MOROCCO

CMA CGM GROUP UPGRADES EXPORT SOLUTIONS FOR CITRUS FRUIT & VEGETABLESFull Story On Page 3

AFRICACOM-WATCH

Olam Buys Archer Daniels’s Cocoa Business For US$1.2b

ISSUE 54 | NOVEMBER 2015

South Africa: More Fruit Transported Via Rail

Nations And Donors Agree Plan To Protect Congo Forests

09 27 32

1

AFRICACOM-WATCH

ISSUE 54 | NOVEMBER 2015

Contents

03 | African Group News

05 | General

09 | Cocoa

07 | Cashew, Groundnut & Shea

19 | Coffee

Ethiopia: Ethiopia Upgrades eTRADE Platform

Regional: New VP For African Cashew AllianceCote d’Ivoire: Cote d’Ivoire Becomes World’s Leading Producer Of Cashew Nut / Viet Mold Machine Will Install A Cashew Processing Unit In Yamoussoukro, Processing Units To Be Built In North WestMozambique/Guinea-Bissau: Mozambique/Guinea-Bissau To Cooperate In Cashew Sector

Regional: Olam Buys Archer Daniels’s Cocoa Business For US$1.2 Billion / Olam Sees 2015-16 Global Cocoa Deficit Of 150,000 Tonnes / Ecobank Report See Price Rise As Production Falls / World Cocoa Foundation President Resigns / Cocoa Demand Exceeds ExpectationsCameroon: Exports Reach 28,286 Tonnes By End September / CICC Assess Marketing Program / Production To Drop 20,000 Tonnes / Telcar Cocoa Pays Kumba’s Producers 400 Million FCFA PremiumCote d’Ivoire: ICCO To Move To Abidjan / Firms Offer Deal To End International Contract Boycott / Licenses 113 Cocoa Exporters For 2015-16 Season / Arrivals Hit 214,000T By Oct. 25 / Rains Improve Main Crop Cocoa Prospects / Eastern Output Hit Over Lack Of Rain / Arrivals Up Year-On-Year At 145,000 TonnesGhana: Cocoa Season Ends / Ghana Expects Output Rebound As New Season Starts / Government Announces 21% Increase In Producer Price / Olam Notes Driest Period In 35 Years Threatens Crop / COCOBOD Supplies 5 Million Seedlings / Mondelz International Well-Being Program / 5-Year US$750 Million Cocoa Roads ProjectNigeria: Mondelez International Invests US$50 Million In New Plant

Regional: Coffee Prices Lowest In 2-YearsEthiopia: Exchange To Have Full Traceability System / Ethiopia To Host International Coffee ConferenceKenya: Kenya To Consume More Coffee / Value At Auction Falls 18% In 2014-15South Sudan: Exporting Coffee For The First TimeTanzania: Output Down, Prices RiseUganda: Exports Jump 38% In September

08 | CassavaGambia: National Cassava Development Strategy ValidatedNigeria: AfDB Lament On Poor ExportsZambia: Cassava Output To Increase

06 | BananaMozambique: Mozambique Places Ban On Banana Movement

CMA CGM Group Upgrades Export Solutions For Citrus Fruit & Vegetables

2

Website: www.cma-cgm.comEmail: lhv.marketing@delmas.netTweet: @CMA_CGM_Group

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 LiabilityThe CMA CGM Group 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 the CMA CGM Group 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 Africa Marketing

Rachel Bennett Dominic Rawle

22 | Cotton, Textiles & Leather GoodsCameroon: Raw Cotton Production Up In 2014-15 SeasonMali: Crop Target Missed Due To Late RainsZimbabwe: Ginners To Pay Seed Cotton Price Adjustments

24 | FishCape Verde: Cape Verde Approves Legislation To Combat Illegal FishingKenya: Chinese Firm To Set Up Fish Processing Plant / Kenya Partners With China To Increase Fish Production

29 | Palm OilRegional: ADM Raises Stake In Wilmar International Ltd / Indonesia Turns To West Africa To Boost Palm Oil ExportsGhana: Sustainable Palm Oil Forum

30 | SugarKenya: Kenya Writes Off Sugar Company Debts Ahead Of PrivatisationTanzania: Tanzania Offers 60,000 Hectares For Sugar DevelopmentZimbabwe: Starafrica Upbeat On New Sugar Import Tax

31 | TeaBurundi: Burundi To Produce Tea Worth US$23 Million This YearKenya: Growers Seeking More Lucrative Returns

32 | TimberRegional: African Nations And Donors Agree Plan To Protect Congo ForestsCentral/West Africa: Buyers For China Remain On The Side-Lines / Stock Levels In Middle East Falling / EU Markets Underpinning Price Stability / FOB Price Stability Underpinned As SE Asian Log Supply Falls / Fears In Middle East Over Shipment Of Low Priced SE Asian Sawnwood / Improving Export Volumes And Prices In EUEast Africa: New Law To Stop Timber SmugglingAngola: Government Grants Concession Of Eucalyptus Forests To Angola Sovereign FundGhana: Forestry Commission Embarks On Plantation Plan / Healthy Export Growth In First 7-Months / Wood Exports To Nigeria ThreatenedMozambique: Obtala Resources To Spin Off Its Timber Business

25 | Foodstuffs & BeveragesRegional: AB Inbev Confirms It Has Financing For US$104 Billion Sabmiller TakeoverCote d’Ivoire: Laughing Cow To Be Produced In New Abidjan FactorySouth Africa: South Africa Promoting Premium Wines To Boost Exports / New Wine Export Classes / Lawmakers Press For Open Market On U.S. Poultry / More Fruit Transported Via Rail

37 | TobaccoKenya: Farmers In Dismay After Buyer Departure / Kenya To Lose Sh67 Billion From Cigarette MakersZimbabwe: Earnings At US$500 Million As Exports Grow 29% / Tobacco Production To Decline 30%

CMA CGM Group Upgrades Export Solutions For Citrus Fruit & VegetablesAs Morocco’s fruit and vegetable season begins, CMA CGM and its subsidiary OPDR have upgraded their services linking the Kingdom to the markets of Russia, North America, Europe, the Middle East and Africa where such products are consumed. Five export solutions will now offer 14 departures from Morocco per week calling at the Moroccan ports of Agadir, Casablanca and Tangier. Under the CMA CGM brand, the Group will directly connect Morocco to France, Spain, Belgium and the Netherlands. Meanwhile OPDR, CMA CGM’s subsidiary since July 1st 2015, will link Morocco to Spain and Northern Europe.

Agriculture is a key sector contributing 16.5% of the national GDP. CMA CGM has been the #1 carrier of agricultural products from Morocco across the globe for many years having been established in 2002. CMA CGM currently employs 1,200 expert staff who manage 17-liner calls with a specialism in the movement of refrigerated containers or reefers. Morocco’s exports include citrus fruits such as oranges and clementines as well as vegetables including tomatoes, zucchinis and peppers amongst many others. The port of Agadir is at the heart of this production and served by all 5-services as follows:

Service Brand Rotation Targets

DUNKRUS CMA CGMAgadir, Dunkirk, Rotterdam, Antwerp,

Vlissingen, Le Havre, Rouen, Vigo, Tangier, Casablanca, Agadir.

Russia, the largest consumer of Moroccan citrus fruits, is served via

Dunkirk. Direct connections to France, Spain, Belgium and the Netherlands.

AGAPOV CMA CGM

Agadir, Port Vendres, Barcelona, Valencia, Casablanca, Agadir,

Port Vendres, Algeciras, Tangiers, Ghazaouet, Casablanca, Agadir

Port Vendres served twice a week providing effective coverage of the South of France. Offers an

environmental friendly alternative and competitive transport time from road

transport.

Morocco Shuttle CMA CGM Casablanca, Agadir, Tangier,

Algeciras, CasablancaServes the United States/Canada via Algeciras on other Group’s services.

CISS OPDRAgadir, Huelva, Setúbal, Tilbury,

Rotterdam, Hamburg, Rotterdam, Tilbury, Tenerife, Las Palmas, Agadir.

Links to Spain and Northern Europe. Serves UK via Tilbury.

AGAX OPDRAgadir, Casablanca, Portsmouth, Rotterdam, Antwerp, Casablanca,

Gibraltar, Seville, Las Palmas, Agadir.

