GROUP CASE STUDY

PERISHABLE SHIPMENT SOLUTIONS: SEAFOOD/FROZEN FISH

Full Story On Page 3

AFRICACOM-WATCH

Cocoa Price Hike To Boost Ghana Output

ISSUE 43 | DECEMBER 2014

Uganda Coffee Exports Bolstered With New Trees

Tanzania: Bulk Sugar Procurement Starts Soon

9 13 27

Cocoa Price Hike To Boost Ghana Output

9

GROUP CASE STUDY: Perishable Shipment Solutions: Seafood/Frozen Fish

3

13

27

Uganda Coffee Exports Bolstered With 300 Million New Trees

Tanzania: Bulk Sugar Procurement Starts Soon

1

AFRICACOM-WATCH

ISSUE 43 | DECEMBER 2014

Contents03 / Group Case Study

05 / Cashew, Groundnut & Shea

07 / Cassava

07 / Cocoa

11 / Coffee

14 / Cotton, Textiles & Leather Goods

17 / Fish

21 / Foodstuffs & Flowers

23 / Palm & Edible Oil

24 / Sugar

28 / Tea

29 / Timber

32 / Tobacco

Top Stories

News Headlines By RegionWestern AfricaAngola: Angolan, Spanish & Portuguese Companies Sign Fisheries Agreement / 1st International Fisheries and Aquaculture FairCameroon: Cocoa Grinder Purchases Reach 13,144 T By End-October / 21,508T Exported In First 2-Months Of 2014-2015 Cocoa Season / Genetically Modified Cotton Possible Within 3-Years / IDB Provides 8.5 Billion FCFA In Financing For Cotton Season / Cotton Risk Management Fund Launched / Cameroon Projects Weak Cotton, Soya Production / Socapalm’s Sales Down 18% In H1 2014 / CFA 15 Billion To Modernize Vegetable Oil Plants / Douala Lumber Yard Investment / Logs Still Stockpiled In Douala PortCongo: New Logging Concession In Northern ProvincesCote d’Ivoire: Cocoa Arrivals Revised Upward To 1,742,878 T For 2013-14 / Cocoa Port Arrivals Up Slightly By November 2 / Premium Drops As New Cocoa Season Begins / Ivory Coast Targets Coffee Production Of 400,000T By 2020Gabon: Tough Conditions Get Worse For Gabon MillersGhana: Ghana To Host The First African Cosmetics Exhibition / Government Considers Second Line Cocoa Bonds / Cocoa Price Hike To Boost Ghana Output / Main Cocoa Crop Purchases At 87,254T By Oct. 23 / Timber Procurement Set New Guidelines / Wood Product Exports Up 15%Guinea Bissau: EU, Guinea-Bissau Fisheries AgreementMali: Mali Trims Cotton Forecast On Erratic WeatherNigeria: US$2.2 Million For Cassava Development / Government Targets 800 Million MT Of Cocoa / Inaugurates Biggest Oil Refinery In Ibadan / Sugar Policy Saves Over US$191 Billion / Nigeria On Track For Sugar Self-SufficiencySenegal: EU-Senegal Sign FPA

Eastern Africa

Regional: TBS Harmonises Honey Standards Within EA RegionEthiopia: 3rd International Ethiopian Coffee Conference / Ethiopia Targets US$1 Billion Coffee Yield / Horizon Coffee Plantation To Double RevenueKenya: Coffee Fund May Seek More Government Financing / Nestle Deal to Improve Coffee Yield / US Targets East Africa’s Textile Market With US$65 Million Trade Hub / EU Approves Vetted GMO Foods / EU Duty Approval To Come Just In Time For Rose Market / Kenya Imports 10,000 MT Of Sugar From Uganda / Tea Industry In Decline / Tea Firms Warn Of Poor Annual Earnings / Nandi Blocks Tea Tax After Public OutcryMauritius: Princes, Thon Des Mascareignes Merge Mauritius Tuna OperationsMozambique: Mozambique To Sell 80,000 Tons Of Cashews This Year / Southwest Indian Ocean Fisheries Commission Moved To Mozambique / Malawi And Mozambique Sign Fisheries MoUTanzania: Cashew Processing Factories To Be Constructed / Arabica Coffee Prices Edge Higher On Tight Supply / Poor Cotton Harvest Leads To Drop In Ginning Facilities / Cotton Sector Revival Underway / Government Revokes Sugar Import Licences / Bulk Sugar Procurement Starts SoonUganda: Coffee Exports Rise 9% Yr-Yr In October / Coffee Exports Bolstered With 300 Million New Trees / 2014-15 Coffee Exports Static On Earlier Crop Loss

Southern AfricaNamibia: Mackerel Factory Opens / Walvis Bay Cold StorageSouth Africa: South Africa Resumes Seafood Exports to Russia / Tongaat Hulett H1 Profit Up On Higher Sugar Import TariffsSwaiziland: Ubombo Sugar Produced 35% Of Swaziland’s Sugar / Sugar Board Of Tanzania In The CountryZimbabwe: Zimtrade To Revive Textile Industry / Zimbabwe To Impose Duty On Sugar Import / Banks Offer 60% Funding For Tobacco Farming

p Slightly By on Of 400,000T

e Cocoact. 23 / Timber

2

Website: www.delmas.comEmail: lhv.marketing@delmas.netTweet: @DelmasWeDeliver

CMA CGM Marseille Head Offi ce4, Quai d’Arenc 13235 Marseille cedex 02 France

Tel : +33 (0)4 88 91 90 00

www.cmacgm.com

Disclaimer of LiabilityCMA CGM / DELMAS make every effort to provide and maintain usable,

and timely information in this report. No responsibility is accepted for

the accuracy, completeness, or relevance to the user’s purpose, of

the information. Accordingly Delmas denies any liability for any direct,

indirect or consequential loss or damage suffered by any person as a

result of relying on any published information. Conclusions drawn from,

or actions undertaken on the basis of, such data and information are the

sole responsibility of the reader.

THE AFRICAN COMMODITY REPORTBrought to you by CMA CGM / DELMAS Marketing

Rachel Bennett Dominic Rawle

Perishable Shipment Solutions: Seafood/Frozen FishCMA CGM / DELMAS offer years of experience in transporting your seafood efficiently. Whether you’re shipping fresh, chilled or frozen seafood, our temperature-controlled reefer containers, refrigerated warehouse storage and special handling will ensure your shipment arrives at destination in the optimum condition. Furthermore we offer a specialist reefer desk to offer customers total refrigerated transport solutions. The desk provides one entry point for both our customers and our agency network, offering expertise on reefer business and the African market.

This month we interview Jean Brieuc CHEDEVILLE, Deputy Managing Director of Delmas Senegal about this unique service.

What specialisms does the Dry Port of Dakar offer to Group customers?The CMA CGM Group owns and operates 2-logistics platforms in Dakar. The Terminal Conteneurs Dakar [TCD1] operated since February 2011 and Terminal Conteneurs Dakar 2 [TCD2] launched in February this year. The platforms are located close to both the fishing quay and the container terminal and offer a brand new reefer area with 32 secured reefer plugs [64 in total], washing and cleaning areas and a weighbridge. At each platform we have a team of fully experienced technicians available and a stuffing advisor/surveyor agent is located on site at the fishing quay. Ideally situated close to the main road and railway routes, both platforms offer a fast connection to CMA CGM multimodal transport network. Surrounding walls and 24/7 surveillance offer cargo safety at all times. Furthermore the Group has a fleet of owned trucks thereby allowing a service that is both flexible and reactive to the transport needs of such specialist commodities and to our clients’ commercial activities in Senegal. This dovetails to reinforce our leading position in this strong growing market.

What refrigerated equipment is available?The CMA CGM Group own a wide range of reefers containers of various sizes and types. In all it handles over 180,000 reefers TEU within a container fleet of 2.5 million units. Furthermore the Group has on order 7,000 new generation & low consumption 40’RH units. We can therefore offer reliable deep freezing units which provide a range of cargo temperature. We have a solution for each type of perishable goods. As #1 this year for Senegalese seafood exports we expect to reach 5,000 TEU exported out of Dakar.

Can you explain the handling and stuffing process?Frozen fish requires particular vigilance. Our handling and stuffing process and freezing methods are fully compliant with increasingly strict environmental and sanitary regulations. For example our centralized reefer desk located in the Groups Head Office [HO] has focused on a strict stuffing process for frozen fish outlining several measures to optimize air flow inside the box and thanks to the expertise of our inland container depot [TCD] we have developed a task force to optimize the freezing chain and reduce handling and stuffing time. Fish that is discharged from seiners [haulage fishing nets AKA dragnets] are immediately stuffed. Once sealed, units trucked from the fishing port are weighed and plugged within our reefer ICD which perform a comprehensive technical check. Refrigerated units are also monitored on a daily basis by our technical team before being shunted to the containers terminal and shipped to various destinations.

