality of Tanzanian cotton has steadily fallen over the years. The sector needs to invest in its framers, providing them with<br />
high quality inputs, including improved seeds and a range of reliable pesticides, mechanised land preparation and planting and<br />
training. In the effort to address challenges in the sector, a committee commissioned by the government has recommended,<br />
among other interventions, contract farming. In implementing this model, there have been a number of challenges, including<br />
lack of proper understanding among stakeholders and lack of trust. Contract farming, which was approved by stakeholders in<br />
2010 and rolled out countrywide in 2011 after 3-years of planning and piloting, saw a production of 351,151 tons of cotton in<br />
the first season, the 2nd highest to be produced in the country. Very little finance was made available during the following season<br />
when farmers had to buy inputs on cash, resulting into reduced production at 246,767 tons. In 2012/13, cotton ranked 4th after<br />
tobacco, coffee and cashew nuts, contributing US$81.4 million to the economy.<br />
[Daily News 15/05/14 / Business Week 25/05/14]<br />
18
19<br />
COMMODITY NEWS<br />
FISH
Group Focus<br />
CMA CGM At ‘Seafood Expo Global’<br />
The 22nd Seafood Expo Global was held from May 6-8th in Brussels, Belgium where CMA CGM hosted a stand to present our<br />
expertise in this field. Seafood Expo Global is the largest global exhibition dedicated to the products of the sea with more than<br />
25,000 visitors from 140 countries and 1,700 exhibitors representing all sectors of the profession - fresh produce, canned, frozen,<br />
storage, treatment, equipment and services. For more information on our reefer service for fish and seafood contact your local CMA<br />
CGM / DELMAS agent.<br />
Namibia<br />
Over 100 Exhibitors At Crayfish Festival<br />
Over 100 companies showcased their products and services at the 7th Crayfish Festival in Lüderitz/. The 4-day event was held<br />
under the theme ‘Celebrating Crayfish in diversity’ and promoted trade, investment opportunities and exports.<br />
[Namibian 06/05/14]<br />
Senegal<br />
EU / Senegal Agree New Sustainable Fisheries Partnership<br />
The European Union and Senegal have agreed a new fisheries partnership following a successful 3rd round of talks in Dakar,<br />
Senegal, on the 24 and 25 April. The 5-year protocol fixes the fishing opportunities for EU vessels, the EU’s financial contribution,<br />
and the terms of support for the Senegalese fisheries sector. The new instrument allows 38 vessels targeting mainly tuna to once<br />
again operate in the Senegalese Exclusive Economic Zone [EEZ], subject to a compensation of €8,690,000 for the period of the<br />
agreement.<br />
[Fish Site 29/04/14]<br />
20
COMMODITY NEWS<br />
FOODSTUFFS<br />
Group Focus<br />
Malian Mangoes Shipped To France - Transit Times Key To Success<br />
CMA CGM / DELMAS has unloaded in Dunkirk an inaugural batch of 30 x 40’ reefers containing mangoes from Mali and Ivory<br />
Coast. While the ship was in operation at Dunkirk on the morning of May 2, the customer has requested a delivery the same day<br />
at Maasdjik in the Netherlands. Demonstrating our expertise, CMA CGM Logistics handled all operations to ensure same day<br />
delivery to the customer following phytosanitary controls and completing customs formalities.<br />
For more information on our reefer service and tailored equipment options view our website or contact your local CMA CGM / DELMAS agent:<br />
http://www.delmas.com/products-services/our-services/reefer<br />
General<br />
East Africa: EAC Probes Rice Import Duty Decision<br />
A decision by Rwanda and Uganda to impose 75% import duty on Tanzanian rice exports in contravention of East African<br />
<strong>Com</strong>munity [EAC] Customs Union Protocol is under scrutiny. Under EAC Customs Union, rice originating from Tanzania is<br />
supposed to attract no import duty in both Rwanda and Uganda. The EAC noted the countries are negotiating a settlement.<br />
Local rice producers are struggling to dispose of their commodity at a profit because the domestic market is still saturated with<br />
the product due to a bumper harvest and imports. Such arbitrary tariff hikes affect regional trade as defined by EA Customs<br />
Union Protocol.<br />
Early last year, the government endorsed a 60,000 MT of rice imports from Asian to offset an artificial deficit created by traders<br />
seeking to import the cheap commodity from Asia. After almost half of the rice imports entered the domestic market, local<br />
farmers denounced the move after prices plummeted by close to 50%. [KPL which works with over 20,000 smallholder farmers<br />
still has 1,000 tonnes of rice from the 2012 season and another 5,000 tonnes from last season which is struggling to sell in the<br />
domestic market.] The Agriculture Minister suspended rice imports in March 2013 following complaints from local producers<br />
and donors. The government had approved the imports to help lower prices as local rice farmers were accused of hoarding the<br />
commodity which forced prices to peak at over 2,000/- /kg and was feared to fuel inflation.<br />
[Daily News 23/03/14]<br />
Syngenta Establishes Africa’s First Seed Care Facility<br />
South Africa has become home to Africa’s first Seed Care Institute as agribusiness Syngenta opened its 11th research and<br />
