Com-Watch - Delmas

COM-WATCH
The African Commodity Report
This month’s top stories...
Antwerp To Develop World's
Largest Cocoa Port
Burundi Coffee Farmers to
Withhold Crop, Seek Control
Issue 8: January 2012
Cocobod Mandates Banks For
3-Year Finance Facility
Sugar Investor Seeks 20,000
Hectares In Rwanda

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CASHEW
MOZAMBIQUE
Study In Mozambique To Determine Real Production Of Cashew
Government Plans To Increase Cashew Production To 200,000 Tons Per Year
NIGERIA
Nigeria Targets 3900% Increase in Cashew Output
Nigeria Makes N23b Yearly From Cashew
TANZANIA
Tanzania Mtwara Farmers Get Tech to Produce Cashew Juice
CAMEROON
November Cocoa Beans Improved For Export
Cameroon Cocoa Exports At 64,937 Tonnes
Cameroon Crusher Aug-Oct 2011-2012 Season Cocoa Intake Down On Year
COCOA
COTE D’IVOIRE
Antwerp To Develop World's Largest Cocoa Port
Low Export Demand Pummels Ivorian Cocoa Price
Ivorian Cocoa Buyers Seek End To Grinders Tax Break
Ivory Coast Cocoa Arrivals Running 14% Up On Last Year
Strong Harmattan Worries Ivorian Cocoa Farmers
Ivory Coast Starts Cocoa Forward Sales In January
Dry Weather Darkens Cocoa Outlook In West
GHANA
Cocobod Mandates Banks For 3-Year Finance Facility
COCOBOD Releases US$200 Million For Roads Construction
Ghanaian Cocoa Purchases Up 16% Year-On-Year
Olam, Rainforest Alliance Launch US$1 Million Ghana Cocoa Project
NIGERIA
Main Cocoa Peak Harvest Under Way Amid Low Prices
Output In Nigeria's Cross River State Drops 50%
UGANDA
Cocoa Exports Projected To Rise Next Year
GENERAL
Cocoa Demand To Rise 1-Million Tons
Cocoa Caps Longest Slump in 50 Years
Olam Warns of Global Deficit
Daily Spot Price [ICCO]
COFFEE
ANGOLA
Robusta Coffee Production In Angola Rises By 42.8% In 2011
BURUNDI
Burundi Coffee Farmers to Withhold Crop, Seek Station Control
Com-Watch Issue 8: January 2012
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CAMEROON
Cameroon Coffee Production Falls 39%
Cameroon Blames Coffee Export Drop On Arab Turmoil
Cameroon Exports 36 Tons Arabica Coffee In Opening 2011-2012 Season
Cameroon Exported 29,027 Tons Robusta Coffee In Dec-Oct
Cameroon Introduces Chemical Use & New Species To Fight Coffee Disease
COTE D’IVOIRE
October Robusta Coffee Exports Down 44% On Year
ETHIOPIA
New Ethiopian Coffee Directive Retracted
Price Drops On Increased Supply
KENYA
Kenyan Coffee Prices Climb 21%
TANZANIA
Tanzania Arabica Coffee Poor Take Up
Tanzania Coffee Prices Rise, Eyes On Euro Zone
Tanzania’s Top Coffee Grade Falls 5.8% on Increased Supply
UGANDA
Coffee Development Authority’s Robusta Prices
Coffee Exports May Fall by 9.6% in December on Rains
Uganda’s Coffee Exports Decline 15% In November
GENERAL
World Coffee Production to Decline This Season
Higher Robusta Crop May Cap Coffee Prices
COTTON
China To Support C4 Countries On Cotton Production
US Pledges US$16 Million in Aid to Africa’s C-4
Association of African Cotton Producers Hold AGM
Cotton Forecast Cut as Global Outlook Sours
Cameroon Raises Cotton Price To Curb Smuggling
Malawi’s 2012 Cotton Output to Rise More Than Threefold
FISH
Unsuccessful EU Negotiations To Renew Agreement With Mauritania
FOODSTUFFS
Maputo Port Citrus Operations & Logistics Cost Assessment 2011
South Africa’s Transnet Looks To Bolster Grain Facility
FG Plans Two Rice Mills In Niger
Feronia Completes Largest Single Rice Planting In Congo
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PALM OIL
Cussons Invest US$612 Million In Nigerian Palm Oil Refinery
Palm Oil Trade Fair In Africa
European Industry Proposes Zero-Duty On Sustainable Palm Oil
Ghana Benso Oil Palm Makes Profit
RUBBER
GMG Unit Signs S$535 Million Cameroon Rubber Deal
SHEA NUTS
Steering Committee On Sheanut Inaugurated In Ghana
Government To Establish Sheanut Factories In Ghana
SUGAR
Sugar Investor Seeks 20,000 Hectares In Rwanda
Sudan Opens Processing Plant
Ethiopia to Construct Sugar Factories
Cargill Replaces Head Of Sugar
TEA
BURUNDI
Burundi Tea Export Earnings Jump In Nov
Burundi Oct Tea Export Earnings Up 29%
KENYA
Mombasa Tea Auction Faces Crash
Week 51: Kenya Top Grade Tea Prices Hold Steady
Week 50: Kenya Tea Prices Slide
RWANDA
New Plants Planned to Boost Tea Exports
UGANDA
Kisoro Gets Sh530 Million For Tea Growing
TIMBER
Price Levels Unchanged As New Export Markets Absorb Increased Output
Producers Track Demand Trends To Avoid Overproduction
Chinese Preference For ‘In Fashion’ Species Amid Slowing Demand
Market Prospects For 2012 Hinge On Resolution Of EU Debt Crisis
Ghana Export Permits Drop By A Third In July-September Period
Ghana Regional, Middle East And Asian Markets Sustain Price Levels
National Forest Forum Calls For Abridged Version Of Forestry Laws
Agreement Reached Regarding CAR Wood Imports
Fallsway In US$1.5m Plant Expansion
Exporters See Slight Cooling In Business For The Chinese Market
Demand For Padouk, Sipo & Sapele Remains Strong And Sustained
A Steady Flow Of Orders For Some EU Markets Keeping Prices Stable
Brisk Demand In India And Vietnam Offsets Weaker Chinese Market
Demand From South Africa And Middle-East Countries Helps Maintain Market Stability
Global Green Carbon Announces First REDD+ Project in Cameroon
Ghana Third Quarter Exports Continue Downward Trend
This report is brought to you by the Delmas Marketing Department.