What measurements are undertaken while the unit is in transit?It is essential to maintain the freezing chain during cargo handling as this is the only way to maintain the storage life and quality of the fish. Temperature measurements must be performed and recorded at regular intervals. Our HO closely follow up all transshipment operations until the final discharge port and then pass the helm to destination agencies to take in charge the containers up to delivery at the consignee.

What do you offer in the way of sustainable solutions?The CMA CGM Group is committed to developing solutions in order to combine quality and innovation with environmental protection. CMA CGM has tested different eco-friendly solutions, particularly in regards to energy consumption and CO2 emissions. The reefer container fleet includes units equipped with low-energy engines which reduce production of CO2 by three. The Group also offer units equipped with energy saving software. The temperature of the goods is closely monitored throughout the journey, as a result of which less electricity is used.

For further information about moving your frozen or chilled commodities please view http://www.cma-cgm.com/static/Communication/Attachments/CMACGM_Reefer_Brochure_2014.pdf or Email: ho.reefercontact@cma-cgm.com

3

COMMODITY NEWSGROUP CASE STUDY

4

GhanaGhana To Host The First African Cosmetics ExhibitionShea Network Ghana, a member of the Global Shea Alliance, will conduct the first African cosmetics exhibition from November 24-26th in Accra. The event, being supported by the Global Shea Alliance, will provide the avenue for cosmetics consumers and other stakeholders to discover natural and locally-made shea products and also create export potentials for them. The exhibition will bring together over 40 African producers of cosmetics with shea butter as the base ingredient. The industry in Ghana produces about 100,000 MT of shea kernels every year from about 66 districts across northern Ghana.

[GNA 17/11/14]

MozambiqueMozambique To Sell 80,000 Tons Of Cashews This YearAccording to the National Cashew Institute [INCAJU] the current cashew campaign is expected to see production of 80,000 MT for sale, 17,000 MT more than the last campaign. Of the 80,000 MT of nuts available for sale, around half were produced in Nampula province, in the north of the country. The weather conditions were more favourable this year than in 2013, and a better sale price is also expected compared to the previous campaign, which led producers to retain their crops.

[Macauhub/MZ 11/11/14]

TanzaniaProcessing Factories To Be ConstructedThe Cashewnut Board and the Cashew Industry Development Trust Fund [CIDTF] has allocated 17bn/- to facilitate the construction of 3-new cashew nut processing factories. The units will have the capacity to process at least 30,000 tonnes per year, [10,000 tonnes per each factory]. CIDTF will construct new modern factories in Mkuranga, Tunduru and Mtwara. As for the old and underperforming factories plans are underway to work together with owners with seed capital to renovate and rebuild factories with modern equipment. Government is also working to recover 4-other factories in Masasi, Newala, Lindi and Nachingwea.

[Fresh Plaza 07/11/14]

5

COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

NigeriaUS$2.2 Million For Cassava DevelopmentThe Support to Agricultural Research and Development of Strategic Crops [SARD-SC] project, funded by the African Development Bank [AFDB] and executed by the International Institute of Tropical Agriculture [IITA], has budgeted US$2.2million for its cassava value chain activities for next year’s cropping season. Industry stakeholders met to review how the productivity and profitability of cassava can be improved to enhance food security and farmers’ welfare including use of fertilizers and herbicides and Cassava Brown Streak Disease [CBSD].

[The Nation 21/11/14]

6

COMMODITY NEWSCASSAVA

GeneralICCO Projections Cocoa demand is likely to outstrip production in the next few years but stocks should be sufficient to ensure supplies until output rebounds.

The International Cocoa Organization [ICCO] noted there is no threat to the supply of cocoa for chocolate manufacturers. It’s Statistics Division, in June projected the global cocoa market would move into deficit in 2014/15 and with production rising but remaining slightly below demand through 2019/20.

The ICCO has estimated a global cocoa surplus of 40,000 tonnes in the 2013/14 season [October/September]. The body noted numerous press reports which talked of potential deficits possibly reaching a level of 1-million tonnes by 2020 but emphasized its projections in no way bear out this fear, which it finds to be overstated in the extreme.

[ICCO 21/11/14]

CEO Of Barry Callebaut To Step DownThe chief executive of Swiss Barry Callebaut is to step down next year, after reporting a rise in full-year profits and a pick-up in sales volume growth.

The company, which produces chocolate for Nestle and Unilever, confirmed its mid-term financial targets and said it was seeing signs of improvement in its business in western Europe where growth has been sluggish. Juergen Steinemann will step down at the end of August 2015.

Under Steinemann, the group invested heavily in its production facilities and then shifted its focus to profitability. It has shed some lower-margin business, prioritising growth in emerging markets and in its high-margin gourmet business.

Net profit in its fiscal year to the end of August rose 14.5% to US$265 million as the cocoa business it acquired from Petra Foods last year swung to a profit and efforts to improve profitability paid off. Volumes grew 11.8% above global chocolate market growth of 2.3%.

While growth in Europe was flat, partly due to capacity bottlenecks that have now been cleared, the Americas benefited from strong demand for high-margin gourmet products and growth in Asia Pacific accelerated. Steinemann noted the current Ebola outbreak in West Africa was a humanitarian concern, but not a threat to business.

[Reuters 06/11/14]

7

COMMODITY NEWSCOCOA

CameroonGrinder Purchases Reach 13,144 T By End-October

The National Cocoa and Coffee Board [NCCB] noted cocoa grinders purchased 13,144 tonnes of beans by the end of October, down from 13,658 tonnes in the same period in the 2013/14 season. Leading processor Sic-Cacaos, a subsidiary of Swiss chocolatier Barry Callebaut, bought 6,333 tonnes of beans in October.

The country’s only other grinder Chocolaterie Confiserie du Cameroun [CHOCOCAM], an affiliate of South Africa’s Tiger Brands, made no purchases during the month. Total purchases for October last year were slightly higher at 6,681 tonnes of beans. Sic-Cacaos processes raw cocoa beans into cocoa powder, cocoa cake and cocoa liquor. The products are sold in the 6-nation CEMAC bloc, which also includes Central African Republic [CAR], Chad, Congo Republic, Equatorial Guinea, and Gabon. CHOCOCAM sells its products only in Cameroon.

[Reuters 20/11/14]

21,508T Exported In First 2-Months Of 2014-2015 Season National Cocoa and Coffee Board [ONCC] statistics reveal that 21,508 tonnes of cocoa were exported by Cameroon by September 30th, only 2-months into the 2014-2015 season. The ONCC highlights that Cameroonian exports in this sector are up by 3,000 tonnes compared to the 2013-2014 season. The local trader of the Cargill firm, Telcar Cocoa remains the export leader out of the 16 companies identified by ONCC. In terms of processing, 6,811 tonnes of cocoa were sold during the same period by industrial companies, of which 4,668 tonnes went to the local subsidiary of Barry Callebaut, Sic Cacaos.

The Inter-professional Organisation for Cocoa and Coffee [CICC] has indicated that the cocoa processing leader, Sic Cacaos, which improved its performance by 6.7% in the 2013-2014 season, plans to increase its activities in the near future by starting an investment programme which aims to increase the Douala factory’s production capacity by 50,000 tonnes per annum.

[Business in Cameroon 04/11/14]

Cote d’IvoireCocoa Arrivals Revised Upward To 1,742,878 T For 2013/14Cocoa arrivals from Ivory Coast hit a record 1,742,878 tonnes during the 2013/14 season, according to revised data from the Coffee and Cocoa Council. The government had announced arrivals of 1,740,842 tonnes on Oct. 1, up from 1,440,514 tonnes the previous season. The new figure was the result of a revision including the final days of the 2013/14 season, which ended on Sept. 30.

[Mail 07/11/14]

Port Arrivals Up Slightly By November 2Cocoa arrivals at ports in top grower Ivory Coast reached around 216,000 tonnes by November 2 since the start of the season on October 1, up slightly from 212,000 tonnes in the same period of the previous season. Exporters noted around 52,000 tonnes of beans were delivered to Abidjan and San Pedro ports between October 27 and November 2, up from 46,000 tonnes during the same period last year.

[Reuters 03/11/14]

Premium Drops As New Season BeginsThe premium buyers pay for cocoa from Ivory Coast declined as shipments in the new marketing season began. Ivorian cocoa in the European market for shipment from November to December is at a premium of £50-55/MT [US$80-88] above the price on ICE Futures Europe. The premium was £65-70 a month ago. Ivory Coast is expected to supply 1.6 million tons of beans in the 2014-15 season compares with 1.74 million tons produced in 2013-14 and 1.44 million tons the previous year.