Links to Spain and Northern Europe. Serves UK via Portsmouth.3

COMMODITY NEWSCORPORATE

4

EthiopiaEthiopia Upgrades eTRADE PlatformEthiopia Commodity Exchange announced 9th October the inauguration of its revolutionary eTRADE Platform located at its headquarters on Chad Street. The platform has the capacity to trade nearly 5,000 times more transactions than its current “Open-Out-Cry” or “Pit-Trading” platform capacity. The platform was developed by the Exchange over the past 2-years and it is expected to dramatically increase trade efficiency, transparency and accessibility. The project came to fruition in collaboration with the Investment Climate Facility for Africa [ICF] and other partners. The ECX also made public the introduction of a new consolidated coffee grading system for the coming harvest season [see our coffee section].

Furthermore, the Exchange’s enhanced Short Message Service [SMS] / Interactive Voice Response [IVR] market data dissemination platform was also launched. First introduced in late 2011 in 2-languages [Amharic and English], users can either subscribe or request market information and receive real-time access to commodity prices traded at ECX. The enhanced version supports 2-additional languages [Oromiffa and Tigrigna] and introducing new features such as USSD [menu based information services] and enhanced user interfaces.

[ICF 09/10/15]

5

COMMODITY NEWSGENERAL

MozambiqueMozambique Places Ban On Banana Movement The Mozambican Ministry of Agriculture and Food Security has banned transportation of banana saplings and cane from 2-companies in the north of the country where Panama disease has been found. Panama disease, also known as fusarium wilt, is harmless to humans, but lethal to bananas. Where it takes hold, it can destroy 100% of the banana crop.

[APA 13/10/15]6

COMMODITY NEWSBANANA

RegionalNew VP For African Cashew Alliance The President of the National Cashew Association of Nigeria [NCAN], Tola Faseru, has been elected Vice –President of the African Cashew Alliance [ACA]. The EC is elected every two years by a General Assembly of registered and paid-up ACA members, and elected during the 9th ACA World Cashew Festival & Expo held 21-24 September in Maputo, Mozambique.

[The Nation 01/10/15]

Cote d’IvoireCote d’Ivoire Becomes World’s Leading Producer Of Cashew NutMinister of Agriculture, Mamadou Sangafowa Coulibaly, noted that cashew nut production has reached more than 700,000T this year, thus placing Côte d’Ivoire as the #1 world producer of cashew nut. Production has been growing around 10% over the last 5-years. Currently some 95% of the nuts produced are exported in raw form to India and Vietnam, the global centres for processing and significant producers in their own right. In the next five years, the government wants 30-40 % of nuts to be processed locally.

[Agent 09/10/15]

Viet Mold Machine Will Install A Cashew Processing Unit In YamoussoukroVietnamese Viet Mold Machine Co will install a cashew processing plant in Yamoussoukro with a capacity to transform 5,000T annually. The unit places Côte d’Ivoire one step closer to retiring India’s crown as the #1 processor. At the end of the last campaign Ivorian production reached 625,000T and is on course to reach 700,000 T this season.

[Ecofin 08/10/15]

Processing Units To Be Built In North West North-west Cote d’Ivoire will soon get 2-cashew processing units to be based in Karabiri and Séguélon according to UTEXI-COTIVO.

[Ecofin 28/10/15]

Mozambique/Guinea-BissauMozambique/Guinea-Bissau To Cooperate In Cashew Sector

Mozambique and Guinea-Bissau plan to cooperate in the cashew sector following the recent International Cashew Conference held in Maputo, Mozambique. Guinea-Bissau, the second largest producer of cashew nuts in Africa with an average of 200,000 tons per year, is seeking information about Mozambique’s experience in industrialisation of cashews. Mozambique, the fourth largest African cashew producer and one of the leaders in cashew nut processing in Africa, intends to improve its knowledge of cashew production.

Africa produces half of the cashew nuts sold worldwide, estimated at 3 million tons, but only processes 10% of this production. The Cashew Promotion Institute [Incaju] of Mozambique, advocated an increase in the processing in countries where cashews are produced. Mozambique plans to produce about 100,000 tons of cashews in the 2014/2015 season, 20,000 tons more than the previous season. The International Cashew Conference is the world’s largest forum for the product, linking research with production and the market by discussing issues such as business, ethical trade and organic production.

[Macauhub/GW/MZ 24/09/15]

7

COMMODITY NEWSCASHEW, GROUNDNUT & SHEA

GambiaNational Cassava Development Strategy ValidatedOn 6th October the Food and Agricultural Organisation [FAO] of the United Nations in collaboration with the Ministry of Agriculture and other stakeholders validated the National Cassava Development Strategy. The strategy will help transform production to make it an economic commercial-oriented sector contributing effectively towards the attainment of the Vision 2020 agenda.

[Observer 09/10/15]

NigeriaAfDB Lament On Poor ExportsDespite producing 50% of the world’s cassava, Nigeria exports less than 1% of its produce according to the African Development Bank [AfDB]. Nigeria produced 53 million tons of cassava in 2013 valued at US$16 billion but exported cassava produce valued at US$1 million.

[Nation 20/10/15]

ZambiaCassava Output To IncreaseZambia’s cassava production is expected to be boosted following the African Development Bank’s [AfDB] approval of a US$30 million loan. The move will support the development of the cassava value chain with a focus on the commercialisation of cassava products through local and regional market linkages, technology and innovation and enabling government policy reforms.

[Mail 21/10/15]

8

COMMODITY NEWSCASSAVA

RegionalOlam Buys Archer Daniels’s Cocoa Business For US$1.2 BillionTrading company Olam has acquired Archer Daniels Midland’s global cocoa business for US$1.2 billion, extending the Singapore-based company’s position from sourcing raw cocoa to processing the beans into the powders and butters used to make chocolate. The deal, first announced in December last year, catapults the Singapore-based commodities firm into the top tier of global suppliers to the chocolate business.

The agreement signed October 16th, boosts Olam’s processing capacity to about 700,000T, behind only Barry Callebaut and Cargill Inc. with operations in major producing countries Ivory Coast, Nigeria, Ghana and Brazil as well as coming markets in Europe, the United States, Canada and Asia. The combined entity will be looking to source from around 850,000T to 900,000T annually. Olam is also looking at increasing its interest in the Japanese market. Japanese trading house Mitsubishi Corp bought a 20% stake in Olam in August.

Olam’s cocoa business will continue to be headquartered in London although the company has opened a new office outside of Geneva where the Switzerland-based staff from ADM will be relocating. The acquired business was expected to generate earnings before interest, tax, depreciation and amortization [EBITDA] of between US$180-200 million including synergies in 2018.

[Reuters 16/10/15]9

COMMODITY NEWSCOCOA

Olam Sees 2015/16 Global Cocoa Deficit Of 150,000 TonnesOlam is forecasting a global cocoa deficit of 150,000T in the 2015/16 season. Dry weather in top producing West Africa has impacted crops during development over the last 2-3 months reducing its size. The International Cocoa Organization [ICCO] also forecast a deficit of around 96,000T in the 2015/16 season.

Cocoa supplies were tightened in the 2014/15 season by a much lower-than-expected crop in Ghana with Olam putting last season’s output at 750,000 tonnes, down almost 20% from a year earlier. The fall in production in Ghana last year was due to poor timing of pesticide and fertilizer application, followed by heavy losses from insect damage. And the weather in Ghana had been the driest in 30 years during the July-September period. Dry weather could also curb production in Indonesia, the world’s #3 producer, where Olam is forecasting a crop of around 330,000T.

Global cocoa grindings were expected to rebound in 2015/16 with a rise of about 2% after a drop last season of 4%. Consumption fell less sharply than grindings last season leading to a drawdown in cocoa product stocks.

[Reuters 17/10/15]

Ecobank Report See Price Rise As Production FallsAccording to Ecobank cocoa prices will rise as production in Cote d’Ivoire falls back as well as in Nigeria and Cameroon. Meanwhile the outlook for Ghana is clouded by uncertainty. The 4-countries account for over 70% of the world’s cocoa production between them. With global demand recovering and expectations of a global deficit this season, Ecobank expects prices to strengthen further, noting the potential for price spikes ahead of the new season starting in October, as farmers hold back beans in expectation of higher fixed prices coming season.

Ecobank restated its forecast for Cote d’Ivoire to fall by 100,000T to 1.1 million tonnes with a potential for a large drop in the mid-crop, mostly sold at a discount to the local processing industry, should weather conditions turn unfavourable. Trees cannot sustain such record-high growth as they suffer cyclical fluctuations in yields. Output for the current season is on track to exceed 1.77 million tonnes, ahead of last year’s record crop of 1.741 million tonnes. Dry weather has also raised concerns, as rain in July and August was down by half from the previous season, although it remains within the 5-year average. September rainfall will be a critical factor for the health of the crop. And the prospect of a strong El Nino weather pattern threatens to severely impact the mid-crop, cutting total output by up to 5%. El Nino is associated with dry weather in West Africa.