This document aims to give our customers a thorough insight into the latest commodity news affecting West Africa. By using
our local agency network within West Africa we will provide you with up-to the minute strategic information.
Disclaimer of Liability
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.
www.delmas.com Page 2

Cashew >>
MOZAMBIQUE
Study In Mozambique To Determine Real Production Of Cashew
Mozambique’s National Cashew Institute [INCAJU] plans to launch a study to assess the impact of the informal
sector on the sale of cashew nuts. The 4-months study aims to determine more clearly the average annual
cashew nut production in Mozambique. According to the Institute cashew nut production refers to the nuts sold,
but there is a very important sector, which is informal and involves purchasing, domestic processing and
domestic sale, both on an internal level and an external level.
An initial study carried out demonstrated that Mozambique’s real production could be double what is
announced, a figure based on the amount of cashews sold on the official market. It is estimated that over 1,400
families use cashews as their main source of income and in the current campaign 105,000 tons are expected
to be sold, as compared to 113,000 tons last year. [Macauhub 01/12/11]
Government Plans To Increase Cashew Production To 200,000 Tons Per Year
The newly launched Cashew Master Plan II for the cashew sub-sector plans to boost cashew production 80%
over the next 9-years to 200,000 tons per year by 2020. Over the same period, the plan also aims to increase
the amount of nuts processed by the national cashew industry from the current 30,000 to 100,000 tonnes a
year. Spraying will continue to cover around 5,000 cashew trees per year, planting will increase, new
production technology will be introduced and other types of investments will also be made.
Average cashew production currently stands at around 105,000 tons per year, most of which is exported
unprocessed to countries such as India, due to a lack of capacity in Mozambique to process the cashew nuts.
Mozambique plans to focus on medium-sized companies and aims to achieve a domestic processing capacity
of around 100,000 tons by 2020, as compared to 38,000 tons at the moment. [Macauhub 12/12/11]
Com-Watch Issue 8: January 2012
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Cashew >>
NIGERIA
Nigeria Targets 3900% Increase in Cashew Output
As one of its strategies to increase the volume of non-oil exports and diversify the nation’s economy, Nigeria is
currently targeting an increase of cashew output of up to 3,900% in the next few years. To achieve this, the
Bank of Industry [BOI] is partnering the African Cashew Alliance [ACA] to increase the production of cashew
nuts in the country from 10,000 tonnes to 400,000
tonnes per annum. The 2-bodies formed a strategic
partnership with the Raw Materials Research and
Development Council [RMRDC].
Currently Cote d'Ivoire has the highest production
volume in Africa, with 350,000 tonnes per annum.
The ACA believes Nigeria has the potential to
surpass this.
‘
Our aim is to see that Nigeria
becomes a major player in the
cashew industry: we are
already a major player but we
want to be number one.
’
The African cashew industry has the potential to
realise more than US$300m in raw nut sales by
Prof. Peter Onwualu, Material Research and
smallholder farmers and US$300m in added value Development Council
from cashew processing. The main measures to be
taken include promoting cashew sector development
as a priority in donor platform and in government investment.
The move was initiated not only to boost the foreign exchange earning capacity of the commodity, but due to
the fact that cashew cultivation and processing for export has potential to create jobs. Nigeria is currently the
7th largest producer of cashew in the world after India, Brazil, Vietnam, Cote d'Ivoire, Guinea Bissau and
Tanzania with production exported in raw form to India and Vietnam for processing and export, with added
value and benefits to those economies. [This Day 05/12/11]
CASE STUDY: FG To Commission Cashew Processing Plant In Ogun
The Government has concluded plans to establish a cashew processing plant in Abeokuta, Ogun state
capital before the end of the year. The Raw Material Research and Development Council [RMRDC]
disclosed that the cashew plant project was collaboration between the RMRDC and the University of
Agriculture and also revealed that more processing plants are being considered.
The project would consolidate upon the Council’s cluster development programme which led to the
establishment of a cashew processing plant in Kogi state. The RMRDC also wants to look into the
supply side. Many plantations in Nigeria are aging so the council is discussing proposals with relevant
stakeholders how to replant. At present Nigeria exports 80% of its cashew to India, Vietnam and
Brazil missing out on value added processing. [Nigeria Compass 02/12/11]
Nigeria Makes N23b Yearly From Cashew
Nigeria earns N23 billion yearly from cashew production according to the National Cashew Association.
Revenue comes from 100,000 tonnes produced annually. The association’s agenda is to increase its national
production to 200,000 tonnes annually, adding that the development would make Nigeria an important
participant in the world cashew market.
In spite of the multi-faceted benefits of cashew, processing is largely non-existent and that 95% of cashew
exported as raw nuts overseas. [The Nation 13/12/11]
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Cashew >>
TANZANIA
Tanzania Mtwara Farmers Get Tech to Produce Cashew Juice
The United Nations Industrial Development Organisation [UNIDO] is providing cashew nut farmers in Mtwara
Region with modern technology to produce juice and wine from the crop. The technology also enables the
farmers to get higher grade nuts by using factories set up by the UN agency. [Tanzania Daily 05/12/11]
Com-Watch Issue 8: January 2012
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Cocoa >>
CAMEROON
November Cocoa Beans Improved For Export
Reduced rainfall in November boosted the size of cocoa beans produced in the South-West Region, the main
cocoa-producing area, and helped to ease post-harvest handling of the crop. The area, which accounted at
least 40% of the country's total 240,000 metric tons of cocoa beans output in the 2010-2011 season, had
suffered severe rainfall for about 5-months, rendering post-harvest cocoa handling very difficult, especially in
drying the crop. Quality controllers recorded good sizes of beans ranging between 78-83 beans/100g for cocoa
beans, which came from the South-West Region in November.
Apart from the fact that there was very little trace of smoke recorded for the cocoa beans, the sizes of the
beans were bigger than those of October. Farmers were able to dry their crop after rainfall began reducing in
intensity. South-western cocoa beans controlled at the wharf in October measured between 80-82/100g,
slightly bigger than the 80-83/100g beans measured in September. But the harvest suffered from smoke
contamination, as fire-powered mud-brick ovens were used to dry the crop in the heart of intense and
prolonged rainfall. The controllers noted the cocoa was well-dried, mould-free, and had no dampness, making
it fine for export. [Dow Jones 06/12/11]
Cameroon Cocoa Exports At 64,937 Tonnes
Cameroon exported 27,524 tonnes of cocoa beans in the month of October, bringing the total for the season
so far to 64,937 tonnes, according to statistics from the National Cocoa and Coffee Board [NCCB]. That is
down on the 69,702 tonnes exported by the same point last season. The country has exported 64,937 tons of
cocoa since the season started compared with 71,702 tons the previous year. The data, confirmed by the
Cocoa and Coffee Interprofessional Board [CCIB] also showed a decline in the month compared to the 33,930
tonnes exported in the same month last season. CCIB attributed the drop to persistent heavy rainfall during the
month in the leading South-West and Centre growing regions which slowed down the drying process.