development [R&D] facility, in Brits. The Africa Middle East [AME] Seed Care Institute, established at the company’s formulation,<br />
fill and packing plant, in the North West, aims to develop, test and protect seed technologies to develop diverse agro<br />
ecosystems, crop preferences and farming systems, while enhancing productivity. Meanwhile Syngenta’s ‘Good Growth Plan’<br />
seeks to increase the average productivity of major crops by 20% without using more land, water or inputs.<br />
[Engineering News 06/05/14]<br />
21
Guinea<br />
Guinea Will Invest US$21 Million In Crop Year <strong>2014</strong>-2015<br />
The Guinean Agriculture Minister, Jacqueline Sultan, announced US$ 21 million investment for the <strong>2014</strong>-2015 crop year for the<br />
acquisition of inputs and farm equipment to improve domestic rice production. Guinea currently imports 500,000 tonnes of rice<br />
p.a. A dependency that the country aims to reduce.<br />
[Ecofin 21/05/14]<br />
Kenya<br />
Kenchic To Invest In Poultry Processing Plant<br />
Kenyan company Kenchic, which specialises in the production of poultry will invest 350 million shillings in a poultry processing<br />
unit in Thika (Kiambu County). The unit will have a daily slaughter capacity of 30,000 chickens. Construction should last 2- years<br />
Sales of chickens and eggs in the Kenya generated 7 billion shilling in 2013, 9% more than the previous year. Kenchic services<br />
clients such as Steers, Galitos and KFC.<br />
[Ecofin 28/05/14]<br />
Madagascar<br />
Castel Beer Takes Control Of NBM Brewer<br />
The Castel Group has officially taken control the Nouvelle Brasserie de Madagascar [NBM]). The group which holds the<br />
Antananarivo refrigeration company [Star], will continue to operate its competitor brands as well as promote ‘Skol’, one of the<br />
leading products of NMB.<br />
[Ecofin 24/05/14]<br />
Rwanda<br />
Government Moves to Promote Rwanda’s Fruit & Vegetable Exports<br />
Plans aimed at widening Rwanda’s exports base and promoting<br />
agribusiness have gained pace after the government unveiled an<br />
initiative to attract investors into the horticulture sector.<br />
The government seeks a consultant to develop promotion<br />
materials for horticulture products, including pineapples, passion<br />
fruits and tree tomato with a view of attracting more private sector<br />
investments into agribusiness and improving access to agriculture<br />
development information. Other targeted crops are macadamia,<br />
chillies, French beans, fruits, vegetables, peas, tomatoes, nuts and<br />
eggplants.<br />
The consultancy will be funded by the World Bank. Currently,<br />
Rwanda’s fruit and vegetable exports are largely dominated by<br />
informal cross-border trade that accounts for 19% of Rwanda’s<br />
total exports.<br />
The country targets earnings of US$225m by 2017, up from<br />
US$20m presently. Rwanda’s main foreign exchange earners are<br />
coffee, tourism, minerals and tea.<br />
[New Times 07/05/14]<br />
22
COMMODITY NEWS<br />
FOODSTUFFS<br />
Senegal<br />
Onion Sector Booming In Senegal<br />
According to the Minister of Trade, Alioune Sarr, in 10 years Senegalese onion production has sprung from 40,000<br />
tons to 260,000. Production reaches 15,000 to 18,000 tons/month.. This places Senegal amongst the world’s<br />
main onion producing countries. The onion sector is present in over 14% of rural households. The Minister was<br />
present at the inauguration of a stocking and drying space in Darou Khoudoss.<br />
[Fresh Plaza 01/05/14]<br />
23
South Africa<br />
EU Citrus Ban Under Debate<br />
EU’s threat to ban imports of South African citrus infected by the black spot fungus is under debate. According to the South<br />
African government the fungus does not affect consumers, and scientists from both sides are still investigating whether it could<br />
infect European orchards. There is no evidence so far that it could. But last year, the EU intercepted more than 5-shipments of<br />
citrus with the black spot and had stopped all citrus imports from South Africa. Because that had happened near the end of the<br />
season, it had had little commercial impact. But it could have a major impact in the coming season, as South Africa is the largest<br />
exporter of citrus to the EU.<br />
[Business Report 05/05/14]<br />
Debate on Imported Frozen Chickens / Frozen Potato Chips<br />
Imports of frozen chickens and frozen potato chips from the EU are to be debated. South Africa has launched an anti-dumping<br />
inquiry into these imports. In 2008, South Africa exported €22 billion [R320bn] of goods to the EU and imported €20bn, earning a<br />
€2bn surplus. But in 2012, South Africa exported only €20bn to the EU, while imports from the EU increased to €25bn, creating<br />
a €5bn deficit for South Africa. European companies invested in South Africa had been making frozen chips with South African<br />
potatoes. But now South Africa was importing those chips. Meanwhile, frozen chicken imports had rocketed about a hundredfold,<br />
from about R3 million to R300m a year.<br />
[Business Report 05/05/14]<br />
Export Tax On Raw Materials<br />
Another difficult dossier was export taxes that South Africa was proposing to impose on raw materials. The EU has complained<br />
that these taxes are an unwarranted protective measure for local buyers of raw materials. The issue is being thrashed out as<br />
part of the protracted negotiations for a SADC-EU EPA. The EU’s interest was not in helping other countries develop resources,<br />