[Bloomberg 05/11/14]

8

GhanaGovernment Considers Second Line Cocoa BondsGovernment is considering the possibility of a second line of longer term Cocoa Bonds by the Ghana Cocoa Board [COCOBOD] to fund its long term capital and infrastructure needs. Minister. Presenting the 2015 Budget to Parliament, Seth Terkper, the Finance Minister said the initiative forms part of the new debt management strategy that had been approved by Parliament. Cocobod in September announced that it has signed a US$1.2billion syndicated loan from international banks for 2013/14 cocoa crop purchases as against US$1.5billion for 2012/13. The credit facility between Cocobod and a consortium of international and local banks, led by French lender Societe General, will enable Cocobod to raise funds to purchase 830,000 tonnes of cocoa from farmers for the season. Cocobod aims to raise production to an average of 1 million tonnes annually from 800,000 tonnes through improved farming methods and better incentives.

[GhanaWeb 20/11/14]

Cocoa Price Hike To Boost Ghana OutputCocoa production is expected to receive a stimulus in the current crop season with a substantial price hike for farmers and a new funding deal likely to encourage growth at a time when the global climate for cocoa remains uncertain and Ghana’s output has dropped. A 62.74% price rise for cocoa farmers announced on October 2, and implemented immediately, is likely to boost production and help farmers make long-delayed investments in new equipment to boost crop yields.

Cocoa is a key crop accounting for more than 20% of all export earnings and 57% of agricultural exports, but declining global prices in the past 3-years has squeezed producers and hurt export revenues. An improving global market since the last Ghanaian producer price review has led the Ghana Cocoa Board [COCOBOD] to announce a price increase, taking farm-gate prices to GHS350/64kg bag [US$109]. Ghana’s 800,000 cocoa farmers now stand to receive GHS5520/t [US$1718] for their product, up from GHS3392/t [US$1056] in the previous season, with a total price of GHS5600 [US$1743].

International market prices for cocoa have been rising steadily this year, reaching near 3-year peaks in recent months, in part due to fears production could be disrupted because of the Ebola virus spreading through west Africa. Good rains and other favourable factors could enable Ghana to produce more than 1m tonnes this season, a level that surpasses previous estimates on Ghana’s 2014/15 production. Ghana is raising its production target by almost 6% to 900,000 tonnes, the highest level for 3-years. This represented a hike from the previous estimate of 850,000 tonnes, but was still below the record level of 1.025m tonnes achieved in 2011.

The sector received a further boost in September in the form of a US$1.7bn financing deal, which will enable COCOBOD to purchase the main cocoa crop this season. The deal, considerably more than the US$1.2bn raised in 2013 and US$1.5bn in 2012, is also the largest for financing soft commodities in sub-Saharan Africa. The agreement involves a syndicated loan by international banks including major Asian and European players such as Bank of China, Intesa SanPaolo, ABN Amro, and Standard Chartered. The loan was oversubscribed by 15%, indicating strong confidence among financial institutions in their outlook for the Ghanaian cocoa sector, despite a challenging environment generally for lending in emerging economies.

[Oxford Business Group 17/11/14]

Main Crop Purchases At 87,254T By Oct. 23Cocoa purchases declared to Ghana’s industry regulator fell 61.7% in the first 3-weeks of the 2014/15 season compared with last season, but the harvest is expected to pick up. Purchases from Oct. 3 to Oct. 23 stood at 87,254 tonnes, down from 228,043 tonnes in the same period last year.

[Reuters 11/11/14]

9

COMMODITY NEWSCOCOA

NigeriaGovernment Targets 800 Million MT Of CocoaThe Government is targeting the annual production of 51 million MT of cassava and 800 million MT of cocoa next year. The market value of cocoa stands at US$80 billion. The current production capacity is between 38-40 million a year and Nigeria wants to achieve the target by offering technical skills to farmers and supplying improved varieties amongst others. N3.4billion has also been deposited with the Bank of Industry [BoI] to enable SMEs access funding for the upgrade of their equipment.

[The Nation 12/11/14]

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

Date ICCO daily price (SDRs/tonne)

ICCO daily price (US$/tonne)

London futures (£ sterling/tonne)

New York futures (US$/tonne)

3 Nov 14 1985.79 2924.69 1872.67 2862.67

4 Nov 14 1998.44 2944.88 1882.67 2883.33

5 Nov 14 1995.94 2933.04 1880.67 2865.00

6 Nov 14 1996.99 2939.79 1897.33 2875.33

7 Nov 14 2010.45 2945.32 1906.67 2874.67

10 Nov 14 2015.01 2963.23 1908.33 2902.33

11 Nov 14 2035.07 2982.52 1922.33 2919.00

12 Nov 14 1987.71 2917.60 1887.33 2855.00

13 Nov 14 1963.90 2880.28 1875.67 2815.67

14 Nov 14 1955.27 2862.71 1865.67 2809.00

17 Nov 14 1958.49 2871.10 1870.00 2820.33

18 Nov 14 1948.55 2858.59 1862.00 2808.00

19 Nov 14 1961.19 2877.51 1871.33 2826.67

20 Nov 14 1959.78 2874.64 1868.33 2823.67

21 Nov 14 1964.99 2872.88 1867.67 2822.67

24 Nov 14 1993.08 2912.76 1888.33 2865.00

25 Nov 14 1964.68 2873.32 1868.00 2815.00

10

Cote d’IvoireIvory Coast Targets Coffee Production Of 400,000T By 2020

Ivory Coast aims to produce four times as much coffee as its current annual output of around 100,000 tonnes by 2020 under a new development plan. The government is set to dedicate 8 billion CFA francs [US$15 million] to relaunch the coffee sector. It hopes to reach 400,000 tonnes in 2020.

Green robusta coffee output peaked at 380,000 tonnes in 2000. However, production has dipped below 100,000 tonnes in recent years after a decade of political turmoil which sparked a brief civil war in 2011. Under reforms introduced in 2012, Ivory Coast abandoned more than a decade of sector liberalisation. The Coffee and Cocoa Council [CCC] now sells forward the bulk of the anticipated crop in order to fix a guaranteed price for farmers which was set at 620 CFA francs/kg for the current season.

Nestle’s Ivorian unit will have distributed more than 1.8 million coffee plants and trained more than 13,000 farmers by the end of this year. By 2022, Nestle pledged to train 30,000 farmers in Ivory Coast on good agricultural practices. The goal is to distribute 27 million high-yield plants.

[Reuters 18/11/14]

Ethiopia3rd International Ethiopian Coffee Conference The Ethiopian Coffee Exporters Association [ECEA] hosted the 3rd International Ethiopian Coffee Conference on November 6-7th held under the theme “Towards Quality and Tractability”. The conference brought exporters and buyers together to evaluate the quality of Ethiopia’s coffee, discuss ways of improving the crop, promote the traceability of coffee and widen the export coffee market. A number of research papers were presented and coffee sector policies and strategies discussed. Ethiopia earned US$720 million from coffee exports during the last fiscal year.

[Government 05/11/14]

Ethiopia Targets US$1 Billion Coffee YieldEthiopian President Mulatu Teshome aims to increase annual coffee exports to US$1 billion. Despite a steady increase in coffee production in recent years, Ethiopia’s supply to the global market has not exceeded a target of 200,000 MT. In 2013/2014 exports were lower than in 2010/11 where exports reached 196,118 MT and earned US$842 million. The growth of Ethiopia’s coffee industry has largely been attributed to its modernization yet only 5% of its coffee is produced on plantations dedicated to coffee production. Ethiopia exports 24 Arabica coffee varieties. Countries, including Japan, Georgia, Germany, Saudi Arabia, USA, Belgium and France, alone buy over 70% of Ethiopia’s coffee. Ethiopia may see earnings rise due to a shortage caused by a drought in Brazil.

[Africa Report 07/11/14]

Horizon Plantation To Double RevenueHorizon Plantations Ethiopia Plc, of which majority is owned by Saudi billionaire Mohamed al-Amoudi, intends to double its annual revenue from coffee projects with 3-years. The plan is part of the US$500m investment program the company is making on agriculture. Horizon will spend US$ 25m to train employees, improve roads and replace washing units at the Limmu and Bebeka coffee plantations. Bebeka plantation is the world’s biggest unfragmented coffee estate with 10,030 ha under plantation. Limmu on has 8,000 ha under coffee and produces 5,000 tons a year of the beans.

[2Merkato 14/11/14]

11

COMMODITY NEWSCOFFEE

KenyaCoffee Fund May Seek More Government Financing A fund set up to help Kenyan coffee farmers boost production may seek further government financing in the face of high demand for loans. Borrowers already have tapped half the 1 billion shillings [US$11.1 million] allocated to the coffee industry for the 12 months through June. Loans are provided to the entire coffee chain at concessional rates.

Kenya started the fund in April 2007 with an initial US$10 million to help small-scale farmers revive production that dropped from more than 100,000 MT in 1988-89 because of a slump in global prices and farm mismanagement. The fund aims to help farmers buy fertilizers, pesticides and equipment.

Kenya’s coffee production in the 12 months through September is likely to drop 10% to 45,000 MT from 50,000 MT a year earlier due to a lower crop cycle.