The Cameroon Marketing Commodities [CAMACO], the second main exporter based in Kumba in the
South-West, noted that the rains further deteriorated the poor state of earth roads, hampering produce
evacuation from remote areas. Cameroon's cocoa season runs from August 1 to July 31, with the main harvest
period from October to January/February. The Centre and South-West regions account for 40% each of the
country's cocoa production and the remainder comes from the South and East regions, although cultivation is
extending rapidly to the Littoral region as well as the deep valleys with warm temperatures of the high plateau
West, North-West and Adamawa regions. [Business Recorder 04/12/11 & Bloomberg 01/12/11]
Cameroon Crusher Aug-Oct 2011-2012 Season Cocoa Intake Down On Year
The Cameroon branch of the Switzerland-based Barry Callebaut AG [Sic Cacao SA], bought 8415 tons of
cocoa beans in between August and October, 3-months into the ongoing 2011-2012 cocoa season of the crop.
The Cocoa and Coffee Interprofessional Board [CCIB] noted the company bought and crushed 11,287 tons in
between August and October of the last season. In October, Sic Cacao bought 3,241 tons of cocoa beans to
grind into powder, down from 5,325 tons it bought and crushed in October of the last season. The cocoa
season in Cameroon officially runs from August of each year to through July of the previous year.
Sic Cacao's total cocoa beans intake for last season was 28,413 tons, up 37% on the 20,734 tons in the prior
year. Sic Cacao is Cameroon's lone certified industrial crusher for chocolate and other by-products, with an
annual grinding capacity of 30,000 tons. The Swiss company Barry Callebaut owns 70% of Sic Cacao, while
the Cameroon government has the remaining 30%. Chocolate produced from Sic Cacao is marketed mainly in
Cameroon and the surrounding ECOWAS region. Cameroon produced 240,000 tons of cocoa beans in the last
season, a record high from 197,939 tons the country produced in the 2009-10 cocoa season.
[Dow Jones 05/12/11]
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Cocoa >>
COTE D’IVOIRE
Antwerp To Develop World's Largest Cocoa Port
The Port of Antwerp has outlined its planned collaboration with the
world's largest cocoa port, San Pedro in the Ivory Coast.
Up to 2000-ha of vacant land is to be developed at the West African
port under a master plan finalised last month by the Port of San
Pedro and Port of Antwerp International [PAI], the international
subsidiary of the Antwerp Port Authority.
Logistics zones are to be developed in the hinterland of the port,
which handles between 1.5 and 2 Mtpa, including the cities of
Odienne, Touba and Man. Further space in San Pedro will be
freed up to handle other commodities including rice, cashew nuts,
fertilisers and cotton.
PAI and San Pedro first agreed to explore avenues of potential
collaboration in October 2010. The new development is ultimately
designed to boost traffic in Antwerp binding freight and customers to Antwerp.
Corresponding deals are being sought in Mali, East Guinea and South East Liberia to help develop San Pedro
on a regional scale. Port professional training will be provided by APEC, Antwerp Port Authority's training
vehicle. A joint port day between Antwerp and San Pedro will be held in 2012. [World Cargo News 12/12/11]
Low Export Demand Pummels Ivorian Cocoa Price
Cocoa farmgate prices in Ivory Coast extended losses amid soft demand from local grinders and exporters,
triggering a round of panic selling by growers. The fall in prices to around 550 CFA/kg from over 700 CFA/kg at
the start of the season has already revived smuggling operations to Ghana, where prices are stabilized by the
government.
Prices in Daloa averaged around 550 CFA/kg last week from 600 CFA/kg the week before. In the western
region of Soubre, at the heart of the cocoa belt, farmers said prices were in a range of 500-550 CFA/kg, down
from 600-650 CFA/kg the previous week.
In Gagnoa, farmers said the average price was ranging around 500 CFA/kg from 550 to 600 CFA the previous
week. Around Abengourou in Ivory Coast's east, prices were about 530 CFA/kg, well below the 900 to 950 CFA
being offered by illegal buyers across the border in Ghana.
The slump in Ivorian farmgate prices comes amid a decline in demand from local grinding companies as well
as from exporters at the ports of Abidjan and San Pedro. Grinder warehouses and factories are full of beans.
And to add to that, the prices at the port are weak which discourage the growers.
The price for a kilogram of cocoa at the port of San Pedro fell to a range of 650 to 675 CFA from more than
725 the previous week. Prices at the port of Abidjan were 675 CFA to 700 CFA/kg, down from 750 CFA the
previous week. Many chocolate makers in Europe had already stockpiled cocoa prior to Ivory Coast's
legislative elections on December 11 and were in no hurry to take on new supply.
Cocoa futures prices have slumped to multi-year lows but got a brief jolt upward earlier this week after Olam
forecast a global cocoa deficit, in part due to a decline in production from Ivory Coast. [Reuters 15/12/11]
Com-Watch Issue 8: January 2012
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Cocoa >>
Ivorian Cocoa Buyers Seek End To Grinders Tax Break
Major buyers of Ivorian cocoa have urged the government to cut a 20-year old tax break given to local
grinders, arguing the incentive handed grinders an unfair market advantage. Members of an international and
local buyers association, which includes France-based commodities firm Sucden and leading cocoa trader
Armajaro, said in a letter to Ivorian authorities the tax benefit distorted the market.
The Ivorian government introduced the tax incentives during the 1991/1992 cocoa season to encourage
investments in the country, create jobs in the cocoa sector and increase the country's grinding capacity. The
tax benefits were supposed to last for five years and are in the form of a reduced DUS ["droit unique de
sortie"] tax, the main cocoa export tax. Until the 2008/09 cocoa season, the tax was fixed at 220 CFA/kg
[$0.44], while for grinders, the tax was reduced by about 70 CFA/kg.