However factors that support Ivorian production include an increase in the price paid by the government cocoa body, which will encourage farmers to harvest more beans. There was also a spate of tree plantings when cocoa prices peaked following a political crisis in 2011, which are now begin to produce crops.

The outlook for Ghana is uncertain, as the grower comes out of a slump in production. Total production for the season just ending is expected to total around 700,000T, 23% down from the previous season. Ecobank forecast a modest rebound in Ghana’s crop, to 800,000T, but noted that Cocobod will need to keep back up to 200,000T of cocoa to cover contracts from the 2015-16 season, left unfulfilled due to the shortfall. Stakeholders remain divided over the true causes, noting that structural and cyclical factors could persist next season, impairing the rebound. Cocobod will distribute free fertilizers to farmers, and continue with a mass spraying programme but it is unclear how effective these measures will be.

Nigeria and Cameroon are also facing poor prospects for their 2015-16 cocoa season thanks to unfavourable weather. Ecobank forecast cocoa production in Nigeria and Cameroon at 210,000T and 200,000T respectively.

[Agrimoney 28/09/15]

10

World Cocoa Foundation President ResignsThe World Cocoa Foundation [WCF] announced the resignation of Bill Guyton who has served as president since it was founded in 2000. Guyton will remain in the position to 31st December. Guyton’s tenure as WCF president witnessed significant growth in the organization’s membership, which began with a handful of chocolate and cocoa companies and now consists of more than 100 companies from around the world. During the same period, WCF expanded from its Washington-based headquarters and opened offices in Côte d’Ivoire and Ghana, which lead global cocoa production. A successor is yet to be named.

[PRNewswire 13/10/15]

Cocoa Demand Exceeds ExpectationsAccording to the European Cocoa Association the European cocoa grind, the volume of cocoa beans being processed into butter and powder, rose by 2% to 334,000T. Cocoa grinding is treated as a proxy for consumer demand for cocoa products. This marks the second 3-month period in which European production has risen, following a straight 12-months of declining demand. European cocoa grinding is now at its highest level since the start of 2014.

The rise in demand comes despite a sharp increase in cocoa pricing over the same period. Cocoa has bucked a bearish agricultural commodities trend, helped by disappointing production in Ghana. Cocoa beans were the best performer in the Standard & Poor’s GSCI index of raw materials.

Data from the Association of the German Confectionery Industry [BDSI], suggests a resurgence in German grinding drove the strength of demand. German production was seen up 16% y-o-y, at 101,000T. But grinding data for North America is expected to show a decline of up to 10% from last year’s record demand. Malaysian data suggests that Asian grinding figures may be weaker as well. Malaysian grinding was seen down 20% y-o-y, at under 50,000T, although up from last quarter. Malaysia has been taken over by Indonesia as the largest grinder in Asia. And the Ivory Coast, the world’s top producing country, superseded the Netherlands as the world’s top grinder as well, in the crop year just finished. Asia is a net exporter of cocoa powder and butter, to European and North American markets, so an increase in African grindings would primarily eat into Asian market share.

[Agrimoney 14/10/15]

11

COMMODITY NEWSCOCOA

CameroonExports Reach 28,286 Tonnes By End SeptemberCameroon’s cocoa exports rose over 31% to 28,286T in September since the start of the cocoa season in August, up from 21,516 tonnes during the same period last season. According to the National Cocoa and Coffee Board [NCCB] September shipments from Africa’s 4th biggest producer totalled 16,230T, an increase of nearly 35% from 12,056T in August and up over 9% from 14,849T in the same month a year ago. Telecar Cocoa Ltd was September’s top exporter shipping 6,521T of beans, followed by Camaco with 1,956T and Olam-Cam with 1,890T.

Cameroon’s cocoa season runs from Aug. 1 to July 1. The main harvest is from October to January/February, followed by a light crop harvest period from April/May to June/July. The Central African country’s cocoa output hit 232,530T last season, not far off a record 2010/11 harvest of 240,000T. Cameroon’s government is trying to encourage young people and women to grow the crop and to prevent illegal exports to neighbouring countries, in the hope of raising cocoa output to 600,000T by 2020.

[Reuters 08/10/15]

CICC Assess Marketing Program The Interprofessional Council of Cocoa and Coffee [CICC] on 6-7th October conducted an assessment of the pilot phase of its AOC program launched in Lékié in 2013. Thanks to the program bean volumes transparently marketed have evolved over the past 2-seasons. In 2014-2015, more than 18,000T of beans had been formally marketed with producer prices between 1150-1525 CFA francs.

The AOC program aims to group producers in cooperatives to better supervise the organization of group sales to obtain better prices as well as the development of statistics to monitor marketing and production activities. Instead of 529 unions of 25,000 producers in Lékié there are now 9-cooperatives in each of the regional districts with structures being capped at departmental level by the Fédération des Unions de Coopératives des Cacaoculteurs du Centre [FUCCAC].

After the department of Lékié, AOC is to implement the scheme in the departments of Nyong-Ekelle, in the Center and Boumba and Ngoko in the East.

[Ecofin 08/10/15]

Production To Drop 20,000 TonnesThe Bank for Central African States [BEAC] in its Q4 forecast of the evolution of economic activities noted the sector will witness a slowdown with production to reduce from 230,000 to 210,000 MT. According to these estimates from the National Cocoa and Coffee Board, [ONCC] production will drop 20,000 MT. ONCC reported that the previous season produced 206,550 MT down 9% on the 2012/2013 season.

[Tribune 03/10/15]

Telcar Cocoa Pays Kumba’s Producers 400 Million FCFA PremiumA 400 million FCFA check was awarded to 5,000 producers of certified cocoa from Cameroon’s South-Western region as premium for the last production season. This check was offered by Telcar Cocoa, Cargill’s local dealer, who launched in 2011 a mentoring and training program for Cameroon’s producers of certified cocoa. More than 10,800 producers have been trained since the program began. Out of these, more than 5,000 were certified.

[Business In Cameroon 05/10/15]

12

Cote d’IvoireICCO To Move To AbidjanThe International Cocoa Organization [ICCO] said it will begin moving its headquarters from London to Abidjan, Cote d’Ivoire, following an improvement in the security situation in the world’s top producer. The ICCO originally agreed to relocate from London in 2002 but civil unrest disrupted the process which was subsequently suspended. The relocation will begin on Oct. 1 and should be completed at the latest by March 31, 2017.

The inter-governmental body, which has been based in London since its founding in 1973, originally sought to stabilise global prices through operating buffer stocks but has more recently provided statistical data and supported projects to develop cocoa production and trade.

Meanwhile the ICCO also noted Executive Director Jean-Marc Anga had launched the process of recruiting his successor. He has been in the role since 2010. The organisation aims to elect a new Executive Director at a council meeting in September 2016.

[Reuters 28/09/15]

Firms Offer Deal To End International Contract BoycottIvorian cocoa exporters have offered a deal to major trading houses aimed at ending their boycott of government allocated international supply contracts. The Coffee and Cocoa Council [CCC], Ivory Coast’s sector regulator, uses an electronic auction system to allow international firms not present in the world’s top cocoa grower to purchase Ivorian cocoa. Under a scheme to develop the domestic industry introduced in the 2014/15 season, the CCC gave domestic exporters exclusive control over those supply contracts, which are expected to account for around 200,000 MT of cocoa this season. However, major cocoa buyers have largely boycotted the 2015/16 international contracts, arguing that the local firms lack the necessary capacity and financing. Last month, the GNI group of domestic cocoa firms wrote to trading houses to propose conditions it hoped would allay concerns highlighted by the international companies. In this deal, each party knows in advance what they have to do which should facilitate relations. Under the deal proposed by the GNI exporters, CIF [Cost, Insurance and Freight] contracts could be transformed into FOB [Free On Board] agreements. Purchasers would choose delivery destinations and would also be involved in overseeing quality controls. The GNI has reportedly contacted U.S. traders Cargill and Archer Daniels Midland, Swiss firms ECOM Trading and Barry Callebaut, France’s Cemoi and Singapore’s Olam International.

In an attempt to circumscribe the boycott, the CCC said last month that it would resell at a discount to international buyers around 200,000 tonnes of 2015/16 beans purchased by domestic operators. However, many wary buyers continued to stay away. The 2015/16 cocoa marketing season opened in Ivory Coast on 1st October.

[Reuters 01/10/15]

13

COMMODITY NEWSCOCOA

Licenses 113 Cocoa Exporters For 2015/16 SeasonAccording to the Coffee and Cocoa Council regulator 113 companies and cooperatives were granted cocoa export licenses for the 2015/16 season up from 80 last season. The CCC normally puts out a second exporters’ list during the season.