but about ensuring the EU was not deprived of access to raw materials. The proposed taxes were designed as an incentive to<br />
companies to invest in the beneficiation of raw materials in South Africa so they could export processed materials. The SADC<br />
EPA negotiations are the most difficult dossier of all between the EU and South Africa – as well as the other SADC members in<br />
the proposed EPA – Botswana, Namibia, Swaziland, Lesotho, Mozambique and Angola.<br />
[Business Report 05/05/14]<br />
Kerry Foods Opens R&D Centre In Durban<br />
The opening of a regional development and application centre in Durban, South Africa, signals a clear intent by Irish diary<br />
group Kerry Foods to ramp up its focus on the fast growing sub-Saharan African region. The creation of the centre follows<br />
2-acquisitions by Kerry in South Africa; in February 2012 Kerry bought FlavourCraft, a Durban-based company that specialises in<br />
flavours for meats, soups, sauces, dressings and savoury snacks in South Africa, Nigeria, Ghana and other key markets in West<br />
Africa. Then last March, Cape Town-based Orley Foods, a manufacturer of sweet ingredients such as chocolate products, syrups<br />
and ice cream coatings, became part of the Kerry Group.<br />
[Food Navigator 27/05/14]<br />
24
COMMODITY NEWS<br />
PALM OIL<br />
Sierra Leone<br />
Private Equity Firm Transforms Palm Oil Business<br />
With a capital injection from global investors, a long-abandoned palm oil plantation and mill in Daru, Sierra Leone, is expected<br />
to produce over 5,000 tons of palm oil in <strong>2014</strong>. Goldtree mill buys in fruit from over 5,000 outgrowers where it is working<br />
on significantly improving fruit yields and technical skills on the farms. Phatisa is the fund manager of the African Agriculture<br />
Fund [AAF], which in turn manages the Goldtree investment on behalf of multinational investment partners. The Goldtree<br />
palm oil plantation and mill was the first agri investment of AAF, made in 2011. Phatisa’s AAF is a private equity fund focused<br />
on businesses in agriculture and the food value chain. To date, it has committed investments in excess of US$100m in 12<br />
businesses across the continent, reaching from Sierra Leone in West Africa to Madagascar in far East Africa, and a further<br />
8-countries in between.<br />
With an investment injection of US$20m and ongoing support from Phatisa agri specialists, Goldtree has been completely<br />
transformed. It now has a mechanised, safe and hygienic processing mill supported by stores, a quality control laboratory,<br />
holding tanks and a fleet of vehicles. Annual crude palm oil output should rise to 18,000 tons, supplying domestic and regional<br />
markets.<br />
[Howwemadeitinafrica.com 06/05/14]<br />
25
COMMODITY NEWS<br />
SUGAR<br />
Ghana<br />
Omnicane To Invest US$250 Million In Ghanaian Sugar Production<br />
Mauritian sugar company Omnicane will invest US$250 million in a 100,000 T production unit in Northern Ghana. The agreement<br />
forms the basis for strengthening investment partnership in the agricultural sectors in both nations and correct imbalances in the<br />
Ghana’s import bill, which rose to US$17 billion in 2013 from US$ 11 billion in 2010.<br />
[Africa Report 27/05/14]<br />
Malawi<br />
Illovo’s Operations Decline 12%<br />
Illovo’s Malawian subsidiary saw profit from operations decline 12% to<br />
29-billion Malawian kwacha [R762m], with headline earnings per share<br />
at 2,6<strong>37</strong> tambala from 2,930 tambala in 2013. During the 2013-14<br />
season, overall sugar cane production amounted to 2.4-million tons.<br />
The group’s factories at Nchalo and Dwangwa were affected by<br />
unseasonal inclement weather and experienced plant operational<br />
breakdowns during the crushing period. Despite these challenges,<br />
overall sugar production totaled 289,000 tons for the season. Sugar<br />
sales for the year were just over 290,000 tons, with the domestic<br />
market accounting for 58% of this.<br />
The balance was exported to Europe, North America and the region.<br />
Illovo Sugar continues to focus on its operations in the rest of the<br />
continent to offset flagging production prospects in South Africa.<br />
Its Zambian and Malawian units account for more than 70% of its<br />
operating profit.<br />
[Business Day 13/05/14]<br />
Nigeria<br />
Dangote Sugar To Produce 2-Million Tonnes Per Annum<br />
The Dangote Sugar Refinery [DSR] aims at producing 1.5-2 million tonnes of sugar per annum from locally grown sugar cane<br />
within the next 5-10 years. It disclosed this at the company’s 8th Annual General Meeting [AGM] following the Government’s<br />
National Sugar Master Plan, which has prompted the company to begin its own development plan. The plan has been structured<br />
to include an increased focus on backward integration project. Dangote has acquired some 200,000 ha of land to meet the<br />
development plan to be used for the development of sugar cane plantations and construction of modern sugar processing<br />
factories.<br />
[Nigerian Tribune 28/05/14]<br />
South Africa<br />
Sugar Workers Plan First Strike for 17 Years<br />
About 5,500 sugar workers in South Africa went on strike demanding an 11% increase in pay, in the first industry-wide stoppage<br />
since 1997. Employers including Illovo Sugar Ltd. and Tongaat Hulett Ltd. Africa’s two biggest producers, have offered raises of<br />