This subsidy cost the Ivorian government about 34 billion CFA
[US$67.11 million] in 2010 and enables local grinders to buy
more beans from cooperatives and producers. It is argued
that this has as immediate consequence, a monopoly
situation that could in the medium and long term, force
buyers out of the procurement system at the farm
level.
The association urged the government to cut the tax
exemption, saying buyers will not be able to match
prices paid by local grinders at farmgate level in the
long run, thus pushing them out of the market.
The tax exemptions have been in place for nearly
20 years instead of 5 years as was intended, local
grinders such as Cargill and Barry Callebaut and
ADM had recovered the capital invested in plants
and therefore did not need the exemptions. Cargill,
ADM, Barry Callebaut and Cemoi are the top four
grinders, crushing between 415,000 and 450,000 tonnes
of cocoa annually.
Barry Callebaut and Cemoi are planning to increase their grinding capacity in 2012. In 2010, Ivory Coast
became the world's top cocoa grinder with a capacity of 532,000 tonnes, turned mainly into cocoa butter and
powder. The cocoa grinders have however said the incentives does not give them any advantage and that
removing them could hurt the local grinding industry and even push some to move plants to neighbouring
Ghana, the world's second-biggest producer after Ivory Coast.
The Ivorian government is carrying out reforms in the sector, which it has said will guarantee farmers receive
at least 60% of the market price for the cocoa they produce. The latest draft of the sector reform in November
said the revision of the tax benefits would be decided after an impact analysis on employment and grinding
capacity. [Reuters 28/12/11]
Ivory Coast Cocoa Arrivals Running 14% Up On Last Year
Cocoa arrivals at ports in Ivory Coast reached 578,368 tonnes by December 18 since the start of the season
in October, up 14% from the 506,970 tonnes recorded in the same period a year ago, according to data from
Bourse du Cafe et Cacao. The figures showed 60,140 tonnes of beans were declared at the ports of Abidjan
and San Pedro from December 12 to 18, up from 36,727 tonnes in the same week of the 2010/11 season.
[Public Ledger 23/12/11]
www.delmas.com Page 8

Cocoa >>
Strong Harmattan Worries Ivorian Cocoa Farmers
Dry Harmattan wind mixed with parched weather across Ivory Coast's cocoa regions could hamper
development of the main crop. Farmers said they were concerned by the particularly strong Harmattan wind,
the dry West African trade wind which blows south from the Sahara desert to the Gulf of Guinea from
December to March, because the scale could determine the size of the main crop.
Ivorian farmers, who are currently harvesting the country's main cocoa crop for the 2011/2012 season, need a
lot of rainfall interspersed with sunny spells for the development of pods on trees and drying of the beans after
harvest. [Reuters 19/12/11]
Ivory Coast Starts Cocoa Forward Sales In January
Ivory Coast will from January 2012 start the forward selling of future cocoa crops a move by the government to
reverse a decade of liberalisation. External sales from the 2012/2013 season onwards will be handled by a
computer-driven auction system. Commercial operations will start in January 2012 according to regulator
CGFCC to market players mid December. Around 70-80 % of the season starting in October 2012 will be
auctioned at two daily sessions. The move is part of a return to a more tightly regulated sector in an effort to
guarantee Ivorian cocoa farmers a minimum 60% of the export price of their produce. First details of the reform
emerged in October. [Reuters 16/12/11]
Dry Weather Darkens Cocoa Outlook In West
Continued hot and dry weather in western Ivory Coast heightened worries among farmers that supply could
drop off starting early next year. Lack of rain in recent weeks in Soubre, Gagnoa and Duekoue was impeding
trees from producing new pods that would be harvested from January onward, leaving only larger pods for
prompt harvest. However conditions were favourable for drying main crop beans and quality is likely be good,
though there are concerns about supply in 2012 and worries about bushfires. The Harmattan winds that mark
the start of the dry season have already begun and are expected to end early. [Reuters 05/12/11]
Com-Watch Issue 8: January 2012
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Cocoa >>
GHANA
Cocobod Mandates Banks For 3-Year Finance Facility
Ghana Cocoa Board [Cocobod] has mandated 4-banks for a US$200 million 3-year pre-export financing. The
Bank of Tokyo-Mitsubishi UFJ, Ltd., Barclays Bank, Standard Bank Group and Sumitomo Mitsui Banking
Corporation, are acting as Initial Mandated Lead Arrangers [IMLAs] in a US$200 million Medium Term Trade
Finance Facility. The IMLAs are expected to sign the Facility before year-end.
The borrower is looking to diversify its financing options having raised a record US$2 billion for its annual
1-year trade finance facility in September. This represents the second time that Cocobod have approached the
market for medium term financing, having last tapped the market in 2007. This new Facility will again be
secured against cocoa receivables backed by fixed price offtake contracts.
Loan proceeds will be used to develop infrastructure within Ghana, including building of warehouses and
rehabilitation of cocoa farms. A limited syndication can be expected in the market and at this stage pricing for
the facility remains undisclosed. [Business Live 05/12/11]
COCOBOD Releases US$200 Million For Roads Construction
The Ghana Cocoa Board [COCOBOD] has released US$200 million to the Ministry of Roads and Highways,
under the Cocoa Roads Improvement Project [CRIP Tranche II], for the maintenance, rehabilitation and
upgrading of roads in cocoa growing communities in Ghana. Under the CRIP Tranche II, it was estimated that
routine maintenance would be carried out on 4,000 km, spot improvement on 2,000 km and upgrading of 750
km of feeder roads to bituminous surface.
Under CRIP Tranche I [2008-2010] contracts were awarded in
3-phases to undertake works involving 685 km of roads at a total
cost of GHC122 million. KfW, a German company, is also funding
a poverty- focused rural transport programme, to rehabilitate
300km of feeder roads to provide access to markets in Ashanti
and Brong Ahafo Regions. [GNA 22/12/11]
Ghanaian Cocoa Purchases Up 16% Year-On-Year
Cocoa purchases declared to Ghana's Cocobod reached
376,485 tonnes by Nov. 24 since the start of the season on
Oct. 14, up 16.2% over the corresponding 6-week period last
season. The figures compare with 323,936.2 tonnes of official
purchases recorded during the first 6-weeks of the previous season,
which ran from Oct. 1 to Nov. 11, according to Cocobod. [09/12/11]
Olam, Rainforest Alliance Launch US$1 Million Ghana Cocoa Project
Olam International Ltd. and certifying group Rainforest Alliance will invest US$1 million over 3-years to
produce sustainable cocoa in Ghana. The two organizations will invest in farmer training, aiming to double
yields of cocoa in 3-years. The money will also finance the planting of 100 ha of native trees. The project will
train people, help improve yields and raise awareness of the environment. Deforestation in Ghana has swelled
by an average 2.1% a year between 2000 and 2010.