[Reuters 28/09/15]

Arrivals Hit 214,000T By Oct. 25Cocoa arrivals at ports reached about 214,000T by Oct. 25 since the start of the season on Oct. 1st up from 164,000T in the same period the previous season. About 69,000T of beans were delivered to Abidjan and San Pedro ports between Oct. 19 and Oct. 25, up from 46,000 tonnes during the same period last year.

[Reuters 26/10/15]

Rains Improve Main Crop Cocoa ProspectsAbundant rains in principal growing regions raised hopes for the October-to-March main crop, although some concerns about disease remain. The marketing season began this month following a record harvest of 1.8 million tonnes in 2014/2015 was reported. However, despite good rainfall and an increase in the minimum farmgate price, the new 2015/16 cocoa season might be lower due to irregular precipitation in the months before the start of the season.

[Reuters 12/10/15]

Eastern Output Hit Over Lack Of RainPoor rains in eastern cocoa-growing regions will reduce output and delay the start to the main October-to-March harvest. Growing conditions here often vary from those in the state’s western cocoa heartland. While the east’s older plantations yield lower volumes of cocoa, their beans are much in demand among exporters due to their reputation for being better fermented and conditioned by farmers. Inadequate rainfall will cut production and potentially lead to a global deficit in the coming. Since June there’s been little flowering and a high mortality rate of cherelles [small pods] in July and August. Farmers hope to see improved rainfall soon in order to boost production in the second half of the main crop, however some traders are not overly optimistic. The nation opened the main crop harvest on 1st October with the farmer price expected to be raised to around 1,000 CFA francs [US$1.71].

[AGWeek 30/09/15]

Arrivals Up Year-On-Year At 145,000 TonnesArrivals at ports reached around 145,000T by 18th October since the start of the season on 1st October up from 118,000T in the same period of the previous season. Exporters estimated around 72,000T of beans were delivered to Abidjan and San Pedro between 12-18th October up from 48,000T during the same period last year.

[Reuters 19/10/15]

14

GhanaCocoa Season EndsThe Ghana Cocoa Board announced that purchases of the 2014/2015 Cocoa crop season will end by close of business on September 30th The statement signed by James Kofi Kutsoati, Deputy Chief Executive, Operations, advised all licensed buying companies to wind up all operational activities before the opening of the 2015/2016 main crop season.

[GNA 28/09/15]

Ghana Expects Output Rebound As New Season StartsGhana forecasts a rebound in cocoa production to 850,000-900,000 MT in the season that started on 2nd October after disappointing output in 2014/15. Cocoa is Ghana’s most important export crop but a lack of rainfall across the cocoa belt has raised fears among farmers and industry officials that the world’s number two grower could be facing another poor crop. A senior government official said cocoa purchases in the just-ended 2014/15 season stood at 735,000 tonnes as of Sept. 24. Final figures for the season have not yet been announced.

[Reuters 03/10/15]

Government Announces 21% Increase In Producer PriceThe Government has sanctioned a 21.74% increase in the producer price of cocoa for the 2015/2016 crop season effective 2nd October. Deputy Finance Minister Cassiel Ato Forson announced the government will pay 6,720 cedis [US$1,759] per tonne from 5,600 cedis paid in the just-ended season. The purchase price is crucial to deter smuggling into neighbouring Ivory Coast, the world’s leading producer. Ivory Coast set its producer price at US$1,718 per tonne.

The Producer Price Review Committee [PPRC] on cocoa has agreed on the upward adjustment from 350 cedis to 420 cedis on a 64-kg bag with a 5 cedis bonus on top. When the bonus is included the price per tonne is 6,800 cedis, which is equivalent to 74% of the net free on board [FOB] rate. The current price per tonne is 6,720 cedis from the previous 5,520 cedis representing an increase of 1200 cedis. The committee has also agreed on the payment of a 5 cedi bonus per cocoa bag to farmers.

[Reuters & CitiFM 03/10/15]

Olam Notes Driest Period In 35 Years Threatens CropGhana’s cocoa production may be smaller than forecast as the driest third quarter in 35 years threatens the crop in the # 2 producer, according to Olam International Ltd., which became the world’s third-largest processor of the beans after buying a unit of Archer-Daniels-Midland Co. The nation’s crop may fall short of Olam’s forecast for 750,000 MT if dry weather means the smaller of two annual harvests declines from last season’s level. Cocoa futures traded in New York climbed 9% this year as Ghana’s crop fell short of forecasts.

[Bloomberg 22/10/15]

COCOBOD Supplies 5 Million SeedlingsCocobod has distributed 5,548,052 improved cocoa seedlings to farmers in the Ashanti Region as part of steps to boost production. Seedlings are not only high-yielding but early maturing and disease resistant. Some 8,000 cocoa farmers have benefitted. This activity is spearheaded by the Cocoa Research Institute, Ghana [CRIG].

[Ghanaweb 01/10/15]

Mondelz International Well-Being ProgramFourteen global Mondelz International employees will serve in cocoa-farming communities in Ghana during a 2-week skills-exchange program in late October. Coming from 10-countries the “Joy Ambassadors” will learn directly from farmers about the challenges and opportunities in securing a sustainable cocoa supply, while sharing their diverse business skills. This effort is part of the company’s Call For Well-being program. As the largest buyer of cocoa in the world, Mondelz International is committed to ensuring a sustainable cocoa supply chain by implementing programs on the ground, most notably Cocoa Life. Launched in 2012, this US$400 million program aims to empower over 200,000 farmers and more than 1-million people in 6-key cocoa growing origins by 2022.

[Nasdaq 30/09/15]

15

COMMODITY NEWSCOCOA

5-Year US$750 Million Cocoa Roads Project In the next 5 years, major cocoa roads are to be constructed to solve problems associated with moving cocoa beans from the farm gates to buying centres. The Ghana Cocoa Board [COCOBOD] in collaboration with the government has rolled out the Cocoa Roads Rehabilitation Programme. Implementation is expected to cost US$150 million annually over 5-years. The project is to be executed in phases having started with the presidential ground-breaking ceremony back in June this year at Adeiso and Kyebi in the Eastern Region. In all, a total of 628 km of roads have been earmarked for construction under Phase 1 of the project. The Cocoa Roads Rehabilitation Project is wholly funded by COCOBOD.

[Business News 04/10/15]16

NigeriaMondelez International Invests US$50 Million In New PlantMondelez International has invested more than US$50 million for a state-of-the-art production facility to meet surging demand for CadburyBournvita, Nigeria’s favorite cocoa drink. The investment supports the company’s global growth strategy by expanding the availability of regional Power Brands like CadburyBournvita in key markets and creating a more efficient supply-chain footprint. Production capacity for CadburyBournvita will be boosted by 30%. The new Lagos plant is fully automated and replaces an older facility that could not support necessary expansion plans, including the installation of new equipment.

[MarketWatch 20/10/15]17

COMMODITY NEWSCOCOA

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)

1 Oct 15 2256.81 3160.24 2121.67 3107.00

2 Oct 15 2251.25 3153.90 2111.33 3097.00

5 Oct 15 2242.46 3150.37 2116.33 3091.00

6 Oct 15 2242.24 3146.48 2111.67 3081.33

7 Oct 15 2232.35 3140.67 2099.00 3067.67

8 Oct 15 2220.34 3128.52 2084.67 3066.67

9 Oct 15 2208.57 3117.33 2077.67 3056.67

12 Oct 15 2227.37 3143.86 2084.33 3090.67

13 Oct 15 2252.13 3179.15 2129.00 3117.00

14 Oct 15 2243.99 3173.43 2098.33 3107.67

15 Oct 15 2235.40 3169.62 2091.67 3106.67

16 Oct 15 2254.18 3185.04 2107.00 3118.67

19 Oct 15 2291.56 3236.09 2140.00 3165.67

20 Oct 15 2307.41 3263.64 2156.33 3194.67

21 Oct 15 2273.46 3212.02 2127.67 3137.00

22 Oct 15 2271.42 3206.11 2126.33 3140.00

23 Oct 15 2284.93 3199.82 2133.67 3130.00

26 Oct 15 2326.01 3248.38 2159.67 3182.00

27 Oct 15 2332.23 3262.28 2177.33 3193.67

28 Oct 15 2346.69 3281.71 2186.67 3213.67

29 Oct 15 2355.09 3280.99 2187.33 3217.00

30 Oct 15 2363.73 3301.83 2193.67 3213.6718

RegionalCoffee Prices Lowest In 2-YearsLatest records from the International Coffee Organisation [ICO] indicate that coffee prices continued their downward trend in September, with the monthly average of the ICO composite indicator falling by 6.7%, the largest monthly decrease since March. This monthly value of US$113.14/lb is the lowest level since January 2014, although the daily prices did recover slightly towards the end of the month. All 4-group indicator-Columbian Mild, Other milds, Brazilian naturals and Robustas were lower compared to August, with the strongest decreases observed in the 3-Arabica groups.