8.5%, meaning the two sides are relatively close.<br />
[Bloomberg 26/05/14]<br />
27
Tanzania<br />
Tongaat Hulett And Illovo Sugar See Revenue Increases<br />
Fortunately for Tongaat Hulett and Illovo Sugar consumption of sugar continues to increase. Recently implemented tariff<br />
protection in South Africa and in Zimbabwe will also help future earnings. The government of Tanzania, where Illovo has significant<br />
investment, is also considering tariff protection mechanisms. Tongaat Hulett’s total sugar production in the year to March grew<br />
by 170 000 tons to 1.42m tons and it predicts production will grow to 1.8m tons in 4-years. Illovo saw production increase by 84<br />
000 tons to 1.83m tons.<br />
But sugar is sold on global market at prices far below Southern Africa’s, knocking export income just as exports tripled and both<br />
companies’ earnings were affected. Tongaat notched up a 9% revenue increase to R15.7bn, translating into an 11% increase<br />
in operating profit to R2.3bn and a 3% hike in HEPS of 978.9c. Illovo increased revenue 20% to R13.2bn, generated almost-flat<br />
operating profit of R1.8bn that nudged diluted HEPS up 4.3% to 194c.<br />
In the case of Tongaat, operating profits in Zimbabwe and Mozambique fell dramatically as the local operations were forced<br />
to export surplus production. In South Africa, earnings benefited from a 30% increase in volume while costs were limited to<br />
10%. Illovo saw its operating margin reduced from 17.2% to 14.3% as a result of cheap sugar imports. Almost 70% of Illovo’s<br />
operating profit was generated from cane production, up from 55% last year. Cane growing generated 21%, while downstream<br />
production and power co-generation generated 9% of profits, up from 5%. Its Zambian unit declined 4% to 303.2-million kwacha<br />
[R482m] for the full year ended March 31.<br />
Both companies are increasing their efforts to improve downstream production. In the case of Tongaat the starch business is<br />
already generating substantial profits. In addition both ethanol and co-generation can be highly profitable. Growth in Illovo’s<br />
revenues was underpinned by improved downstream furfural and ethanol sales. llovo completed the construction of its alcohol<br />
distillery in Tanzania and the revenue will provide diversity to the <strong>2014</strong>/15 earnings. Tongaat’s results were boosted by the sale of<br />
land, generating operating profit of R1.08 billion.<br />
[Citizen 28/05/14]<br />
28
COMMODITY NEWS<br />
SUGAR<br />
Government To Introduce Bulk<br />
Sugar Procurement System<br />
The government is contemplating replacing the current sugar<br />
importation system by introducing a bulk procurement system<br />
in case there is shortage arising from closure or dysfunction<br />
of factories. Stakeholders have agreed on the matter and the<br />
process is underway to replace the current system.<br />
According to the Sugar Board of Tanzania [SBT] the current<br />
system of importation involves too many traders and has too<br />
many challenges. Asked if the board plans to set indicative<br />
price for sugar in order to make the product stable SBT<br />
noted that it may be difficult due to the nature of the market<br />
economy.<br />
On sugar smuggling, agencies are mandated to undertake<br />
checks on the borders and have been working hand in hand<br />
to ensure that the product does not enter the country illegally.<br />
Recently, revenue collecting authorities reported the capture<br />
of smuggled sugar in Mbeya and Morogoro regions. The main<br />
challenge are porous borders especially along the coastal line<br />
and at the borders with Malawi and Zambia.<br />
Last year Tanzania imported 50,000 MT of sugar to plug<br />
a deficit that had pushed up the price of the commodity.<br />
Currently, the retail cost of sugar in the country stands at<br />
between 2,000/- and 2,400/- up from 1,800/- last year.<br />
During the rainy season most sugar mills in Tanzania close<br />
down business causing sugar shortage.<br />
Tanzania’s annual sugar consumption stands at 480,000 MT<br />
but the country’s main producers - Tanganyika Plantation<br />
<strong>Com</strong>pany [TPC], Kilombero Sugar <strong>Com</strong>pany Limited in<br />
Morogoro Region, Mtibwa Sugar Estates also in Morogoro<br />
and Kagera Sugar Limited in Kagera Region - only manage to<br />
produce an average of 400,000 MT.<br />
[The Guardian 26/05/14]<br />
US$550m Tanzania Ethanol Venture<br />
Agro EcoEnergy [Tanzania] Limited, a subsidiary of a Swedish<br />
based firm, has invested US$550 million in sugarcane farming<br />
as part of a power and ethanol project. Agro EcoEnergy has<br />
already set up a special purpose project company, Bagamoyo<br />
EcoEnergy to develop a modern sugar cane plantation and<br />
factory producing sugar, ethanol and power for the Tanzanian<br />
market.<br />
The project will produce 130,000 MT of sugar pa. with over<br />
1,500 sugarcane outgrowers in Bagamoyo in the Coast<br />
Region earning around US$18 million annually when the<br />
project takes off. The Southern Agriculture Growth Corridor of<br />
Tanzania [SAGCOT] is advising the project.<br />
Launched at World Economic Forum Africa in 2010, SAGCOT<br />
is a public-private partnership that aims to boost agricultural<br />
productivity in Tanzania and the wider region, and thereby<br />
achieve the country’s agricultural strategy.<br />
[Daily News 09/05/14]<br />