[Bloomberg 18/11/14]

Nestle Deal to Improve Coffee YieldCoffee Management Services [CMS] and Nestle Kenya have partnered to boost coffee yields and crop production in Kenya. The programme is focused in rural areas of Kiambu, Murang’a, Kirinyaga, Nyeri, Embu and Meru counties. With over 4,000 farmers adopting the high yielding and disease resistant Batian Variety production is expected to increase by further 15% by 2016. Nestle has distributed more than 230,000 mature Batian seedlings to the farmers involved in the programme to replace traditional varieties. The 9-cooperative societies involved in the programme have experienced a 70-400% increase in production between 2011 to June 2014.

[Star 13/11/14]

18th Nov 11th Nov 4th Nov 28th Oct 21st Oct

AA COF-AA-KE $226-332 $236-336 $208-339 $170-324 $195-329

AB COF-AB-KE $197-277 $194-262 $194-262 $166-265 $208-260

Average price / bag $226.98 $230.54 $225.15 $224.51 $230.18

TanzaniaArabica Coffee Prices Edge Higher On Tight SupplyAverage arabica coffee prices in Tanzania, Africa’s #4 producer, rose slightly at the last auction after supply declined according to the regulator Tanzania Coffee Board [TCB]. Tanzania, which ranks behind Ethiopia, Uganda and Ivory Coast in output, produces mainly arabica and some robusta coffee.

13th Nov 6th Nov 30th Oct 23rd Oct 16th Oct

AA $198.20-237.50 $196-230.80 $201-263 $194.80-250 $232-294

Average price per bag $204.87 $204.64 $212.15 $209.37 $239.79

A $196.60-208.60 $196.00 215.80 $200-228 $200-230 $223.80-254

Average price per bag $202 $201.56 $206.35 $207.78 $235.70

12

UgandaExports Rise 9% Yr/Yr In OctoberUganda coffee exports for October rose by 9% to 229,438 60-kg bags compared with the same month a year ago, reversing a pattern of lower exports this year. Shipments in October fetched US$30.7m compared with US$22.7m earned in the same month a year ago, the Uganda Coffee Development Authority said. There has been a good mix of rains and dry conditions which are helpful especially in the maturing stages of the crop.

[Reuters 26/11/14]

Exports Bolstered With 300 Million New TreesUganda, Africa’s largest coffee exporter, plans to plant as many as 300 million coffee trees in a 3-year replanting program aimed at boosting output and exports. The Uganda Coffee Development Authority [UCDA] noted the country plans to plant at least 100 million high-yielding coffee trees every year over the next few years to boost the industry. Most production currently comes from ageing and low yielding trees.

The government-funded drive is the largest in 2-decades as the country seeks to replace more than 150 million trees destroyed by the coffee wilt disease in the late 1990s. The program is expected to nearly double coffee exports over the next 4-5 years and is of interest to farmers following a drought in Brazil which has driven prices to multi-year highs. Ugandan farmers have this year planted more than 60 million coffee trees, compared with only 40 million in the past 3-years. Uganda’s coffee output may rise to 6 million 60-kilogram bags in 2019 from 3.52 million bags in 2013-14 when the young trees come into production.

Accelerating consumption in China and South Korea in particular will boost demand. Turkey is also an export market of interest. The plan would catapult Uganda ahead of arabica-producing Ethiopia as Africa’s #1 exporter and would consolidate its lead over primarily arabica-producing regional competitors Kenya, Tanzania, Burundi and Rwanda.

[Wall Street Journal 19/11/14 & Business Recorder 09/11/14]

2014-15 Exports Static On Earlier Crop LossCoffee exports may be little changed in 2014-15 from last season as plants are recovering slowly from drought. Shipments from Oct. 1 through September may remain at about last season’s total of 3.5 million 60-kg bags. Production may also remain stable at 4 million bags. Uganda mainly ships beans to the European Union, the U.S., Sudan, Switzerland, India, Singapore and Russia. The country grows mostly the robusta variety. Exports in 2013-14 declined from a 14-year high of 3.58 million bags a year earlier after drought cut yields.

[Bloomberg 17/11/14]

13

COMMODITY NEWSCOFFEE

GeneralCotton Tumbles To 5-Year Low On Record World StockpilesCotton stockpiles are swelling so much that there will be enough in global warehouses to make about 23 billion pairs of jeans. The glut sent prices to a 5-year low - the lowest since September 2009. Global production will outstrip demand for a 5th straight season, boosting inventories to an all-time high. American exports in the 12 months ending July 31 are forecast to slump the lowest since 2001, with purchases slowing in China, the biggest global consumer. Output is also climbing in India, set to overtake China as the world’s largest producer and is expected to harvest last year’s record of 31 million bales. Global stockpiles will reach an all-time high of 107.36 million bales. Production is rising just as China cuts imports because of record inventories. The nation’s purchases will drop 50% this year to the lowest since 2009.

[Bloomberg 13/11/14]

CameroonGenetically Modified Cotton Possible Within 3-YearsCameroon is poised to become the 10th country to grow GMO cotton. Société de Développement du Coton [SODECOTON] will start the 2nd phase of research to introduce genetically modified cotton to Cameroon next year. This phase will last 3-years and could make GMOs commonplace in Cameroon. Unlike the first phase, when research was done behind closed doors from 2012, this time, the experiments will be in the open.

GMO cotton is robust against herbicides and more resistant to diseases, enabling significantly higher yields. SODECOTON produces around 230,000 tonnes of cotton per annum and plans to increase this volume by introducing GMOs like in Burkina-Faso where the trials have been very successful for several years.

[Business in Cameroon 03/11/14]

IDB Provides 8.5 Billion FCFA In Financing For Cotton SeasonThe International Islamic Trade Finance Corporation [ITFC], a subsidiary of the Islamic Development Bank [IDB], granted Cameroon an 8.5 billion FCFA loan to finance the 2014-2015 cotton season.

In November 2013, IDB had already approved a loan for the same amount to Cameroon to finance the cotton season 2013-2014. Cameroon’s main lender from the Arab world along with BADEA, the IDB has positioned itself as the most visible external financial partner of Société de Développement du Coton du Cameroun [SODECOTON]. In addition to the IDB, Sodecton, which is aiming to produce 235,000 tonnes in 2014-2015, regularly turns to local banks to raise financing which has enabled the granting of seasonal loans to its 250,000 farmers in the northern region of the country.

[Business in Cameroon 06/11/14]

14

COMMODITY NEWSCOTTON, TEXTILES & LEATHER GOODS

Risk Management Fund LaunchedCameroon’s Cotton Development Company [SODECOTON] is considering setting up a Price Risk Management Fund for the Sector [FGRPC-C]. The move is aimed at dealing with the fluctuations of cotton prices on the international market which hurt producers.

The stabilization fund will be jointly managed by SODECOTON and the National Confederation of Cotton Producers in Cameroon [CNPC-C]. It will guarantee a minimum price for cotton, in case of sudden fall in the price of the commodity on the world market. The move is good news for 250,000 producers who are supervised and regulated by SODECOTON particularly in the northern regions of Cameroon. Since August 31, 2013, the prices of cotton worldwide has lost 30% of their value, which seriously reduces cotton companies’ income.

Furthermore SODECOTON plans to increase its working capital budget for fertiliser to 18 billion FCFA in 2015, compared to the previous 10 billion FCFA. Co-managed by the National Cotton Producers’ Confederation of Cameroon [CNPC-C], SODECTON’S fertiliser fund is financed by the government and the International Islamic Trade Finance Corporation [ITFC], a subsidiary of the Islamic Development Bank [IDB].

[APA / Star Africa 10/11/14]

Cameroon Projects Weak Cotton, Soya ProductionCameroon expects cotton output for the 2014/2015 season to reach 260,000 tons against 249,000 tons last season. The Cotton Development Company [SODECOTON] is banking on a production totaling 240,000 tons by the end of the year, against 210,000 tons in 2013. In the meantime, SODECOTON recorded a net result to the tune of 3.583 billion CFA francs in 2013, against a net positive result of CFA5.681 billion in 2012 and 5.385 billion in 2011. Earlier this year, SODECOTON received a syndicated development loan of 35.5 billion CFA francs from 5-local banks. Despite the implementation of strategies to boost its industry, SODECOTON is bedeviled by huge financial losses caused by the massive and fraudulent sale of cotton to neighboring Nigeria by the producers. Set up in 1974, the capital of SODEOTON is divided as follows: 59% for the State of Cameroon, 30% for French company GEOCOTON and 11% for the Societe Mobiliere d’investissement du Cameroun [SMIC].

[Star Africa 06/11/14]

KenyaUS Targets East Africa’s Textile Market With US$65 Million Trade Hub The United States is keen on boosting trade ties with East Africa and has launched a US$65 million trade hub in Kenya to further such relations. The hub will run under President Obama’s “Trade Africa” initiative launched in July last year. It serves as a partnership between the United States and sub Saharan Africa aimed at growing regional and international trade between both regions. Kenya was selected because of its position as the region’s leading economy and its speedy implementation of productive trade policies.