[Monitor 21/10/15]

Ethiopia Exchange To Have Full Traceability SystemThe Ethiopian Coffee Exchange [ECX] is building a supply chain management system to ensure the complete traceability of commodities. This fully integrated solution will assure cross-channel visibility starting with coffee, from origin through the coffee processing [milling], sampling, grading/cupping, deposit, delivery, further milling by buyer/local exporter, and export to international buyer/roasters. The track and trace engine will be essential to meeting the demands of sustainability standards recognized in the region and around the world. Frequentz has teamed up with Wavetec and IBM to build and operate system.

[MarketWatch 30/09/15]

Ethiopia To Host International Coffee ConferenceThe Ministry of Trade announced that Ethiopia in collaboration with International Coffee Organization [ICO] will host the 4th International Coffee Conference March 6-11, 2016. The conference is expected to bring together 1,200-1,500 participants drawn from ICO member countries and local participants engaged in coffee production, export, buyers, coffee researchers and other stakeholders.

[Herald 02/10/15]

For more information visit: http://www.ico.org/documents/cy2014-15/Presentations/114-council-4th-world-coffee-conference-ethiopia.pdf

19

COMMODITY NEWSCOFFEE

KenyaKenya To Consume More CoffeeCoffee consumption in Kenya is projected to grow, following the entry of more players in the local coffee retail business. A report by Ecobank Research shows that per capita coffee consumption in Kenya is still very low at 0.07/kg. It notes that in spite of its low consumption, growth is expected due to the emerging urbanised middle class which will continue to stimulate demand for consumer goods, including coffee. This growth could provide the impulse to revitalise Africa’s coffee sector and overcome its perennial problems which include weak and inefficient agricultural value chains, high production costs and the lack of a domestic market for the final product, all of which prevent African producers from extracting the full value from coffee and instead exporting the bulk raw to world markets.

[Business & Tech 29/09/15]

Value At Auction Falls 18% In 2014/15According to the Nairobi Coffee Exchange [NCE] the value of coffee sold at Kenya’s auctions fell 18% to US$142.5 million in the crop year to September, hit by lower volumes. Kenya exports much of its coffee through the exchange and the rest is sold by growers directly to foreign buyers. Drought conditions early in the year affected crop especially in the central Kenya growing areas and that has reflected in the overall performance.

The NCE sold coffee worth US$174.1 million in the 2013/14 season that runs between October and September. Officials said 568,766 60-kg bags were sold during the period, down from 671,438 the previous year. The average price at the exchange also dropped to $205.02 per 50-kg bag from $212.70 the previous year.

[Reuters 19/10/15]

20

South SudanExporting Coffee For The First TimeTechnoServe, a non-profit organisation that works with smallholder farmers, is trying to revive the coffee farming industry in South Sudan. The country will export coffee for the first time this month when limited edition capsules go on sale in France. One day it hopes to compete with countries in the region such as Ethiopia, Kenya and Rwanda that are world famous for their beans.

[Guardian 08/10/15]

TanzaniaOutput Down / Prices Rise At the latest Moshi auction the average price of Arabica coffee rose by US$2.23/50kg bag whilst Robusta jumped up by US$4.57/50kg. During the 29th Sept. auction, 21,154 bags of Arabica were put forward for sale with 20,331 sold. This is a slight decrease from the beginning of the month when 23,236 bags were offered. Robusta levels offered was a miserly 483 bags, a drop of 2,500 bags.

According to the Tanzania Coffee Board’s [TCB] current output levels are well below their stated aims thanks to a mixture of poor weather, poor crop control and smuggling. Many farmers are beginning to abandon coffee as their main crop due to low monetary rewards.

An overreaching scheme was launched back by TCB in 2011 which would hopefully see the coffee production increase from the present average of 50,000T to 80,000T by 2016 and 100,000T by 2021. In the year leading up to June 2015, the Bank of Tanzania [BOT] recorded 45,700T of coffee exports down from 2013-14’s total of 49,700T.

[World Coffee Press 29/09/15]

UgandaExports Jump 38% In SeptemberAccording to the Uganda Coffee Development Authority [UCDA] coffee exports in September rose 37.7% y-o-y as good prices encouraged farmers to sell. UCDA noted a total of 286,322 60-kg bags had been shipped last month, up from 207,923 bags exported in September 2014. Uganda exported 3.46 million bags in the 2014/15 [Oct-Sept] crop year, down slightly from 3.5 million the previous year. Coffee is Uganda’s leading commodity export. UCDA said shipments in the 2014/15 crop year earned the country US$410 million, up from US$394 million the previous year.

[Reuters 20/10/15]

21

COMMODITY NEWSCOFFEE

CameroonRaw Cotton Production Up In 2014/15 SeasonCameroon’s raw cotton production has risen to 290,142 tons in the 2014/15 season, representing a sharp increase from 235,000 tons in the previous season. The Cotton Development Company [SODECOTON] noted the increase is due to many factors, including the decision last season to start growing genetically modified [GM] cotton to reduce the heavy reliance on pesticides, increase in the total surface area cultivated, and government assistance to farmers in form of input subsidies as well as financial assistance from local banks.

The cotton season in Cameroon runs from November to April but, this year, it took three more months for the exact statistics to be obtained because of frequent attacks in growing areas by Boko Haram. Cotton is grown in the Far-North, North and Adamawa regions, where it is the main cash crop.

Prices being paid to farmers have gone up to 285 francs CFA/US$0.5/kg but SODECOTON foresees rising this in the coming years so as to encourage more people to go into production and completely end illicit trafficking to neighbouring countries. However, lower demand this year from China, the main official buyer of Cameroon raw cotton, and the drop in prices on the world market, could again spell tough times for SODECOTON in the coming years. Cotton is the sixth main export product.

[Xinhua 12/10/15]

22

COMMODITY NEWSCOTTON

MaliCrop Target Missed Due To Late RainsAccording to the state-owned CMDT cotton company, Mali will miss this year’s cotton production target of 650,000T as late rains in the Sahel region have struck the start of the harvest. Rains are damaging stocks of picked fibre and cotton still in the fields. The cotton harvest began mid-October. Mali had targeted production of 650,000T of raw cotton for the 2015-2016 season, up from output of roughly 550,000T the previous year.

[Reuters 19/10/15]

ZimbabweGinners To Pay Seed Cotton Price Adjustments

The Cotton Ginners Association of Zimbabwe [CGAZ] is finalising the payment of grade based cotton prices to farmers indicating that first disbursement will be made end of this month. Due to unavailability of grading technology at most buying points ginners were paying an initial payment of 30 cents/kg [equivalent to grade D] of seed cotton produced in 2014/15 farming season. Other grades are A, B and C. Electricity shortages contributed to the delay in the price top ups. Meanwhile registration, contracting and collection of the first tranche of inputs for the forthcoming season, will run concurrently with the payments of price adjustments.

Zimbabwe produced 112,554 MT of lint [processed cotton] in 2014, majority of which is exported to countries such as China and India due to lack of yarning technology in Zimbabwe. The exportation of lint has resulted in reduced benefits for growers across the region and an incomplete cotton value chain. This has led to reduced production as growers have given up on the crop opting for other cash crops such as tobacco, maize, sorghum and millet where possible.

In the 2015 cotton marketing season, 88 000 MT of seed cotton have so far been collected from farmers from an expected crop of about 95 000 MT. The crop size last season was 136 000 MT. Apart from inadequate yarning capacity in the region, decline in the production can also be attributed to extreme weather, poor distribution of rain and a decline in cotton price on the international market due to stiff competition from alternatives such as synthetic fibre. The reduction in the crop size is not only typical of the Zimbabwean crop but there are similar experiences throughout the whole Eastern and Southern African regions where countries like Tanzania, Zambia, Malawi and Mozambique also had a downward spiral in cotton production.

In Zimbabwe cotton is grown mainly in drier parts of the country such as Muzarabani and Mount Darwin [Mashonaland Central province], Chipinge [Manicaland province], Gokwe [Midlands province] and Chiredzi [Masvingo province].

[Southern Times 26/10/15]

23

COMMODITY NEWSCOTTON

Cape VerdeCape Verde Approves Legislation To Combat Illegal FishingForeign fishing vessels are now required to apply for prior authorisation to enter or use Cape Verde’s ports and to land or transfer fishing catches. The statute approved by the government, called the National Action Plan to Prevent Illegal Fishing, aims to ensure sustainability and conservation.