29
COMMODITY NEWS<br />
TEA<br />
General<br />
Black Tea Production Falls<br />
Global black tea production so far this calendar has dropped by 6.89% over the same period a year ago. The output fell to<br />
247.95 million kg from 266.30 mkg. This fall of 18.35 mkg is due to the fall of production in Sri Lanka, Kenya and Uganda.<br />
Adverse weather was said to be the cause for lower production in different countries. Weather has since improved and this<br />
month, most tea plantations have received showers.<br />
[Business Line 16/05/14]<br />
Country<br />
Output <strong>2014</strong> Q1/2<br />
Million kg<br />
Output 2013 Q1/2<br />
Million kg<br />
Sri Lanka 73.39 80.29<br />
Kenya 112.08 117.26<br />
Uganda 4.03 14.56<br />
South India 30.96 31.44<br />
North India 4.97 4.34<br />
30
COMMODITY NEWS<br />
TEA<br />
Kenya<br />
Top Tea Prices Creep Up At Auction<br />
The highest price for top-grade Kenyan tea edged up to US$3.08 per kg at the latest auction from US$3.06 per kg at the<br />
previous sale noted Tea Brokers East Africa. Kenya is the world’s leading exporter of black tea. The crop is a top foreign<br />
exchange earner for Kenya. The bulk of the tea offered at the Mombasa auction is from Kenya, but it also sells tea from Uganda,<br />
Tanzania, Rwanda, Burundi and other regional producers.<br />
[Reuters 28/05/14]<br />
Auction 27th May 20th May 13th May 6th May<br />
Best Broken Pekoe<br />
Ones [BP1s] TEABP1-<br />
BEST-KE<br />
$2.18-3.08 / kg $2.10-3.06 / kg US$2.10-2.90 / kg US$2.15-3.04 / kg<br />
Best Brighter Pekoe<br />
Fanning Ones [PF1s]<br />
TEAPF1-BEST-KE<br />
Not Sold 12.98% of 168,216<br />
packages / 10.88<br />
million kgs - on offer<br />
$2.21-2.72 / kg $2.34-2.76 / kg US$2.22-2.62 / kg US$2.18-2.72 / kg<br />
15.69% of 168,780<br />
packages / 10.92<br />
million kgs on offer<br />
13.38 % of 164,212<br />
packages / 10.55<br />
million kgs on offer<br />
13.8% of 138,901<br />
packages on offer<br />
Tea Gets Major Boost In EU Market<br />
Kenyan tea is set for a major boost in the European market if an initiative by a Dutch imports agency is implemented. This follows<br />
efforts by the Centre for Promotion of Imports [CBI] from developing countries, an arm of the Ministry of Foreign Affairs of The<br />
Netherlands, to improve skills of Kenyan agricultural agencies and stakeholders in the tea sector.<br />
The CBI event has for the first time brought together Kenyan tea growers and exporters for a 3-day training workshop in The<br />
Hague, aimed at marketing branded Kenyan tea in the European Union. Kenyan participants attending included the Tea Research<br />
Foundation of Kenya, Tea Board of Kenya, Ministry of Agriculture and Kenya Tea Packers. Purple cloned tea offers a good<br />
opportunity to develop a wide range of products for the EU market requirements.<br />
[Standard Digital 23/05/14]<br />
Tea Firms Look for Markets<br />
Tea companies in Nandi are looking for a direct market abroad following the decline of prices. The companies have traditionally<br />
been selling their Black Tea through the Mombasa Auction under the control of leading brokerage firms and dominated by Kenya<br />
Tea Development Agency [KTDA].<br />
Tea companies have been trading accusations over the poor tea prices, with a number of multi-national firms blaming KTDA for<br />
flooded the market with their products after hoarding a huge stock for speculation purposes. The crop production has increased<br />
by 30% nationally due to good rains leading to oversupply. Meanwhile the market for black tea had seriously fallen due to political<br />
instabilities in some of their key markets - Egypt, Pakistan, Afghanistan, Yemen and Syria.<br />
[The Star 06/05/14]<br />
KTDA Urges State to Supply Cheap Fertiliser<br />
The Kenya Tea Development Authority [KTDA] has urged the government to supply tea farmers with subsidized fertiliser noting<br />
the current price of Sh2,300 / 50kg bag was too expensive. The authority has procured 60,000 MT of fertiliser, which is normally<br />
given as credit to farmers and later deducted from the tea bonus in November.<br />
[The Star 29/04/14]<br />
31
Kericho To Invest Sh300 Million In New Tea Factory<br />
Kericho county is looking to set up tea factory on its 450-acre Kabianga tea farm at an estimated Sh300 million.<br />
The county is conducting feasibility studies, Presently, the tea is processed at the nearby Momul Factory owned by<br />
the Kenya Tea Development Agency. The plans come at a time the Ministry of Agriculture is formulating a ‘national<br />
tea policy’ to address concerns and challenges in the industry. The policy will seek solutions to sustain production<br />
of high quality tea and reduce the cost of production, processing and marketing. The policy will also look into tea<br />
trade and value addition. The tea sector is faced with challenges that include declining prices, high production<br />
cost, climate change, narrow market outlets and limited diversification and value addition. Kenya earned Sh114.5<br />
billion from tea exports, more than 5-fold the Sh22 billion recorded from domestic sales in 2013.<br />
[The Star 12/05/14]<br />
32
COMMODITY NEWS<br />
TIMBER<br />
General<br />
EU Tropical Log Imports Down 54% To End February <strong>2014</strong><br />
EU imports of tropical hardwood logs in the<br />
first 2-months of <strong>2014</strong> were 18,454 m3, 54%<br />
less than the same period the previous year.<br />
Imports declined from all the main African<br />