President Uhuru Kenyatta wants to be among the first movers in Africa by creating an enabling environment to attract investment. Kenya’s Textile industry has the potential to create 200,000 jobs in the next 2-years, making it a key area for government intervention. This project will enable Kenyans access this market through the African Growth and Opportunity Act, the European Union Economic Partnership Agreements and other facilities that encourage emerging markets to focus on key growth industries.

[Ventures 12/11/14]

MaliMali Trims Cotton Forecast On Erratic WeatherPoor rainfall and flooding have forced Mali to lower its raw cotton production forecast to 547,700 tonnes for the 2014/15 season, the government-owned Malian Company for the Development of Textile [CMDT] noted. Mali had originally projected output of 600,000 tonnes, but this season’s overall weather patterns were better than last year and the lower forecast is still well above the 400,000 tonnes of cotton produced during the 2013/14 season. Mali had planned to plant 570,300 ha with cotton but managed only 539,650 ha. Mali’s annual cotton season runs from April to April. A production phase from May-June to Oct-Nov is followed by a period of sales from Nov-Dec to March.

[Reuters 21/11/14]

15

COMMODITY NEWSCOTTON, TEXTILES & LEATHER GOODS

Tanzania Poor Harvest Leads To Drop In Ginning FacilitiesThe Tanzania Cotton Association [TCA] noted the number of ginners has dropped to 43 from 69 in the cotton season 2013/2014 after the crop failed. A cotton ginnery needs not less than 500 million kilos for operations to be sustainable but volumes just weren’t produced. Furthermore ginners sold at a discount while neighbouring countries were selling at a premium due to higher quality and focus on extension services. As there was no facilitation for ginners by the government, cotton quality in Tanzania was very poor.

[Daily News 21/11/14]

Cotton Sector Revival UnderwayEfforts are underway to address long standing challenges of the cotton sector including increasing prices and production. Announcing initiatives Deputy Minister for Agriculture, Godfrey Zambi, said efforts are directed to increase and improve quality of seeds, establish contract farming and avail farming inputs to farmers. The cotton sector has been surrounded by various challenges that have led to a decline in production including poor seed quality, lack of extension services, inadequacy of processing factories, shortage of insecticides and changing of prices at the world market. To meet these challenges, Zambi announced the implementation of a local industry development strategy aimed at improving the processing sector. The government has established the textile industry development department to train entrepreneurs.

In the last decade, Tanzania has been faced with low productivity, poor cotton quality and low level of mechanisation that has resulted in demoralisation of farmers. In 2010 stakeholders resolved to embark on contract farming to rescue the industry that was on the brink of collapse and 2-years ago, contract farming was implemented throughout the Western Cotton Growing Area [WCGA]. Stakeholders believed that contract farming guaranteed farmers inputs, market and stable prices since contract farming demands ginners to pay upfront upon delivery. In the year 2011/2012 about 62% of estimated 500,000 growers signed contracts with ginners through 5,565 farmer business groups with estimated 311,000 growers who received inputs on credit.

According to the Tanzania Cotton Board [TCB] there is a lot of untapped potential in contract farming but lack of stringent regulation coupled with lack of adequate support from the government deters investors from pouring much needed cash into the system. It is high time for the government to looks into problems affecting contract farming with emphasis on cotton rather than dilly dallying on the implementation of government policy. Currently, Tanzania is Africa’s 4th-largest producer of cotton after Mali, Burkina Faso and Egypt.

[Guardian 21/11/14]

ZimbabweZimtrade To Revive Textile IndustryZimtrade has put in place initiatives to revive the collapsing clothing and textile industry, which in recent years has gone through significant decline. ZimTrade said there was need to restore the clothing and textile industry to its glory days when Zimbabwe exported products in vast amounts to the European Union, SADC and the United States. ZimTrade has launched the cotton to clothing strategy, which began running this year and will continue until 2019 with the key objective of working towards the restoration of the textile industry. Mauritius has a strong cottage industry in the clothing sector that produces high quality products thus ZimTrade and Enterprise Mauritius will sign a memorandum of understanding [MoU] by 2015 to formalise their relations in their bid to improve intra-Africa trade.

[Herald 11/11/14]

16

AngolaAngolan, Spanish & Portuguese Companies Sign Fisheries AgreementBusinesses from Angola, Spain and Portugal signed an agreement of intent, which includes the management, and chartering of vessels in the fisheries sector. The agreement was signed by Angolan company Cominder, part of the Consar group, Spanish Malaca Shipping and Portugal’s Overview II.

The agreement could stimulate fishing activity at a time when Cominder is refurbishing all of its assets and onshore facilities to catch more fish and seafood. The group has a fish processing factory, a midsize boat and by the end of February 2015 expects to receive 2-more boats to start large scale fishing. As part of the MoU Cominder will ensure completion of its onshore facilities, including the installation of a preservation network and the organisation of a commercial distribution network of frozen and fresh products.

[Macauhub/AO/PT 24/11/14]

1st International Fisheries and Aquaculture FairThe 1st Angola International Fisheries and Aquaculture Fair was held from 27-30 November at the Luanda International Fair [Filda] with at least 50 domestic and foreign companies attending. The event organised by the Fisheries Ministry, and held under the theme “Fisheries and Aquaculture of Angola – A tide of opportunities in a developing sector”, featured 7-foreign countries: Norway, Spain, Portugal, Poland, Vietnam and Turkey.

[Macauhub/AO/PT 25/11/14]

Guinea BissauEU/Guinea-Bissau Fisheries AgreementThe European Union [EU] and Guinea-Bissau signed a new 3-year protocol as part of the Fisheries Partnership Agreement between the two. Vessels from the 28 Member States of the EU, mainly from Spain, France, Greece, Italy and Portugal, will now resume fishing in Guinea-Bissau waters after a break of 2-years because of the April 2012 coup d’etat.

The new protocol will allow 40 EU vessels to operate in Guinea-Bissau waters, in exchange for annual compensation of about 6 billion CFA francs [€9.2m]. Part of this compensation, almost 2 billion CFA francs, will be applied to development of national fishing by boosting Guinea-Bissau’s capacity for monitoring, control and surveillance of fisheries, as well as encouraging scientific cooperation, improving sanitary checks and providing support for artisanal fishing. In addition to the compensation fees will be paid by shipowners for the licenses granted, which vary according to the type of ships and the quantities of fish.

[Macauhub/GW 25/11/14]

NamibiaMackerel Factory Opens

Namibia’s Fishing industry has seen the opening of a second N$160 million state-of-the-art mackerel processing factory at Walvis Bay on Oct 30th. The processing plant is owned by Gendev Group Namibia shareholders, who include Camoposatu Investment and Vernier Investment.

The processing plant has a blast freezing capacity of 300t/per 24hrs. The opening of the factory indicates the industry is clearly moving in the right direction and responds to governments call for industrialisation and value addition of the country’s resources. The land base factory will allow fish to be processed onshore instead of the usual offshore processing.

[New Era 03/11/14]

17

COMMODITY NEWSFISH

Walvis Bay Cold StorageA planned cold storage plant at Walvis Bay, which will be housed in the Zambian Dry Dock site is expected to have a capacity of storing 10,000 tonnes of fish. An Environmental Impact Assessment [EIA] has been commissioned by Africa Union Financial Services cold storage facility in the Port of Walvis Bay. Africa Union is a South African based company. The site lies within the port and is about 18,000 m2. The facility will provide high density storage for up to 10,000 tonnes of frozen fish products. It will consist of a temperature controlled warehouse, together with additional facilities workshop and packing material storage.

[Namibian 04/11/14]

18

MauritiusPrinces, Thon Des Mascareignes Merge Mauritius Tuna OperationsMitsubishi-owned tuna canner Princes is merging is tuna operations in Mauritius with the country’s second largest tuna processor, Thon des Mascareignes [TDM]. The new entity will trade as Princes Tuna [Mauritius] and will be majority owned by Princes. It will operate 2-processing sites and generate sales of around US$400 million a year. The move enables it to continue to drive long-term sustainability initiatives in the Indian Ocean region.

[Undercurrent 06/11/14]

MozambiqueSouthwest Indian Ocean Fisheries Commission Moved To MozambiqueThe headquarters of the Southwest Indian Ocean Fisheries Commission [SWIOFC] will be transferred to Maputo under an agreement signed between Mozambique and the United Nations Food and Agriculture Organization [FAO]. The decision aims to promote the sustainable use of marine resources of the Western Indian Ocean region and deal with problems of fisheries management and development faced by its members. The SWIOFC was established in 2004 and is currently headquartered in Harare, Zimbabwe. SWIOFC members include South Africa, Comoros, France, Yemen, Madagascar, Mauritius, Mozambique, Kenya, Seychelles, Somalia, Tanzania and Zimbabwe.