[Macauhub/CV 30/09/15]

KenyaChinese Firm To Set Up Fish Processing PlantChina’s Beijing Xidan Company Limited will build a US$9 million ultra-modern fish processing plant in Naivasha in the Nakuru country, about 120 km northwest of Nairobi. Construction is expected to begin in early 2016.

[African Farming 07/10/15]

Kenya Partners With China To Increase Fish ProductionA partnership between Great Lakes University and the China Fisheries Academy in Henan province has started a process to increase fish production in East Africa. The US$19 million agreement promises to improve the region’s food security by introducing hybrids that reproduce and mature in a short time. The project is expected to push up domestic supply of fish over the next couple of years and reduce production.

[Fish Site 06/10/15]

24

COMMODITY NEWSFISH

RegionalAB Inbev Confirms It Has Financing For US$104 Billion Sabmiller TakeoverAnheuser-Busch InBev sought to reassure investors that its US$104 billion takeover of smaller rival SABMiller was on track, despite needing another week of talks, by confirming it had financing for the deal. The Budweiser brewer said the funding could be raised at short notice although it gave no further details. The debt package is being provided by 21 banks and could amount to as much as US$70 billion. A deadline for the bid has been extended until 5 p.m. London time on Nov. 4th. SABMiller sought the extension as both sides want more time to shore up shareholder support and financing. AB InBev agreed to pay 44 pounds a share in cash for a majority of SABMiller stock earlier this month after weeks of haggling over price.

[Bloomberg 27/10/15]

Cote d’IvoireLaughing Cow To Be Produced In New Abidjan FactoryFrench Le Bel, producer of the famous Laughing Cow cheese, is to open a mini-facility in Abidjan at a cost of €4-5 million. The move will test the market before making a larger investment. The group is already present in the Morocco, Algeria and Egypt.

[The Drum 19/10/15]

25

COMMODITY NEWSFOODSTUFFS / BEVERAGES

South AfricaSouth Africa Promoting Premium Wines To Boost ExportsSouth African wine makers are promoting higher-priced product to boost exports in established European import markets. They are also trying to establish export business in the US and Asia, where they hardly have a presence. Wine exports fell to 422.7 million litres last year from 525.6 million litres in 2013, according to the Wines of South Africa trade body. Exports in 2015 may be on par with last year’s or rise just above that, with packaged-wine exports expected to increase as much as 5%. Bulk export shipments are expected to fall by about the same amount.

[RW Freight 05/10/15]

New Wine Export ClassesThe South African Wine and Spirit Board [WSB] made amendments to its wine regulations. WSB certification sets the quality standard for all wines being exported from the country, as well as providing comprehensive data on a wine’s origin, content and age through its Wine of Origin scheme. The amendments include the introduction of 6-new classes of wine – skin-macerated white, extended barrel-aged white/gris, natural pale/non-fortified pale, methode ancestrale, alternative white/red and sun wine.

[Drinks Business 30/09/15]

Lawmakers Press For Open Market On U.S. PoultrySenators Johnny Isakson, Tom Carper and Chris Coons called on the Obama administration to hold South Africa accountable for missing an Oct. 15 deadline aimed at opening up that market for U.S. poultry. The move would remove a 100% tariff on U.S. chicken implemented in 2000. According to them South Africa failed to finalize both the trade protocol and health certificate for U.S. poultry despite the administration’s intense engagement with South Africa over the past year to resolve these issues. They noted that South Africa must take the necessary steps to resolve outstanding barriers to U.S. poultry immediately if its AGOA [African Growth and Opportunity Act] benefits are to be preserved. The AGOA trade deal, signed by President Obama in June, requires an out-of-cycle review of South Africa’s trade practices, specifically antidumping duties on U.S. poultry, if the agreement isn’t fulfilled.

[The Hill 20/10/15]

26

More Fruit Transported Via RailAlthough South Africa has an extensive rail infrastructure running from most of the fruit production areas to the ports, currently 99% of fruit for export is transported from the production regions to the ports by truck. A recently renewed collaborative effort between the South African Fruit industry, Transnet Freight Rail, Transnet Port Terminals and the Transnet National Ports Authority [TNPA] is currently achieving good results in moving fruit transport from road to rail with the use of specialised reefer trains which transport fruit in refrigerated containers.

The fruit sector annually produces approximately 2.655 million pallets of fruit for export in production regions across the country. Some are more than 1,000 km from the ports from which the fruit is exported. A study completed by Fruit South Africa [FSA] indicates that fruit is transported to ports by approximately 135,000 road truck trips annually. This amounts to around 480 million kilometres at a cost of R969 million. In South Africa the cost of transport has increased by up to 47% since 2009.

In response to this situation the fruit industry established an initiative in order to promote the return to the use of rail transport. The Rail Transport Working Group has the sole aim of promoting the use of rail for fruit exports. The working group has existed for 5 years and was initially under the auspices of The Fresh Produce Exporters’ Forum. During 2015 the project was moved and became a Fruit South Africa [FSA] portfolio. Under FSA this directive has gained new momentum and is producing good results. FSA has determined that between citrus, avocados and grapes up to 12,000 refrigerated containers; 10% of the total fruit export volume, could potentially be transported annually by rail from production regions to ports for export.

Transnet Freight Rail [TFR] Cape Town notes that the trains transport perishable products, these trains receive priority on the rail lines and that the train’s transit time from Tzaneen to Cape Town is roughly 48 hours. The train also transports empty containers for packing to Tzaneen on the return route. Although the service has been running for a number of years volumes have increased sharply this year and this is largely due to better support of the service by the Fruit Industry. Transnet Port Terminals [TPT] work closely with TFR to co-ordinate the timing of the arrival of the reefer trains and they prioritise the allocation of sufficient resources to receive and offload the containers. The train’s siding in the port is conveniently close to the electrical plug-in stacks and the unloading process can be completed within a short turnaround time. The citrus season [May to September] is a quiet period for the Port of Cape Town during this period and thus has sufficient plug-in stacks and other resources to handle the current and potential increase of volumes of citrus for shipment through the port. Loading ships In Cape Town is often hampered by strong winds but TPT also has equipment to allow for ship loading even in strong winds.

In 2011 less than 300 containers were transported to the port by train. Currently there are 2-trains operating between Tzaneen in Limpopo and the ports of Cape Town and Durban transporting refrigerated containers packed with citrus for export. In the 2015 citrus season it is estimated that 900 containers [18,000 pallets] will be transported from Tzaneen to Durban and Cape Town and during 2016 this is expected to increase to 1,500 containers. The trains are currently only able to transport 38 containers per train however Transnet will soon be making available 10 extra carriages that are customised to carry containers per train and so each train will be able to transport 48 containers per trip. In addition Transnet is also in the process of constructing 3-new 48 carriage unit trains that will be operational and available to the fruit industry by the middle of 2016.

The cost reduction of transporting the fruit to port in bulk by rail can be further increased if on the return journey the train is able to deliver empty refrigerated containers for packing to the inland production regions. This process allows fruit exporters to pack the fruit into refrigerated containers directly at the production source and for implementing best cold chain practice from source to destination. This also negates the need to transport the individual pallets to the port by truck for containerisation in the port. The pallets of fruit that are packed into containers at the production region are handled 6 times from packhouse to container while individual pallets transported to port in trucks can be handled up to 18 times. The extra handling is costly and potentially damaging to the fruit in the cartons. The time factor of packing containers in the port can take several days and can delay the departure for fruit while containers packed and railed from production regions often reach the marketplace up to ten days earlier than fruit containerised in port. This difference in shipping time can have a significant effect on potential returns for the grower and shipper.

Moving freight into the ports in bulk is more convenient for the port operations to concentrate on dealing with the intake of one large consignment [a train with 38 or more containers] than with many smaller consignments [many trucks each arriving with one container]. Durban port regularly experiences severe congestion during the fruit season. Road trucks transporting citrus, often in ambient temperature, regularly have to wait for hours to be attended to and this can have an adverse effect on the quality of fruit. Moving containers of citrus by rail from Limpopo to Cape Town makes complete sense.

[Citrus Growers Association of Southern Africa 08/10/15] 27

COMMODITY NEWSFOODSTUFFS / BEVERAGES

For more information about the Citrus Growers Association view http://www.cga.co.za/site/default.asp

28

RegionalADM Raises Stake In Wilmar International LtdArcher-Daniels-Midland Co. [ADM] raised its stake in Wilmar International Ltd., the Singapore-based company that trades almost half the world’s palm oil, as demand for the commodity. ADM purchased 22% of shares on the open market. It declined to disclose its current total stake.