supplying countries.<br />
Longer term monthly data shows that after a<br />
brief spike in early summer 2013, EU imports<br />
of tropical hardwood logs resumed their<br />
long term decline between August 2013 and<br />
February <strong>2014</strong>.<br />
EU imports of logs from Equatorial Guinea<br />
only resumed in the second half of last year<br />
and were therefore up sharply in January to<br />
February <strong>2014</strong> compared to the same period<br />
in 2013.<br />
[ITTO 01/05/14]<br />
EU Imports Of Sawn Tropical Hardwood Fall Sharply<br />
EU imports of tropical sawn hardwood in the<br />
first 2-months of <strong>2014</strong> were 147,326 m3, 8%<br />
down on the same period in 2013. Imports<br />
fell from all 3-of the main supply countries<br />
including Cameroon, Malaysia and Brazil.<br />
However, imports increased from some<br />
smaller suppliers, including Gabon, Ivory<br />
Coast, and the Republic of Congo.<br />
EU imports of tropical sawn hardwood were<br />
low but stable for most of 2013, but trended<br />
down sharply between November 2013 and<br />
February <strong>2014</strong>. The low level of EU imports<br />
from Cameroon in early <strong>2014</strong> is partly due to<br />
short-term operational problems at the port<br />
of Douala and volumes are likely to rise in<br />
the spring as these problems are overcome.<br />
However, European buyers are also struggling<br />
to obtain sufficient volumes of preferred<br />
species such as sapele and sipo as more<br />
is now being sold into the Asian and U.S.<br />
markets.<br />
[ITTO 15/05/14]<br />
33
French Market For Logs <strong>Com</strong>es To Life<br />
The flow of log exports is at a fairly normal to high pace and, as always, okoume is the top species for Asian destinations. Buyers<br />
for the Chinese market have resumed purchases of okan logs. Producers report a modest improvement in interest in logs from<br />
buyers in France but across the EU the volumes being imported are much lower than in the past as there are now fewer sawmills<br />
in the EU processing tropical logs. As expected, log prices for the limited number of premium species have moved higher. At<br />
present there are two main drivers of log prices one is the firming demand for sawnwood in major markets the other the limited<br />
availability of the prime species. Demand for sapele and sipo sawnwood is particularly strong at present and demand outstrips<br />
the ability of mills to secure logs.<br />
[ITTO 15/05/14]<br />
Producers Anticipate Firmer Prices For ‘Redwoods’<br />
Recent price rises for the most frequently demanded timbers have been consolidated as demand is now as firmer, a term<br />
that has not been used by producers in the region for several years. Producers are convinced from current developments that<br />
demand will remain firm stretching into the third quarter of the year. Producers anticipate firmer prices for the premium red<br />
timbers. Exporters in Cameroon are particularly well placed and order book positions are said to be extending into the last quarter<br />
of the year. The biggest problem faced by producers is finding sufficient logs to meet shipping schedules. Cameroon log exports,<br />
limited to only secondary species, are reported very strong and this level of demand is supporting overall market prices.<br />
[ITTO 01/05/14]<br />
Sapele Millers Fall Behind On Shipments<br />
Demand for sapele sawnwood substantially higher than supply. Some producers say they are falling behind with deliveries and<br />
are still contracted to supply orders taken at previous lower prices. The current higher demand is spread over several markets<br />
including some European countries and the USA. Demand in Asian and Middle East markets has been consistent over the past<br />
months and producers report good prospects in China, Vietnam and India.<br />
[ITTO 01/05/14]<br />
German Tropical Timber Importers Concerned About Availability<br />
The German trade journal EUWID reports rising concern in Germany about lack of availability of tropical hardwoods. There has<br />
been “satisfactory to good” demand for wood products in Germany since the start of <strong>2014</strong>. However in the case of imported<br />
products the main concern this year has been problems and restrictions on the procurement side. Supplies available to European<br />
buyers are severely restricted, especially in Africa, primarily attributable to the further increase in buying competition from Chinese<br />
companies. Also the FLEGT programme and EU Timber Regulation are now restricting procurement possibilities for European<br />
companies in Africa. The VPA process has contributed to further harvesting restrictions in supplier countries while EUTR has<br />
created uncertainty over the reliability of legality documentation issued by some African governments.<br />
[EUWID 30/04/14]<br />
34
COMMODITY NEWS<br />
TIMBER<br />
Revival Of Tropical Hardwood<br />
Market Promotion In Europe<br />
The EU Sustainable Tropical Timber Coalition [STTC] was<br />
launched in November last year. Since then it has acquired<br />
new members to expand the network of private, public<br />
and civil society players committed to promoting European<br />
demand for certified and FLEGT licensed timber products.<br />
It has also constituted several working groups which are<br />
developing and coordinating a communications and technical<br />
program.<br />