[Macauhub/MZ 13/11/14]

Malawi And Mozambique Sign Fisheries MoUMalawi and Mozambique have signed a 5-year Memorandum of Understanding [MoU] on fisheries and aquaculture management to facilitate recovery of the declining fisheries and aquaculture industry. Water bodies shared by the 2-countries include Lake Malawi, Chiuta, Chilwa and Shire rivers.

[African Farming 31/10/14]

19

COMMODITY NEWSFISH

SenegalEU-Senegal Sign FPAFollowing an 8-year hiatus, the European Union [EU] and Senegal on 20th November signed a new 5-year Sustainable Fisheries Partnership Agreement [FPA] which will allow up to 38 EU boats to fish in Senegalese waters in return for a €8.69 million payment by the EU. As part of the deal the EU will invest €750,000 a year into developing the local fisheries sector including improving surveillance, combating illegal fishing, and promoting scientific cooperation.

[RTT 20/11/14]

South AfricaSouth Africa Resumes Seafood Exports to RussiaSouth African will begin seafood exports to Russia after it granted 12-seafood companies licences to supply canned and frozen fish. This is the first since the late 1990s that South African fish will be exported to Russia on a commercial basis. Companies granted rights to supply seafood are Abagold Ltd, Compass Challenger, GSA Trades Pty Ltd, Harvest Atlantic Peace, Irvin & Johnson Limited, Kaytrad Coldstore, LAVERNE, Marine Products, Pioneer Fishing Pty Ltd, Sea Harvest, Sea Vuna Fishing Company Pty Ltd and Viking Fishing Co Pty Ltd. First exports to Russia are expected in early 2015. South Africa’s total fish exports in 2012 were valued at R3.5-billion but this figure could increase if Russia becomes a major importer.

[South Africa Info 12/11/14]

20

East AfricaTBS Harmonises Honey Standards Within EA RegionThe Tanzania Bureau of Standards [TBS], which recently established a national standards benchmark for honey and other bee products has just harmonised measures in the rest of the region. The move aims to raise product quality and standards to compete in international markets. So far, only 19 honey producers have registered their products with TBS for certification. TBS is embarking on an awareness program. The inaugural ‘Apimondia Symposium on African Bees,’ took place at Arusha. Only 4-countries have been permitted to sell honey, beeswax and other apiculture products to the European Union, others being Ethiopia, Uganda and Cameroon.

[All Africa 14/11/14]

KenyaEU Approves Vetted GMO Foods The European Union [EU] will not prohibit GMOs from East Africa from entering its market. Early this year, Kenya had been warned of possible trade restrictions on horticulture exports to the EU market. This was after local producers and exporters were accused of consistently shipping produce with high levels of residue. The EU however, said the crops will be vetted and will have to meet all stipulated requirements before being allowed into the EU market. East African states will export their horticulture duty-free to the EU market in 4-6 months. The Horticultural Crops Development Authority is to teach farmers the standards required for export produce.

[The Star 25/10/14]

21

COMMODITY NEWSFOODSTUFFS & FLOWERS

EU Duty Approval To Come Just In Time For Rose MarketThe renewal of a duty-free regime between the European Union [EU] and the East African Community (EAC) nations may not win approval until January, bringing it dangerously close to the Valentine’s Day holiday so lucrative for Kenya’s flower growers. The flowers sold in the 2-weeks leading up to Feb. 14 account for about a 33% of annual sales for Kenya’s flower producers, some 90% of them roses, according to the Fresh Producers Exporters Association of Kenya [FPEAK]. According to the EU ambassador to Kenya it will be the 3rd-4th week of January. A European Union tax on fresh fruit, vegetables and flowers from the 5-nations [Burundi, Kenya, Rwanda, Tanzania and Uganda] has been in effect since Oct. 1 after the parties missed a deadline to renew the duty-free export regime. Although they reached an agreement to renew last month, the pact now awaits approval by the European Parliament and European Commission.

[Reuters 20/11/14]

22

GeneralRoundtable To Expel MembersThe Roundtable for Sustainable Palm Oil [RSPO] is to expel member companies that have failed to keep even their most basic promises to the sustainability body. At the 12th annual meeting, the RSPO announced that member companies who have ignored annual reporting requirements for the last 3-years will be expelled within 6-weeks and those failing to report over 2-years will be suspended. Member companies are required to report annually on progress towards time bound plans to reach sustainability milestones.

[WWF 21/11/14]

Cargill On Track To Map 80% Of Palm Oil Cargill says it’s on track to map 80% of its palm oil in key markets back to individual mills by the end of this year and 100% of all mills by December 2015, according to the company’s first progress report on sustainable palm oil. The report lays out the company’s plan to achieve a fully sustainable supply chain. Cargill committed to sustainable, deforestation-free, socially responsible palm oil in its palm oil policy, launched in July 2014, and repeated that pledge at the UN Climate Summit in New York City in September. Regular progress reports are part of the commitments made in the new policy.

[Environmental Leader 21/11/4]

CameroonSocapalm’s Sales Down 18% In H1 2014Listed on the Douala Securities Exchange [DSX], Société Camerounaise des Palmeraies [Socaplam] suffered a 5.1 billion FCFA downturn in its sales for H1 2014. This amounts to an 18% decline relative to the same period last year. Socapalm’s midterm financials reveal that business activity has plummeted by 25%. However, net returns after taxes were 5.2 billion FCFA in late June, which is 400 million FCFA below the 5.6 billion achieved in June 2013. The company’s auditors attribute this performance to the postponement of palm oil sales to H2 2014 while there has been a slight increase in crude palm oil production [+1.4%] and palm nuts [+4.7%]. The company is optimistic about the close for 2014 expecting an increase of 11% relative to 2013 to reach sales around 46 billion FCFA compared to previously projected 41 billion for the same period last year.

[Business in Cameroon 07/11/14]

CFA 15 Billion To Modernize Vegetable Oil PlantsCameroon’s cotton development corporation [SODECOTON] is to invest CFA 15 billion for the modernization of vegetable oil plants with the aim of increasing refining capacities by 50%. Production is currently 17,000 tons per year but could increase to 27,000 tons with the aim of 34,000 tons some years later.

[Star Africa 24/11/14]

NigeriaInaugurates Biggest Oil Refinery In Ibadan Oyo State Governor Abiola Ajimobi inaugurated the largest automated edible oil refinery and margarine company in sub-Saharan Africa in Ibadan this month. Rom Oil Mills Limited, a subsidiary company of Flour Mills of Nigeria Plc, is expected to refine 400 MT/day into crude palm kernel oil, crude palm oil and crude soybean oil into refined oil and distilled fatty acids.

[Guardian 07/11/14]

23

COMMODITY NEWSPALM OIL & EDIBLE OILS

GeneralInternational Sugar Organization SeminarThe 23rd International Sugar Organization [ISO] Seminar was held this month in London under the theme “Sugar and Ethanol: Fresh Options”. The 2-day event saw speakers share their assessment and outlook on decisive policy and economy aspects shaping the future of the industry. The outlook for sugar in key regions and the potential for investment, as well as the interdependence between ethanol and sugar markets, were analysed as were sustainability issues.

[ISO 27/11/14]

International Sugar Price Still DepressedThe international sugar price remained depressed over the past year, with high month-on-month volatility, Imara Africa Securities [IAS] said in its 2014 sub-Saharan Africa [SSA] Sugar Sector Report. At the end of August, the sugar price was trading 46% below its 5-year high reached in July 2011; however, this was in line with expectations of most global forecasts, which attributed the depressed prices to the excess global supply as the sugar balance remained in a production surplus, thus negatively affecting the medium-to long-term price outlook.

Southern African sugar producers currently had a sugar surplus with most countries being able to meet their domestic sugar consumption requirements. Meanwhile, demand for sugar in West Africa remained higher than supply, with most countries importing from global exporters such as Brazil and South Africa. Sugar consumption in this region was growing with low per capita consumption of less than 9 kg leaving room for further expansion.

The report further stated that the main players in the global sugar market had remained broadly unchanged since the 2013 report, with Brazil being the top sugar producer in the world, producing more than 35-million tonnes a year. Egypt and South Africa remained the top sugar producers in Africa, collectively being responsible for 40% of the continent’s sugar production. However when the European Union’s [EU’s] sugar quota regime ends in 2017, it will have a profound impact on some of sub-Saharan Africa’s sugar producers as the EU’s sugar market offered a higher export price for sugar. On the whole, sugar companies in sub-Saharan Africa were currently trading at lower price-earnings ratio multiples than their global counterparts, despite having, on average, higher equity returns, profit before tax and net income margins.