The project will start with training of 2,000 farmers in 13 communities and will expand. Growers will be able to
certify their cocoa under the Rainforest Alliance scheme and benefit from the premium paid in the market for
such certification. Olam sold 18,280 tons of Rainforest Alliance-certified beans in their last financial year ended
June 30. Olam and Rainforest Alliance already have partnerships in Ivory Coast, Indonesia and Nigeria and
there are plans for another in Togo. [Bloomberg 06/12/11]
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Cocoa >>
NIGERIA
Main Cocoa Peak Harvest Under Way Amid Low Prices
The peak harvest period for the 2011-12 September-to-February main crop cocoa is under way in southwest
Nigeria though farmers are keeping back most of the cocoa from the market because of low prices. The peak
harvest period, when the bulk of the main crop is harvested, began late last month and will end in January.
Plenty of main cocoa is coming out of the bush now. However traders in Akure noted the majority of farmers in
the region are not selling their good-quality cocoa and hoarding the beans in protest against the current low
prices of the commodity.
Farmers are piling up good-quality cocoa in their stores vowing not to sell the cocoa until prices go up. The
Cocoa Farmers Association of Nigeria [CFAN] noted farmers are demanding N450,000 [US$2,866] for a ton for
ungraded cocoa. CFAN said farmers were facing high production costs and rising costs of living and have
rejected the NGN305,000-NGN310,000 which Licensed Buying Agents [LBAs] are offering.
We are supposed to see very active cocoa marketing from now until January/February, but this is not the case
because of the low prices of cocoa according to CFAN. The southwest cocoa belt accounts for 70% of
Nigeria's annual cocoa production of 240,000 tons. [Dow Jones 05/12/11]
Output In Nigeria's Cross River State Drops 50%
The 2011-12 main cocoa production for Nigeria's south-eastern Cross River state has fallen 50% because of
weather problems. The state is the second-largest cocoa producer in Nigeria after Ondo state in the southwest
and usually produces around 45- 50,000 mt of main cocoa a year when growing conditions are favourable.
Excess rainfall, excessive humidity, and heavy flooding on cocoa farms contributed largely to the poor cocoa
yield. [MENAFM 21/12/11]
Com-Watch Issue 8: January 2012
Page 11
Cocoa >>
UGANDA
Cocoa Exports Projected To Rise Next Year
Uganda is projecting a 12% jump in its cocoa exports in the 2011/2012 [Oct-Sep] season compared with the
last season, as newly planted trees start producing beans. According to the Tea/Cocoa Project within the
Ministry of Agriculture, production is expected to reach 18,000 MT up from last year’s 16,478 MT an
improvement that should push earnings to US$55 million from US$52.7 million realised this year. The rise in
production and exports will mainly depend on an increase in planted area. More farmers have been planting
cocoa trees and most of them are reaching maturation - a positive impact for future exports.
Uganda cocoa exports have grown from 6,000 metric tonnes in 2004/05 valued at US$8.7 million to 16,478
MT in 2010/11 worth US$52.72million. Earnings from cocoa bean exports have been sharply increasing due to
improved crop productivity and better global prices. Cocoa is one of Uganda’s major commodity exports and a
significant source of foreign exchange, although its production is still low compared to other African countries
that produce the crop.
Uganda is planning to expand the cocoa growing hectares and also provide farmers with the required
resources and technological knowledge in order to boost production levels from the current 16,478 MT to
50,000 MT targeted by 2016. Experts say Uganda is at an advantage over the other countries simply because
it is at a higher altitude of between 1,100-1,300m above sea level compared with West Africa with an altitude
of between 0-300m above sea level where humidity is high, attracting high infestations of diseases and pests.
[Daily Monitor 21/12/11]
GENERAL
Cocoa Demand To Rise 1-Million Tons
The world will require an additional 1 million MT of cocoa by 2020 to meet demand, according to Barry
Callebaut AG, the world’s largest maker of bulk chocolate. Prices have fallen 16% in London and 20% in New
York over the past month on speculation supplies will outpace demand for a second year. The surplus this
season will be 32,000 tons, London-based broker Marex Spectron Group Ltd. estimates. Production exceeded
consumption by 434,000 tons last season. [Bloomberg 06/12/11]
Cocoa Caps Longest Slump in 50 Years
Cocoa prices plunged, capping the longest slump in 50 years,
on signs that supplies are rising in Ivory Coast. Deliveries to
ports this season from farms in Ivory Coast climbed 5.8%
through Dec. 4.
Voters in Ivory Coast cast ballots on Dec. 11 in the first
legislative election in more than a decade that’s likely to shore
up support for President Ouattara, who’s pledged to overhaul
the cocoa industry to increase output.
Prices have dropped 45% since touching 32-year high in
March, when a civil war disrupted supplies following a disputed
Market Factors
> Increasing availability of cocoa from Western
Africa is still the dominant force in the market.
> Traders are also worried about the economic
situation in Europe.
> Global supplies will exceed demand for the
second straight year. The surplus last season
totalled 341,000 tons.
> The Standard & Poor’s GSCI Index of 24 raw
materials saw cocoa slump 32% in 2011, the
second-biggest decline among the commodities
tracked by the GSCI. [Cotton plunged 38% this
year.]
November election. The commodity dropped as global output rose and slowing economies in the U.S. and
Europe signaled supply may exceed demand for a second year. The slump may lower costs for companies
including Hershey Co., Nestle SA and Barry Callebaut AG, the world’s top bulk-chocolate maker.
[Bloomberg 09/12/11]
www.delmas.com Page 12

Cocoa >>
Olam Warns of Global Deficit
Leading cocoa trader Olam International warned of a tightening global market in 2012, with supplies moving
into deficit after this year's record surplus drove prices too low. Gerry Manley, the head of Olam's cocoa
division, expects world 2011/12 production to fall around 100,000 tonnes short of grindings. Other traders have
generally seen the market as balanced.
According to Manly the market was oversold due to
the size of the 2010/11 surplus and the expectation
of forward crop sales from Ivory Coast in the
wake of their planned cocoa sector reforms.