STTC has a target to contribute to the achievement of<br />
sustainable management of up to 10 million hectares of<br />
tropical forest by 2015 by making the business case for<br />
certification more attractive for concession holders.<br />
“<br />
The aim is to accelerate demand<br />
for certified or licensed timber<br />
from sustainably managed tropical<br />
forests to the tipping point of 30%<br />
and to put a halt to declining use<br />
of tropical timber in front-running<br />
countries in the EU, through<br />
creating momentum in legality and<br />
sustainability efforts.<br />
”<br />
EU Sustainable Tropical Timber Coalition [STTC]<br />
Discussion has highlighted the need to focus on<br />
communication of technical qualities of tropical hardwood as<br />
well as the legality and sustainability issues.<br />
The need to build on existing communication tools has<br />
also been emphasised, for example the new technical<br />
procurement guide for African species now being developed<br />
by ATIBT and the database of lesser known wood species<br />
[LKWS] properties and applications now being developed by<br />
FSC in the Netherlands and Denmark.<br />
STTC now plans to set up meetings between relevant national<br />
government authorities in the EU to co-ordinate efforts in<br />
support of STTC goals.<br />
Efforts are also being made to facilitate business encounters<br />
in the most important EU countries for tropical timber in<br />
Europe identified as the UK, Netherlands, Denmark, Germany,<br />
Belgium, France, Italy, and Spain.<br />
Business encounters will focus first of all on a few big event<br />
notably BAU and Interzum in Germany, Carrefour du Bois in<br />
France and the Timber Expo in the UK.<br />
A large general European STTC meeting is also proposed,<br />
likely to be held in January 2015.<br />
[ITTO 01/05/14]<br />
35
Cameroon<br />
Port Delays Reported In Cameroon<br />
Reports suggest shipments of logs and sawnwood from Cameroon are being delayed because the contract with the port<br />
handling company is yet to be renewed. Log and sawnwood stocks have built up in Cameroon and there are reports of long<br />
delays in shipments. Exporters are concerned that some of the lighter density timbers may deteriorate when held for long<br />
periods sealed in containers. Analysts say it may take some considerable time to clear the back-log of cargo. Exporters now face<br />
stringent container inspections in Cameroon and Gabon as the authorities are determined to crack down on those attempting to<br />
ship banned species mixed with behind other timbers. The Middle East market continues to be strong and<br />
producers say prices are stable and order book positions extend to September.<br />
[ITTO 15/05/14]<br />
Congo<br />
Sapele From Congo Now <strong>Com</strong>ing Onto The Market<br />
New sawmills have now started production in Northern Congo Brazzaville and are milling mainly sapele for shipment out of<br />
Douala or Point Noire. Shipment from either port involves very long distance road haulage. While log prices are rising, sawnwood<br />
prices are currently unchanged having stabilised following the steep rises for the prime species during April.<br />
[ITTO 15/05/14]<br />
Mills Under Construction In Congo<br />
<strong>Com</strong>panies recently granted forest concessions in Congo Brazzaville are now establishing processing plants, a condition of the<br />
concession agreement. The concession agreement allows for limited log export during the mill construction phase and exporters<br />
of okoume logs are very busy. Overall, export market prospects are expected to remain good and prices firm with likelihood of<br />
some further increase over the coming months for the most popular redwoods.<br />
[ITTO 01/05/14]<br />
Gabon<br />
Delayed Reimbursement Of VAT Hurting Timber <strong>Com</strong>panies In Gabon<br />
Producers in Gabon report that, in spite of government assurances, repayments of the taxes sur la valeur ajoutee [value added<br />
tax] are more than 1-year overdue and this is putting a considerable financial burden on timber exporters.<br />
[ITTO 01/05/14]<br />
36
COMMODITY NEWS<br />
TIMBER<br />
Ghana<br />
Ghana To Start Issuing Timber Validity License<br />
The issuance of TVL formed part of the EU Voluntary Partnership Agreement [VPA] designed to stop the export of illegal timber to<br />
the EU markets of which Ghana is a signatory. Ghana has initiated several processes towards full compliance with the agreement<br />
since signing the agreement in 2009. The issuance of the license would pave the way for Ghanaian companies to export legally<br />
harvested timber to the EU markets. The Forest <strong>Com</strong>mission [FC] has put in place an automated Legality Assurance System<br />
[LAS] to help track timber as it moves through the various stages of production to ensure that it is legal. Data would help to<br />
manage and regulate the forest and forest industry.<br />
[Ghanaweb 24/05/14]<br />
On Track To Trade FLEGT Licensed Timber<br />
A meeting in support of the Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement [FLEGT-VPA]<br />
between Ghana and the European Union was convened by the EU Delegation to Ghana and the Forestry <strong>Com</strong>mission of Ghana.<br />
The event ensured the effective collaboration and coordination between the organisations managing these projects. Ghana<br />
became the first country to agree a VPA with the EU which will result in systems to verify the legality of timber for exports and to<br />