[Engineering News 14/11/14]

24

COMMODITY NEWSSUGAR

KenyaKenya Imports 10,000 MT Of Sugar From UgandaThe government has temporarily lifted a ban on importation of sugar to address an acute shortage of the commodity. Kenya has imported 10,000 MT of sugar from Uganda to stabilise prices of the commodity. The nation was down to only 6,300 MT enough to last the country 3-days. Kenyan consumes 2,000 MT daily. A 50kg bag of sugar is currently retailing at Sh5200 from sH3600 which is hurting the consumer. However critics pointed out that unscrupulous companies divert cheap sugar from Brazil into the market which in turn is collapsing the local industry.

[Standard Digital 02/11/14]

NigeriaSugar Policy Saves Over US$191 BillionThe implementation of the Nigerian sugar policy has saved US$191.6bn over the last 3-years. The Government approved the Nigeria Sugar Masterplan [NSMP] in 2012 for the development of the sub-sector.

The policy, which took effect from January 1, 2013, led to an outright ban on the importation of refined sugar in retail packs. The plan also contains fiscal and investment-specific incentives designed to stimulate and attract new investors to the industry in order to increase local sugar production and reduce the nation’s dependence on imports. The plan has a projection for an investment of US$3.1bn to be made by the private sector to effectively implement the sugar policy. In 2011, the total spent on sugar importation was US$240.6bn and that the figure had been brought down significantly to N59.9bn at the end of 2013 – a 75.1% drop.

Through the implementation of reforms a total investment of US$3.2bn has been made as against US$100m investment in 2011.

[APA 08/11/14]

Nigeria On Track For Sugar Self-SufficiencyNigeria is on track to achieve sugar self-sufficiency in about 10 years’ time, which will enable Africa’s most populous country to sharply reduce imports of predominantly Brazilian raw sugar. Latif Busari, CEO of Nigeria’s National Sugar Development Council, said that so far more than US$3 billion of private investment had been lined up to develop farms across the country to boost domestic sugar output from 20,000-30,000 tonnes a year to around 1.8 million tonnes a year within a decade. Nigerian sugar consumption is expected to increase to around 1.8 million tonnes a year in 10 years’ time, from some 1.2-1.3 million tonnes a year now. Nigeria has 3-sugar refineries.

[Reuters 25/11/14]

South AfricaTongaat Hulett H1 Profit Up On Higher Import TariffsSouth African sugar producer Tongaat Hulett H1 operating profit grew 9.3% as import tariff hikes and cost cuts partially offset the effects of low sugar prices. Operating profit for the 6-months to September rose 9.3% to R1.5 billion [US$134m] compared to the same period last year. South Africa’s revenues service raised sugar import tariffs after months of lobbying by producers who argued that the international price of the commodity was lower than production costs and that cheap imports were strangling business. It also has operations in Zimbabwe, Swaziland and Mozambique. Tongaat noted revenue from some regions that were not affected by tariff hikes were still hobbled by the low global price, particularly for exports into the European Union [EU].

[Reuters 10/11/14]

25

COMMODITY NEWSSUGAR

SwaizilandUbombo Sugar Produced 35% Of Swaziland’s SugarUbombo Sugar Limited has produced 35% of Swaziland’s sugar in 2012/13. The company’s 21,000 ha operations are centered in the town of Big Bend, in the Lowveld of eastern Swaziland. Ubombo Sugar is a partnership between Illovo [60%] and Swaziland national development agency, Tibiyo Taka Ngwane [40%] and is the country’s largest industry. Sugar accounts for 60% of Swaziland’s agricultural output and 35% of its agricultural wages.

The area under cane production has increased by 28% since 2000 as a result of investment in irrigation by the government, sugar companies, commercial growers, the European Union [EU] and donor organisations. Swaziland exports roughly half of its sugar to the Southern African Customs Union [SACU] and has duty-free, quota-free access to EU markets.

Ubombo’s investment to expand its mill in 2011 represented a long-term commitment to the sustainability of the industry with small-scale growers meeting much of its increased demand following the factory expansion who are supported through a guaranteed market for cane as well as through investment, training, and enhanced buying power through the input procurement service.

[Swazi Observer 06/11/14]

Sugar Board Of Tanzania In The CountryThe Sugar Board of Tanzania [SBT] is in Swaziland on a learning tour about data management from the Swaziland Sugar Association [SSA]. The SBT falls under the ministry of agriculture and is responsible for regulating the sugar industry in Tanzania in terms of exportation and importation and is looking to implement a new system that would link to the millers. The system currently used in Swaziland is fully managed by SSA though the Royal Swaziland Sugar Corporation [RSSC] with Ubombo Sugar granted access.

[Swazi Observer 25/11/14]

TanzaniaGovernment Revokes Import LicencesThe government has revoked licences of sugar importers who do not pay taxes. The move is being coupled with efforts to curb those who import the commodity through unofficial routes. Various interventions had been made including putting teams at unofficial points to root out those importing sugar illegally.

The country’s sugar industry expects to largely target export markets in the next 4-years as more foreign agricultural investments flow in by 2016, a departure from the current situation where there is existence of sugar gap every year. Normally, the demand gap is covered by licensed imported sugar that has to arrive in the country at the time when all factories have closed for maintenance or have less stocks for sale. This is a typical case showing complications in the distribution systems, which affect largely final prices to the ultimate consumer. Tanzania’s sugar consumption stands at 480,000 MT/pa but the 4-factories, namely the Tanganyika Plantation Company [TPC], Kilombero, Kagera and Mtibwa produce only 320,000MT.

The Sugar Board of Tanzania [SBT] has 9-projects implemented which will see the country tripling its annual sugar production from the current estimate of 300,000 MT to 910,000 MT come 2016. The projects, which are in various stages include Rufiji [Coast Region], Kasulu [Kigoma Region], Ikongo [Mara Region], Luiche/Malagarasi [Kigoma Region], Pangani [Tanga Region], Mahurunga [Mtwara Region] and Kilosa in Morogoro Region. However tonnes of unsold sugar worth billions still remain piled up in warehouses and factories due to a failure to secure local markets.

[Daily News 19/11/14]

26

Bulk Sugar Procurement Starts SoonA proposed Bulk Procurement of Sugar [BPS] is to commence in December according to the Sugar Board of Tanzania [SBT]. The launch had been delayed in order to hold necessary consultations with industry stakeholders. The process to establish a company that will manage the BPS is now underway after a conference held in Morogoro. The agreement is that traders will continue to import industrial sugar for industrial use but will now be closely monitored to ensure no refined sugar designated for industrial use is illegally ending up on the market for direct consumption as is the case today.

Sugar producers have agreed to set up a service entity consortium that will be responsible for importing the sugar approved by Sugar Board of Tanzania [SBT] to fill existing gaps between production and demand. The consortium will be non-for-profit and will effectuate sugar imports as directed SBT while also making sure that all due taxes and levies are paid. The resolutions were reached after realising that permits issued by SBT to sugar importers have been severely abused with much more raw and refined sugar being imported than the country requires.

Tanzania has historically been depending on sugar traders to import sugar to fill the gap between domestic production and domestic demand. Imports have during the last couple of years been growing rapidly as the domestic sugar production capacity has stalled. In this new proposed setup SBT will maintain the role of evaluating and deciding how much sugar must be imported to guarantee a full supply of the domestic market for as long as there is lack of domestic production which has to be filled by imports.

Tanzania imports over 100,000 MT of sugar annually to compliment over 300,000 MT produced locally to meet the 500,000 MT consumed annually. Poor border control and weaknesses in law enforcement have resulted in smuggled sugar flooding the local market disadvantaging local producers. The estimate for 2013/2014 is that 157,000 tonnes of raw sugar has been imported although no import licences were granted by the SBT. The licences for refined sugar issued during the same period was for the importation of 175,000 tonnes for industrial use only.

[Daily News 06/11/14]

ZimbabweZimbabwe To Impose Duty On Sugar ImportZimbabwe will from January 2015 impose duty on all imported sugar to protect the local industry negatively affected by a slump in sales. Imported sugar will attract a 10% import duty. Meanwhile, Tongaat Hulett is set to cede 6,000 ha of land to government to increase sugar production next year. Zimbabwe produced 488,000 MT of sugar last year with the figure expected to retain this year.

[CAJ News 19/11/14]

27

COMMODITY NEWSSUGAR

KenyaTea Industry In DeclineKenya is one of the world’s biggest tea exporters but the industry is screeching to a halt. This year, farmers sold 40% less than the 3-previous years as they have started to switch to alternative crops. Good weather and big harvests have led to a glut of black tea. Tea farmers are so discouraged by the drop in sales that they are switching to crops in higher demand. The price of fertilizers and pesticides have also shot up. Compared to a decade ago, Kenya now produces 50% more tea – boasting US$1.3 billion from the crop last year and is one of the country’s biggest earners, but, thanks to more competition, tea prices have been under pressure. Farmers in Kenya are crying out for government help, looking for them to cushion price swings and possibly find new export markets. Furthermore 70% of Kenya’s tea go to only 5-countries. And due to political turmoil in 4 of them – Egypt, Sudan, Afghanistan, and Pakistan – purchasing numbers are taking a hit.