[Bloomberg 20/10/15]

Indonesia Turns To West Africa To Boost Palm Oil ExportsIndonesia is expanding its markets to several African countries to offset the decline in demand from its main export destinations, especially the US, Europe and China. The Indonesian Palm Oil Producers Association noted that local palm oil producers were expanding their markets to West African countries, where demand for crude palm oil [CPO] was on the rise on the back of growing economies and relatively stable politics. Total CPO exports to Africa reached 1.3 million tons or US$416.2 million in the first 7-months of this year, already close to the 1.7 million tons exported in 2014. Meanwhile exports to China declined to 1.9 million tons in the January-July period from 2 million tons during the same period last year.

According to the Indonesian Textile Association [API] textile producers have also been trying to tap deeper into the African market. Egypt, Nigeria and South Africa are popular export destinations within the African market for garment exporters.

[Jakarta Post 29/09/15]

GhanaSustainable Palm Oil ForumA 1-day forum on sustainable palm oil in Africa was held in Accra, Ghana, organised by Solidaridad West Africa and Proforest, with the support of the Roundtable on Sustainable Palm Oil [RSPO]. The forum, which was on the theme, “Sustainable palm oil in Africa: Getting it right from the start”, brought together oil palm growers, civil society, financial institutions, development partners, government officials and key experts to share knowledge and experience about how to improve sustainable palm oil production in Africa. There has being moves to introduce production guidelines. The Tropical Forest Alliance [TFA], 2020 Africa Palm Oil initiative, spearheaded by Proforest, has developed some principles to aid production of palm oil in Africa. With non-certified palm oil gradually being removed from international palm oil trade take up is crucial.

[Graphic 01/10/15]

29

COMMODITY NEWSPALM OIL

KenyaKenya Writes Off Sugar Company Debts Ahead Of PrivatisationKenya has written off US$381 million owed by state-owned sugar companies, aiming to ease their planned privatisations. The government in May approved the sale of the government’s holdings in 5-sugar companies and said it expected to sell 75% stakes, in transactions to be completed in the following 9-12 months. The companies - Nzoia, South Nyanza, Chemelil, Muhoroni and Miwani - are in need of modernisation to survive competition from the entry of other sugar producers and an impending end to sugar import quotas from the Common Market for Eastern and Southern Africa [COMESA] trade bloc.

East Africa’s biggest economy, struggling to improve output amid relatively high production costs, produces 600,000 T of sugar a year, compared with annual consumption of 800,000 T. The deficit is covered through the strictly controlled imports from COMESA. Yet the domestic industry is enduring tough times and the leading producer, Mumias Sugar, this month posted a 6.31 billion shillings [US$60 million] pretax loss for the year through June, hurt by falling revenue due to lower production volumes. In March, the government reached a 5 billion shilling deal with banks to help the cash-strapped miller as it implemented a reorganisation involving heavy job cuts. The government has already given 1 billion shillings as part of the bailout.

[Reuters 03/10/15]

TanzaniaTanzania Offers 60,000 Hectares For Sugar DevelopmentThe government has allocated 60,000 ha for investment in large-scale commercial farming for sugar and rice located in Mkulazi area. The Tanzania Investment Centre [TIC] is coordinating the investment. The site is situated alongside the TAZARA railway line linking Dar es Salaam with the Zambian border, approximately 100 kms from Dar es Salaam and 60 km from the Dar es Salaam-Morogoro highway. Through the Southern Agricultural Growth Corridor of Tanzania [SAGCOT] initiative commercial developers will gain from complimentary investments by the government, donors and other private investors in infrastructure, input-supplies, out-grower training and finance.

[EA Business Week 03/10/15]

ZimbabweStarafrica Upbeat On New Sugar Import TaxSugar producer Starafrica Corporation expects to enjoy the positive impact of a new sugar import tax regime in the next quarter of its financial year as demand for the local product is seen booming when imported stock runs out. Government introduced a 10% custom duty plus US$100 per tonne on imported sugar to limit imports that were taking a toll on the local industry. Prior to the new tax system, Starafrica had shut down its production plant for 2-months. Now it targets to produce 300T per day by next month.

[Independent 09/10/15]

30

COMMODITY NEWSSUGAR

BurundiBurundi To Produce Tea Worth US$23 Million This YearAccording to the Burundi Tea Office [OTB] revenue from tea production this year in Burundi is estimated at US$23 million due to bumper harvest forecast at 11,000 tons by the end of 2015. Last year, production was 10,500 tons, an increase of 9.73 percent. The average price of Burundi’s tea at Mombasa auction is also the best ever and tops that of Rwanda, Kenya and Uganda. It is set to US$3.05/kg, while it was US$2.16/kg last year. Thus, the average price of Burundian tea is currently 4773 FBU/kg at Mombasa auction. The previous year it was 3328 FBU/kg, an increase of 42%. Ultimately the turnover will be US$23 million at the end of the year, against 27 billion Burundian francs last year, a figure never achieved by OTB.

[Star Africa 26/10/15]

KenyaGrowers Seeking More Lucrative ReturnsKenyan tea growers are diversifying into higher-priced varieties as tastes change and prices of the black variety of the beverage the East African producer is known for becoming volatile. Growers are either planting a new variant with purplish leaves or converting production from the common bush to more lucrative types; white, green and orthodox. In Meru county in central Kenya, grower Njeru Industries has 60 ha under purple bushes and has been exporting 60,000kg annually to Japan at US$30/kg. In comparison, the top grade of conventional black tea, of which Kenya is the world’s biggest exporter, sold for about US$3.12/kg at the latest auction whilst white tea earns US$40/kg.

The United Nations’ Food and Agriculture Organisation [UNFAO] sees supply and demand for black tea “in equilibrium” at a price of about US$2.81/kg compared to an average of US$2.59/kg this year. Prices may drop by as much as 40% by 2023 if producers around the world increase supply by about 5%, the FAO said in a statement, advising grower nations to promote domestic demand and diversify into organic and specialist teas to protect earnings.

Drought this year may cut black-tea output by a 10th to about 400,000 tons, according to the government agency. The drop in supply has pushed average prices up by about 43% this year, after they fell 26% in 2014, according to data from Tea Brokers East Africa Ltd.

Kenya exports 95%of the tea it produces. Top buyers include Britain, Egypt and Sudan, whose purchases help generate about US$1 billion of foreign-currency earnings annually. Most of it is black tea sold an auction in the port city of Mombasa. The weekly sale that handles over 70% of tea exported from Kenya would require large volumes before trading specialty types. To curb action by growers, the government is now mooting a fund to guarantee farmers a minimum price when prices slide.

[Bloomberg 28/10/15]

31

COMMODITY NEWSTEA

RegionalAfrican Nations And Donors Agree Plan To Protect Congo ForestsSix African nations have agreed with donors on a plan to protect the tropical forests of the Congo basin, the second biggest in the world after the Amazon’s, to help ease poverty and combat climate change. The plan, called the Central African Forest Initiative and agreed during UN talks in New York, covers Central African Republic, Democratic Republic of Congo [DRC], Cameroon, Republic of Congo, Equatorial Guinea and Gabon.

Donors are Germany, France, Britain, Norway and the European Union. Brazil, the main nation in the Amazon basin, is an advisor to the project, which also involves UN agencies and the World Bank. Norway, the first donor to announce a pledge for the project, will give US$47-million annually from 2016-20. The UN Development Programme led project will address issues concerning unsustainable agriculture, wood energy use, forestry and infrastructure development will be the main challenges. The project also aims to slow illegal logging and burning of forests. Forests in the region cover about 2-million km2 –the size of Mexico – but are shrinking by 5,600 km2 a year.

[Reuters 30/09/15]

32

COMMODITY NEWSTIMBER

Central/West AfricaBuyers For China Remain On The Side-LinesWest African producers report that buyers for the Chinese market are still on the side-lines so mills are scaling back log harvesting as well as mill production in an attempt to maintain prices at current levels. There are some reports of buyers seeking sawn okoume but the prices being offered are much lower than previous contracts. Some mills are accepting the reduced offer prices but only for small volumes.

[ITTO 01-16/10/15]

Stock Levels In Middle East FallingConstruction and building activity remains buoyant in most of the main Middle East markets which is sustaining demand from builders in the region. Importers in the Middle East rely on an extensive and efficient regional distribution network to supply customers and reports suggest the flow of wood products is good such that stocks are being absorbed. As stock levels in the Middle East fall producers in West and Central Africa anticipate a rise in orders despite the continuing cautious attitude of buyers given the recent supply of low cost meranti.