“Given the fundamental story, the outlook
for next year, and given some
uncertainty with the macro side of the
picture, particularly in Europe, we
think a price range of 1,600 to 1,700
pounds is a more realistic value.”
Commodities broker Marex
Spectron said a month ago that it
expected a supply surplus of
32,000 tonnes, while the
International Cocoa Organization
said in late September it expected a
balanced market. The ICCO hasn't
provided a more recent forecast.
Manley said the 2010/11 global surplus,
which Olam estimates at 500,000 tonnes,
has contributed to strong port arrival figures
in Ivory Coast, which is currently shipping its
2011/12 main crop.
Cocoa arrivals there reached 422,430 tonnes by Dec. 4, up from 400,043 tonnes in the same period a year
ago, according to data from Bourse du Cafe et Cacao [BCC]. Olam expects Ivory Coast's main crop to fall to
just over 1 million tonnes in 2011/12, down from 1.35 million tonnes the previous year, when ideal weather
boosted West African output.
Grindings growth, an indicator of demand, was forecast at 3% in 2011/12, mainly driven by emerging market
demand for cocoa powder. When a cocoa bean is processed it makes roughly equal parts butter and powder.
In recent years powder demand has outpaced butter demand due to most of the cocoa products consumed in
emerging markets being powder-based including chocolate-flavoured cakes and ice cream. The weaker
demand for butter has led to cheaper prices for what was once the premium cocoa product.
Part of Ivory Coast's cocoa sector reform plans include an intention to sell forward up to 80% of their crop.
Olam noted that at current price levels it would be surprising if the 2012/13 crop was sold forward. "We don't
see why they would like to commercialize the crop at levels that wouldn't give their farmers a good price in the
future." Manley said. [Thomson Reuters 12/12/11]
Com-Watch Issue 8: January 2012
Page 13
Cocoa >>
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 per tonne)
ICCO daily price
(US$ per tonne)
London futures (£
sterling/tonne)
NY futures (US$ per
tonne)
30-Dec-11 1397.29 2145.22 1397.00 2127.33
29-Dec-11 1380.35 2112.49 1382.00 2101.67
28-Dec-11 1397.14 2155.19 1406.67 2139.33
27-Dec-11 1443.19 2225.99 1415.50 2239.33
23-Dec-11 1446.27 2229.79 1424.33 2237.33
22-Dec-11 1453.92 2240.55 1432.00 2239.67
21-Dec-11 1461.80 2255.76 1451.67 2239.67
20-Dec-11 1433.27 2209.67 1417.33 2202.00
19-Dec-11 1366.47 2101.68 1361.00 2093.00
16-Dec-11 1387.75 2135.53 1386.67 2123.67
15-Dec-11 1416.51 2176.74 1414.33 2167.00
14-Dec-11 1438.92 2211.02 1440.33 2201.33
13-Dec-11 1478.52 2288.19 1490.33 2266.00
12-Dec-11 1426.55 2210.18 1434.67 2187.67
09-Dec-11 1347.65 2098.67 1353.67 2084.00
08-Dec-11 1387.17 2159.83 1385.67 2157.33
07-Dec-11 1402.52 2180.27 1400.00 2168.00
06-Dec-11 1414.30 2200.56 1422.67 2188.67
05-Dec-11 1437.21 2237.80 1437.00 2225.33
02-Dec-11 1443.74 2252.72 1451.67 2246.00
01-Dec-11 1477.76 2305.90 1476.67 2298.67
www.delmas.com Page 14

Coffee >>
ANGOLA
Robusta Coffee Production In Angola Rises By 42.8% In 2011
Angola produced 50,000 sacks of Robusta coffee in the 2011 coffee harvest representing 3,000 tons of coffee,
according to the International Coffee Organisation. Production in 2011 exceeded the 2010 harvest, which
totalled 35,000 sacks and represented a rise of 42.8%. Since 2006 coffee production has always exceeded
30,000 sacks, with the exception of 2009, when production fell to just 13,000 sacks.
The director of the National Coffee Institute noted Angola needed an investment of at least US$150 million in
coffee production, which would make it possible to produce 60,000 tons of coffee per year for export. Figures
show that in the period between October 2009 and October 2010, Angola was the 6th biggest exporter of
Robusta coffee in Africa after the Cote d’Ivoire, Guinea Conakry, Togo, Madagascar and CAR.
[Macauhub 28/12/11]
BURUNDI
Burundi Coffee Farmers to Withhold Crop, Seek Station Control
Burundi’s coffee growers threatened to stop selling produce unless they are granted a controlling stake in the
East African nation’s washing stations. The country started selling its coffee-washing and purification plants to
closely held companies in 2009, with Webcor Ltd., a Swiss company, buying 13 stations. Burundi in November
said it plans to sell the remaining 133 stations. According to the National Federation of Coffee-Growing
Associations of Burundi [CNAC] farmers should hold a controlling stake in the plants as they have paid a tax of
60 Burundian francs/kg [US$0.04] of coffee since the 1980s to pay for the construction of the stations.
Coffee output in Burundi, which grows mainly the arabica variety and relies on the crop to generate more than
half its foreign-currency earnings, may drop 13% to 21,000 metric tons this year amid declining plantings
according to the Burundi Coffee Regulatory Agency. Production is falling because of a lack of motivation
among farmers, who are replacing the beans with other crops. [Bloomberg 12/12/11]
Com-Watch Issue 8: January 2012
Page 15
Coffee >>
CAMEROON
Cameroon Coffee Production Falls 39%
Coffee production dropped in the 2010-11 season as some robusta-variety plants became dormant and illegal
trade in arabica rose. Output of both types dropped 39% in the harvest period to 34,417 metric tons, according
to data from the Cocoa and Coffee Board. Production of robusta declined to 31,840 tons in the season that
started in October 2010 and ended last month, from 53,000 tons a year earlier.
Coffee plants are in a resting period after previous years of increased production. Production may increase in
the next crop as the plants are fresh and have produced enough flowers this year. Arabica output slipped to
2,577 tons from 3,423 tons a year earlier. The arabica season runs from October to September. A lot of
arabica coffee is sold in neighbouring Nigeria. Production of both varieties of coffee is expected to rise to an
annual 125,000 tons by 2015. Processing of robusta dropped to 193 tons in 2010-11 from 316 tons a year
earlier, while arabica grindings declined 17% to 187 tons. [Bloomberg 09/12/11]
Cameroon Blames Coffee Export Drop On Arab Turmoil
Robusta coffee exports from Cameroon fell nearly 33% last season, the National Cocoa and Coffee Board
[NCCB] said, blaming the effects of turmoil in North Africa where much of the exports are consumed.