strengthen forest governance.<br />
The EU is Ghana largest market for wood products. By agreeing the VPA Ghana has committed to dealing with the challenges<br />
of illegal logging and its associated economic, social and environmental costs. Over the past 5-years, the Forestry <strong>Com</strong>mission<br />
has been working to put in place the systems and reforms necessary to implement the VPA. After considerable progress with the<br />
development of the system to license legal timber Ghana is on track to soon be shipping FLEGT licensed wood products.<br />
[ITTO 15/05/14]<br />
Signing EPA Will Ensure <strong>Com</strong>petiveness Of Exporters<br />
Ghanas Minister of Trade and Industry has said that signing the ECOWAS-EU Economic Partnership Agreement is essential as<br />
not signing would seriously undermine export opportunities for the main commodities such as cocoa, gold, oil and timber as well<br />
as for nontraditional products. The EU is Ghanas largest export market, accounting for more than half of all exports and failure to<br />
seize the opportunity for improved market access would result in exporters losing competitiveness in the EU market.<br />
[ITTO 15/05/14]<br />
<strong>37</strong>
Bold Initiative To Strengthen Ghana Forestry <strong>Com</strong>mission<br />
To improve oversight of the sector the Forestry <strong>Com</strong>mission [FC] an 11-member committee has been tasked with recommending<br />
ways in which the FC can better ensure the it its functions in a credible, transparent and independent manner. Inaugurating the<br />
committee, known as the Timber Validation <strong>Com</strong>mittee [TVC] the Minister for Lands and Natural Resources, Alhaji Inusah Fuseini,<br />
lamented the inadequate and weak laws that have been the root cause of illegal forestry operations. The Minister tasked the TVC<br />
with recommending additional measures to improve the verification and validation of licenses and for addressing complaints in<br />
ways that eliminate the risk of any outside interference or influence. The committee is also responsible to come up with ways to<br />
inform consumers of their rights, obligations and understanding of the functioning of the Legality Assurance System [LAS].<br />
[ITTO 01/05/14]<br />
State Loses US$16 Million Of Stumpage Values<br />
A study shows that the state from 2003-13 lost US$16 million of stumpage value of timber due to the inability of the Forestry<br />
<strong>Com</strong>mission to review and publish new fees within the period. The stumpage fees, which is the price a firm pays for the right to<br />
harvest timber from a given land base, has not been reviewed since July 2003 until March this year. On March 1, the Forestry<br />
<strong>Com</strong>mission [FC] reviewed the stumpage fees, which subsequently would be reviewed quarterly to reflect prevailing economic<br />
conditions at both the local and international markets. The study by Forest <strong>Watch</strong> Ghana [FWG] noted the FC did not comply with<br />
legislative instrument [LI] 1649’s requirement that stumpage fees be determined partly in relation to the free-on-board price of<br />
air-dried lumber. Failure to reform timber pricing had resulted in continued over-harvesting and closure of more than two-thirds of<br />
the industry towards the end of 2000s. The study called for the repositioning of the Timber Industry Development Division of the<br />
FC, to place it one step ahead of the timber industry. It urged the FC to begin to implement quarterly reviews of stumpage fees<br />
indexed to both the free-on-board value of the air-dried lumber and quarterly average inflation.<br />
[Ghanaweb 10/05/14]<br />
Oda Timber Firms Reeling From High Production Cost<br />
More than 10 wood processing companies at Akyem Oda and its environs in the Birim Central Municipality are on the verge of<br />
collapse due to the high cost of production. Birim Wood <strong>Com</strong>plex has retrenched more than half of its work force whilst East<br />
Forest Products Limited [EPL] and K.G Wood <strong>Com</strong>pany Limited have laid off hundreds of employees. Factors include high<br />
electricity tariffs, 400% increase in stamp fees charged this year by the Forestry <strong>Com</strong>mission, high fuel prices coupled with high<br />
cost of tyres and vehicle spare parts, and high taxes.<br />
[Ghanaweb 26/05/14]<br />
38
COMMODITY NEWS<br />
TOBACCO<br />
Kenya<br />
BAT Kenya Want Uniform Taxation On Tobacco<br />
British American Tobacco [BAT] Kenya has called for the simplification of the taxation on cigarettes. In addition to<br />
16% VAT, BAT carries an excise duty of 35% of the retail price.<br />
[Ecofin 29/05/14]<br />
Malawi<br />
Tobacco Sales Breach US$80m Level<br />
Malawi tobacco sales have hit over US$80 million in the first 8-weeks of trading on the country’s auction floors.<br />
Auction Holdings Limited [AHL] said in its latest market report that more than 54.3 million kg of the golden leaf<br />
were sold during the past 2-months, consisting of 52.1 million kg of burley and just over 2-million kg of flue-cured<br />
tobacco. According to the Tobacco Control <strong>Com</strong>mission sales are progressing well at the market, with the crop<br />
continuing to attract good prices. Malawi’s tobacco production for the 2013/14 season is estimated at 194 million<br />
kg for all types of tobacco against last year’s 169 million kg.<br />
[APA 22/05/14]<br />
39