[ITTO 01-16/10/15]

EU Markets Underpinning Price StabilityProducers report that demand in European markets is firm and prices are stable and that this is assisting them inmaintaining price levels in other markets. Demand for okoume logs and sawnwood for the Chinese market is slow and prices have not recovered. FOB prices for okan and sapele are also under pressure as demand slows but for most of the other timbers prices are stable.

[ITTO 01-16/10/15]

33

COMMODITY NEWSTIMBER

FOB Price Stability Underpinned As SE Asian Log Supply FallsWest African FOB log prices have remained stable in spite of the low demand from the main buyer; China. Log harvest levels have been reduced and there has been a degree of trading between domestic companies in order to adjust supply and avoid a build-up of log stocks. The current FOB price stability for West and Central African logs has been underpinned by rising SE Asian log FOB prices. In Sabah and Sarawak, for example, log availability has fallen in recent months.

[ITTO 16-30/09/15]

Fears In Middle East Over Shipment Of Low Priced SE Asian SawnwoodThere are no signs of a recovery in demand for logs or sawnwood for the Chinese market and this has promptedmillers to cut production or temporarily close the mills. The short-term prospects for prices depend now on buyingactivity for the EU and Middle East markets. Analysts report that Middle East buyers still have lingering fears of an overall weakening of prices due to some low priced material being shipped from SE Asia and this has resultedin them holding back on future contracts until the situation becomes clear.

[ITTO 16-30/09/15]

Improving Export Volumes And Prices In EUAfrican exporters find their European business has been improving in terms of both volume and price signalling a solid foundation to demand. For the past 2-3 years EU importers have very carefully managed stock levels of tropical timbers but as the economies in some EU member states improve there has been an increase in timber consumption for infrastructure projects, housing and renovation works which encouraged importers to expand stock levels. West and Central African plywood production and export is relatively small in terms of world trade but demand and price levels in the traditional European markets have been sustained in spite of the recent weakening of Asian panel prices.

[ITTO 16-30/09/15]

34

East AfricaNew Law To Stop Timber SmugglingA proposed law by the East African Legislative Assembly seeks to stop smuggling of forest products like timber and sandalwood across the region. The Bill provides regulations for management and protection of national forests and trans-boundary ecosystems and seeks to regulate trade in forest products. The EALA is now partnering with East African Farmers Federation and the Centre for International Forestry Research to amend some clauses in the EAC Forest Management and Protection Bill 2015.

[Star 23/10/15]

AngolaGovernment Grants Concession Of Eucalyptus Forests To Angola Sovereign FundFundo Soberano de Angola [Angola Sovereign Fund – Fsdea] will take over the concession of existing eucalyptus plantations in the provinces of Benguela, Huambo and Huila, according to a presidential order. The move is based on the high economic potential of the eucalyptus plantations. The forests are still the responsibility of the Ministries of Agriculture, Transport and Industry.

[Macauhub/AO 08/10/15]

35

COMMODITY NEWSTIMBER

GhanaForestry Commission Embarks On Plantation PlanThe Forest Services Division of the Forestry Commission [FC] has embarked on yet another massive reforestation programme. To be known as “Push to Promote Reforestation“, the FC is offering financial support and other incentives to spur private initiatives in plantation development specifically targeting farmers and private investors. Those opting into the scheme would receive financial assistance and other material rewards. The amount of cash offered would depend on area to be planted and beneficiaries will receive payments biannually as long as the plantations are tended. The Division is working with the EU on this programme within the “Carbon Credit initiative”.

[ITTO 01-16/10/15]

Healthy Export Growth In First 7-MonthsGhana exported a total 207,051 cu.m of wood products during the period January to July 2015 up 17% year on year. The corresponding value for exports in the same period was euro 105.77million, up 47% year on year. The main export products in the January to July period were sawnwood [air and kiln dry], plywood to regional markets, teak poles and billets of teak, wawa, ceiba, gmelina and papao/apa. According to the Timber Industry Development Division [TIDD] of the Forestry Commission the leading exporters were Samartex Timber and Plywood Company Ltd., Logs and Lumber Ltd., Reagent Industries Ghana Ltd., John Bitar and Company Ltd. and Wular International Company Ltd.

[ITTO 16-30/09/15]

Wood Exports To Nigeria ThreatenedGhana‘s exports of wood products [mainly plywood] to Nigeria could be threatened if a pending new regulation from the Nigeria Central Bank is implemented. It has been reported that this new regulation would bar importers of some specified goods, including wood products, from accessing official Nigerian foreign exchange markets. If the new regulation comes into force importers will be required to look for alternative sources of foreign exchange. This plan by the Central Bank of Nigeria forms part of measures to contain its fast-depleting foreign exchange reserves. Nigeria is a major importer of Ghana‘s wood products particularly plywood.

[ITTO 16-30/09/15]

MozambiqueObtala Resources To Spin Off Its Timber BusinessObtala Resources PLC announced plans to spin off its timber business in Mozambique into a separate entity. The vertically integrated agribusiness, timber and retail company plans to list the separated company on London’s AIM market in Q1 2016. The company is, subject to local government approval, completing the acquisition of 50-year leases for 2-new timber concessions totalling 35,000 ha in Mozambique to bring the total forestry area to 314,965 ha. Back in March, Obtala signed heads of agreement with South Africa’s Kishugu International Holdings Ltd to allow Obtala to enter the South American timber market.

[Times 15/10/15]

36

KenyaFarmers In Dismay After Buyer DepartureMore than 10,000 tobacco growers have not begun harvesting their crop following the departure of a leaf buyer. Alliance One Tobacco Company has moved to Uganda and Zimbabwe where the leaf is cheaper and of high quality. The growers are still pondering what to do with the thousands acres of tobacco, before they switch to other crops. Investors are being sought. Migori accounts for 70% of production in Kenya. The industry collectively pays out over Sh1.7 billion every year to farmers in the county. Alliance Tobacco Kenya, which is the biggest leaf merchant, was spending Sh1.2 billion on Migori farmers annually. BAT Kenya and Mastermind Tobacco also operate in the region, though marginally. BAT leased its leaf centres in Kuria West, Kuria East and in Migori to Alliance One.

[Daily Nation 02/10/15]

Kenya To Lose Sh67 Billion From Cigarette MakersKenya will lose up to Sh67 billion from cigarette companies in taxes in the next ten years under the new excise laws. A report, Cigarette Taxation in Kenya at a Crossroads: Evidence and Policy Implications, has dismissed the recent tax policy change in the Amendment to the Excise Duty Bill 2015 as contrary to best practice in tobacco taxation. It notes that new law departs from the original Bill that had called for an increase in the excise rate while retaining the existing uniform tax structure. The report argues that Kenya has now embraced the tiered specific excise tax structure which would lead to a reduction in the excise tax rate for economy brands, no change for mid-price brands, and a slight increase for premium brands.

[Standard Digital 24/10/15]

37

COMMODITY NEWSTOBACCO

ZimbabweEarnings At US$500 Million As Exports Grow 29%Tobacco exports have increased 29% as at October 9, earning the country US$500 million compared to US$406 million last year. The Tobacco Industry and Marketing Board [TIMB] noted Zimbabwe had exported 102.3 million kg of tobacco at an average price of US$4.90/kg compared to 79 million kg at US$5.14/kg last year.

China bought 26.3 million kg of the leaf at an average price of US$8.14 per kg totalling US$214.4 million. Belgium last year’s biggest buyer has so far bought 12 million kg worth US$50.3 million at an average price of US$4.17/kg. And neighbouring South Africa bought 10 million kg worth US$30.8 million at US$3.08/kg.

TIMB said the country had realized a 32% fall in tobacco imports to 1.8 million kg from 7.6 million kg last year. Zambia remained the main source of tobacco imports which are used for blending purposes by local manufacturers supplying the country 919,800 kg at an average price of US$1.49 per kg valued at US$1.3 million.Imports from India totalled 305,529 kg at an average price of US$4.61 valued at US$1.4 million.

[New Zimbabwe 27/10/15]

Tobacco Production To Decline 30%Tobacco production is likely to be reduced in the 2015/2016 summer cropping season on the back of subdued grower participation and low seed sales. Data from the Tobacco Industry and Marketing Board shows that 56,000 growers have so far registered for the season compared with 72,000 in the same period last year. Figures on seed sales are also down to 685,000 grams which translates to 314,000 ha according to the Tobacco Research Board [TRB]. Erratic rainfall has made summer cropping preparations a challenge for farmers without irrigation facilities.

[Zimbabwe Daily 23/10/15]

38