Uprisings toppled the governments Tunisia, Libya and Egypt, and protests raged in other North African
countries this year. Some 30,194 tonnes were shipped from the state during the December-to-November
2010-11 season, compared to 44,966 tonnes the previous year. Total robust production in the country was
31,840 tonnes, down from 53,299 tonnes last season. Output in 2011-12 is expected to shoot up according to
the NCCB. [Reuters 10/12/11]
Cameroon Exports 36 Tons Arabica Coffee In Opening 2011-2012 Season
Cameroon's first arabica coffee exports in the opening session of the 2011-2012 season was 36 metric tons,
against no exports of the crop in the same period of the just ended season according to the Cocoa and Coffee
Interprofessional Board, [CCIB].
The arabica coffee season in Cameroon runs from October through September. Statistics from the CCIB,
which still need to be certified by the country's government, showed that a total of 2,409 metric tons of arabica
coffee were exported in the previous 2010-2011 season, slightly down from the 2,986 tons exported during the
2009-2010 season. Arabica coffee output in Cameroon has been plummeting in the past few years as farmers
have diverted land to food crop production. [Dow Jones 05/12/11]
Cameroon Exported 29,027 Tons Robusta Coffee In Dec-Oct
Cameroon exported 29,027 tons of robusta coffee between
December and October, down from 42,752 tons of the crop it
exported during the first 11 months period of the previous season,
according to the Cocoa and Coffee Interprofessional Board
[CCIB].
The figures showed that just 594 tons of the crop was exported
in October of the current season alone, far below the 1,781 tons
shipped out of the country in the same month of the last season.
Officially, the robusta coffee season in Cameroon stretches
between December through November. The country exported
44,966 tons of robusta in the 2009-2010 season, up from 29,350
tons the year before. [Dow Jones 05/12/11]
www.delmas.com Page 16

Coffee >>
Cameroon Introduces Chemical Use & New Species To Fight Coffee Disease
Arabica coffee production in Cameroon is expected to be helped in the
2011-2012 season, thanks to the provision of chemicals by the government
to fight the coffee berry disease [CBD] according to the North-West
Cooperative Association [NWCA] Ltd. In Cameroon, arabica coffee is
grown only in the high plateau of West and North-West regions, with
the latter accounting for 80% of total output.
Production fell sharply in the 2010-2011 season to 2,577 tons,
down from 3,453 tons in the previous season mainly due to the
outbreak of the CBD. Many farmers are replacing traditional
varieties, mostly the Jamaica variety, with the Java variety which
is more vigorous and resistant to the disease.
The Kenya coffee hybrid “Ruiru 11” has also been planted over the
last 2-years which is resistant to both the CBD and coffee leaf rust.
These moves should raise regional output to 7-10,000 tons in 2011/12.
Cameroon plans to raise output to 125,000 tons in the next decade, of which
80,000 - 90,000 tons will be robusta coffee now grown in 8 of the 10 regions. [Xinhua 16/12/11]
COTE D’IVOIRE
October Robusta Coffee Exports Down 44% On Year
Ivory Coast exported 4,691 metric tons of robusta coffee in October, the first month of the 2011-12 season,
down by 3,736 tons, or 44%, on the 8,427 tons shipped in the preceding season. Ivory Coast produces about
2% of annual global coffee output and is Africa’s third largest coffee producer, after Ethiopia and Uganda.
The coffee marketing season runs from October-September and peaks in January-May, during the seasonal
lull in cocoa harvesting. Exports have been hit by the post-election crisis which saw some of the worst violence
in the coffee growing areas in the West, as well as general move by farmers away from coffee.
[Dow Jones 08/12/11]
Shipments of green robusta coffee beans per port. All figures are in metric tons.
Ports Oct 11 Oct 10
Abidjan 3,151 7,313
San Pedro 154 126
Beans total 3,305 7,439
Net weight of instant soluble coffee produced and shipped by Nestle SA’s Abidjan plant.
Period Oct 11 Oct 10
Products 533 380
The bean equivalent is the amount of beans it takes to produce one ton of soluble coffee. The sum of bean
exports and the bean equivalent gives the total exports.
Oct 11 Oct 10
Bean equivalent 1,386 988
Beans total 3,305 7,439
Total exports 4,691 8,427
Com-Watch Issue 8: January 2012
Page 17
Coffee >>
ETHIOPIA
New Ethiopian Coffee Directive Retracted
The Ethiopian Ministry of Trade has retracted the directive that required all coffee exports to be shipped in
container sized bags. The directive that established the new shipping system has been made null and void
according to Kebede Tchaine speaking to the Board of the Ethiopian Coffee Exporters Association [ECEA].
Tchaine had remained resistant when coffee exporters opposed the directive that imposed the new shipping
system.
Associations representing major importers from Germany and Switzerland wrote letters of complaint against
the new bulk container shipping to their Embassies in Ethiopia, the Ministry of Trade and the Ministry of
Foreign Affairs. A meeting of the Ethiopian Coffee Exporters Association concluded that the shipping system
was untenable and requested appropriate revisions from the authorities. [The Reporter 19/12/11]
Price Drops On Increased Supply
During Week 50 prices of unwashed arabica coffee fell by 6.9% on the Ethiopian Commodity Exchange. The
fall occurred as the volume of washed and unwashed coffee traded on the exchange increased from 2,295 MT
to 2,529 MT in 2010-11. Ethiopia is the 6th largest coffee producer and its exports have also increased which
experts say is due to the introduction in 2008 of a commodity exchange market, which promoted transparent
trading, and rising global commodity prices.
Coffee exports from Ethiopia rose by 38% in the fiscal year to 7 July 2011 as shipments of the beans jumped.
The total amount of coffee exported over the period reached US$2.8 billion. Coffee was Ethiopia's biggest
source of revenue raising US$841.7 from 196,118 tonnes of beans shipped. Last year, the country exported
172,210 tons for US$528.2 million. The increase was driven by a 40% rise in global coffee prices in the period.
[Bloomberg 13/12/11]
www.delmas.com Page 18

Coffee >>
KENYA
Kenyan Coffee Prices Climb 21%
Kenya’s coffee prices climbed 21% at the 07/12 auction as buyers replenished their stocks before the year-end
holidays. The average price for all the coffee sold rose to US$340.95 for a 50-kg bag from US$280.70 2-weeks
ago. The average price for the benchmark AA grade fell 3% to US$446.14 a bag from US$459.99 at the
previous sale after supplies rose 89% to 2,623 bags.