[Wall Street Daily 21/11/14]

Tea Firms Warn Of Poor Annual Earnings Williamson Tea and Kapchorua both reported weaker H1 pretax profits, and both said falling tea prices would reduce their respective full-year earnings by at least a quarter. Williamson Tea, which shares owners with Kapchorua, said its pretax profit fell by 54% to 240 million shillings [US$2.66m], while Kapchorua fell 38% to 68 million shillings for tH1 to the end of September. The companies said a higher crop and falling prices for tea at the Mombasa-based tea auction had hurt profits, at a time when wages and other costs were escalating. A weakening local currency during the period compared to the prior year helped mitigate the losses. There are no indications of the global tea market picking up in the near future. As the weather continues to be favourable, it is expected that the crop and stock levels will continue to rise depressing tea prices further.

[Reuters 24/11/14]

Nandi Blocks Tea Tax After Public OutcryThe Nandi county government has withdrawn a proposal to impose tax on tea following a public outcry and threats to hold demonstrations. In its Finance Bill 2014, the county government proposed a Sh1 tax to be charged on every kilo of green leaf harvested. Farmers opposed the proposal, with some threatening to uproot the crop. The county’s proposal was meant to increase its revenue. The tax was to be imposed on maize, coffee, tea and horticulture. Tea farmers are already overburdened by poor prices in the international market and the high cost of production.

[The Star 17/11/14]

Auction Summary

Auction [Per kg] 11th Nov 4th Nov 28th Oct

Best Broken Pekoe Ones [BP1s] TEABP1-BEST-KE $2.10-3.40 $2.00-3.40 $2-3.72

Best Brighter Pekoe Fanning Ones [PF1s] TEAPF1-BEST-KE $2.40-2.84 $2.42-2.80 $2.51-3.10

28

COMMODITY NEWSTEA

GENERALSlower Demand In China And Tougher Competition Challenges ExportersOver the past 2-weeks producers have indicated there have been a few price increases for logs and sawnwood of selected species reflecting changes in demand. However, producers are now concerned that buyers for the Chinese market are scaling back enquiries due to an economic slow-down in China and due to very competitive offers for especially meranti from Malaysian exporters.

[ITTO 15/11/14]

Importers Playing Tough On PricesApart from a possible weakening of demand in China, markets continue largely unchanged as demand is firm and stable. Producers report that buyers are getting tough in price negotiations and in some markets buyers are switching to alternative species if the price is right. For the European market trading volumes are low and producers do not expect this will improve until early spring when, traditionally, European buyers came back into the market.

[ITTO 15/11/14]

VPA Countries In Africa Share TLAS ExperiencesThe EU FLEGT facility has reported that about 20 government officials and private sector representatives from VPA countries in Africa who are engaged in implementing timber legality assurance systems [TLAS] met for a day on the sidelines of the Forest Governance Forum in Yaoundé, Cameroon, on 21 October.

[ITTO 15/11/14]

The Fund For The Green Economy In Central AfricaA recent Economic Community of Central African States [ECCAS] Conference announced that ministers from the region had adopted a text establishing the Fund for the Green Economy in Central Africa FEVAC]. The Democratic Republic of Congo [DRC] have contributed US$3 million to start the Fund]. Held from October 27-30 in Kinshasa, the conference brought together the Central African Ministers of Finance, Foreign Affairs, and Forestry as well as several experts in green economy and the timber industry. It was hosted by the ECCAS as part of the Program for the Management of Vulnerable Ecosystems in Central Africa [under ECOFAC], the result of a joint effort with the European Union, which provides financial support within the framework of the EU Forest Law Enforcement, Governance and Trade [FLEGT] Action Plan.

[Business Ghana 31/10/14]

Finally Trading Begins To Be ProfitableA close look at price movements over the past 2-years suggests that, at last, financial returns to producers have improved. This follows a previously long period when prices barely, if at all, kept pace with inflation and the steady increases in costs for power, fuel and other inputs. Although there was some concern that the economies in the main consumer countries could falter once more causing another round of weakness, the current debate in the consumer countries tends to focus on whether supplies can be maintained to meet demand not falling consumption.

[ITTO 01/11/14]

29

COMMODITY NEWSTIMBER

Producers Now Adept At Balancing Production With DemandReports from producers over the past months have indicated that they are now much more adept at balancing production levels and short term demand. In this way they can avoid building up stocks beyond the volumes needed to service the market.

Producers report that trade is brisk at current prices in the major markets of China, Middle East, Vietnam and India but that no attempts have been made to raise prices even for contracts stretching to year-end. The only downside to current business is the level of trade with European importers which is un-inspiring with little prospect of any serious improvement volumes or prices in the short term. The focus of buyers in Europe remains sapele, sipo and a very few other species.

[ITTO 01/11/14]

CameroonDouala Lumber Yard InvestmentSociété d’Exploitation des Parcs à Bois du Cameroun [SEPC] announced in October the concessionaire of Douala port off-loaded 122,562 m3 of wood [91,196 logs / 31,366 m3 lumber] which brings to 246,196 m3 of logs and 82,550 m3 of lumber, the total quantity of wood delivered between August and October 2014.

This performance was made possible thanks to the recent acquisition of new handling equipment to strengthen the concessionaire’s operational capacity. The delivery included a Volvo loader, a cargo handling engine able to manage up to 12 tonnes and a Speed Appro barge – a flat-bottomed, non-motorised boat generally used in convoys and pushed on wide rivers and canals. It can transport up to 400 tonnes of cargo.

[Business in Cameroon 06/11/14]

Logs Still Stockpiled In Douala PortThe huge stock of logs at Douala Port still awaits shipment. To make matters worse logs for new contracts are beginning to enter the port creating more congestion. On a brighter note, sawnwood production and shipments are well balanced and export orders are being met on time.

[ITTO 15/11/14]

CongoNew Logging Concession In Northern ProvincesIn Congo Brazzaville the government continues to closely monitor company log export quotas. They are also strictly enforcing concession forest management agreements and have not hesitated to rescinding the agreement if concession holders are in breach of their obligations. Negotiations are already in progress for the last available concessions located mainly in the northern provinces. These areas are far from the ports which will result in very high transport costs.

[ITTO 15/11/14]

30

GabonTough Conditions Get Worse For Gabon MillersMillers in Gabon now face increased costs as the government has imposed a new surcharge over and above the existing requirement for businesses to purchase a certificate to trade. This, along with the delay in the TVA refund, has created very tough conditions for the industry.

[ITTO 15/11/14]

GhanaTimber Procurement Set New GuidelinesThe Timber Industry Development Division [TIDD], a sub-division of the Forestry Commission [FC], in partnership with the Ministry of Lands and Natural Resources and Nature and Development Foundation [NDF], has developed a draft policy to regulate the procurement of timber and timber products for all government projects in Ghana. The document, to be forwarded to Cabinet for approval after a nationwide stakeholders’ consultation at the end of Q1 2015, will ensure timber products are acquired from certified and legal sources. One of the supporting measures required for the implementation of the Voluntary Partnership Agreement [VPA] signed between Ghana and the European Union is to promote a legal timber procurement policy which is expected to significantly reduce the production and trade in illegal timber on the domestic market.

Wood Product Exports Up 15%In the first 8-months of 2014 Ghana exported 209,928 m3 of wood products earning €84.23m. Export volumes in the first 8-months of 2014 were 14.8% higher compared to the same period in 2013. The export of primary products [poles and billets] and secondary products [sawnwood, boules, veneers, blockboard and plywood], continues to rise but 2014 exports of tertiary products dropped by 29% compared to the same period in 2013. The major markets for Ghana’s wood products are Africa, Europe and Asia which, together, accounted for about 92% of all exports. Teak, papao [Afzelia africana; A. bella], dahoma, senya, ceiba, wawa, mahogany, sapele and odum were some of the major species exported during the period reviewed.

[ITTO 15/11/14]

31

COMMODITY NEWSTIMBER

ZimbabweBanks Offer 60% Funding For Tobacco FarmingThe Bankers Association of Zimbabwe [BAZ] noted 60% of funding from banks for the 2014/ 15 farming season will go towards tobacco farming as banks believe that tobacco repayment arrangements are markedly more efficient and effective. Banks are putting various financing schemes for agriculture for the 2014/15 season and will once again play a pivotal role in supporting the agricultural sector. During the 2013 /14 season, banks availed US$620m towards agriculture financing and as much as US$343m [55%] was for tobacco. There is growing preference for cash crop farming particularly tobacco and horticulture by small scale and commercial farmers to grain crops and cotton due to uncertainty in terms of prices and timing of payments. BAZ stated that Government should encourage private sector agriculture infrastructure investment as Zimbabwe does not have medium to long term funding required to meet Agricultural requirements.

[Herald 03/11/14]

32

COMMODITY NEWSTOBACCO