The top grade sold for as much as US$480 a bag compared to US$537 at the previous sale. The last auction
this year will be held on Dec. 14 and sales will reopen on Jan. 10. Sales at the auction climbed 84% to 9,732
bags worth US$4.1 million from 5,299 bags valued at US$1.8 million at the previous auction. Supplies rose
56% to 16,610 bags from 10,616 bags at the previous auction. Kenya harvests the bulk of its crop from
October through December, while a secondary crop is reaped from April to June. [Bloomberg 07/12/11]
Auction in US$/50-kg bag
Grade Low High Average
AA 391 480 446.14
AB 260 445 385.61
C 242 342 287.75
E 355 361 358.82
MH 187 208 198.14
ML 90 174 134.52
PB 346 442 385.44
SB 85 85 85.00
T 111 264 201.68
TT 258 355 332.54
UG 262 322 275.18
UG1 198 267 251.17
UG2 120 255 191.96
UG3 76 163 115.55
TANZANIA
Tanzania Arabica Coffee Poor Take Up
Tanzania's arabica coffee prices fell at auction during Week 51, with just over half of the coffee on offer sold
after growers rejected low bids from exporters. State-run Tanzania Coffee Board [TCB] said 23,615 60-kg
bags were offered at the sale and 12,765 bags sold. That compares with figures at the previous action of
21,359 bags for sale and 20,615 sold. Overall average prices at the Moshi exchange were down by
US$24.75/50 kg for mild arabica compared to the last auction. No robusta coffee was sold at the auction due to
limited supply.
The terminal market in New York was last week dropping daily. It was very significantly down on the previous
week, so many of the producers were disappointed with the prices offered and they were not ready to sell. TCB
said coffee prices in New York were down last week by US$12.80/50 kg, while London prices fell by
US$5.50/50 kg. Benchmark grade AA sold at US$242-316 per bag, compared with US$205-329 per bag
previously. The average price was US$260.67 per bag, down from US$289.70.
The average price for Grade A fell to $261.42 from $283.27 previously. The newly introduced grade AB got an
average price of US$262.33, down from US$284.89. [Reuters 20/12/11]
Com-Watch Issue 8: January 2012
Page 19
Coffee >>
Tanzania Coffee Prices Rise, Eyes On Euro Zone
Tanzania's coffee prices rose at auction during Week 50 buoyed by strong export demand according to the
Tanzania Coffee Board [TCB], and traders expect further increases in the coming weeks despite euro zone
fears. State-run TCB said 21,359 60-kg bags were offered at the sale with 20,615 bags sold. A total of 29,333
bags were up for sale in the previous auction, with 23,097 bags sold. Overall average prices at the Moshi
exchange were up by US$3.41 per 50 kg for mild arabica and up by US$9.95 per 50 kg for robusta compared
to the last auction.
Tanzania mainly produces arabica coffee and grows some robusta. Prices of its arabica normally track the
New York market while those for robusta take their cue from London. There is a supply shortage in the world
market so demand for coffee will remain stable. This should push prices further up in January and beyond.
Market participants said they expect coffee prices to remain firm due to strong demand for the commodity on
the world market. Europe is a key market, accounting for about half of the coffee exported from Tanzania.
When the euro zone is in crisis, demand for coffee also suffers.
TCB said coffee prices in New York were up by US$9.04/50 kg, while London prices rose by US$3/50 kg. TCB
forecasts the 2011/12 [June/April] crop will fall to 45,000 tonnes from 56,247 tonnes in the previous season.
[Reuters 13/12/11]
Tanzania’s Top Coffee Grade Falls 5.8% on Increased Supply
Tanzania’s benchmark coffee grade fell 5.8% at a sale on Dec. 1 as supplies increased and global prices
declined, the Tanzania Coffee Board said. The highest price paid for the arabica AA grade dropped to US$316
per 50-kg bag from US$321 a week earlier. The average price for the grade fell 0.9% to US$284.37 as
supplies more than doubled to 8,385 bags. Total supplies at the auction rose 30% to 28,611 bags while sales
climbed 21% to 22,290 bags. Arabica accounts for 75% of Tanzania’s output with robusta making up the rest.
[Bloomberg 05/12/11]
The following are details of the Dec. 15 auction in U.S. dollars for a 50-kg bag:
Grade Offer Sold High Low Average
Arabica AA 7,160 3,780 316 242 260.67
Arabica A 4,601 2,184 265 253 261.42
Arabica AB 4,337 2,399 275.60 262.33 269
Arabica B 2,941 1,608 267 230 255.42
Arabica PB 2,499 1,544 282 229 255.31
Arabica C 2,077 1,250 243 201 223.64
www.delmas.com Page 20

Coffee >>
UGANDA
Coffee Development Authority’s Robusta Prices
The Uganda Coffee Development Authority [UCDA] gave indicative prices for robusta exports, which make up
85% of the country’s bean shipments. Uganda is Africa’s second-largest coffee producer, after Ethiopia, and
the continent’s biggest robusta grower. Nearby refers to deliveries to be made within 45 days and forward
delivery is between 45 and 90 days. Prices are basis free on rail or truck from Kampala, in U.S. cents a pound.
Grade Nearby Price Forward Price
Bugisu AA 212.85 212.85
Bugisu A 211.85 211.85
Bugisu PB 211.85 211.85
Bugisu B 209.85 209.85
Wugar 210.85 210.85
Drugar 194.85 194.85
A week ago, UCDA quoted arabica prices as below:
Grade Nearby Price Forward Price
Bugisu AA 205.30 204.30
Bugisu A 204.30 204.30
Bugisu PB 204.30 204.30
Bugisu B 202.30 202.30
Wugar 203.30 203.30
Drugar 187.30 187.30
[Bloomberg 28/12/11]
Coffee Exports May Fall by 9.6% in December on Rains
Coffee exports from Uganda may fall 9.6% in December as wet weather hinders the harvesting and drying of
the beans. December shipments may decline to 215,000 60-kg bags from 237,747 bags a year earlier
according to the Uganda Coffee Development Authority [UCDA]. The forecast is 5.4% less than the 227,177
bags shipped in November. On-going rains have delayed the harvesting and drying processes in most areas
which has put pressure on the quality of the coffee.
Shipments from Uganda may rise to 3.3 million bags in the 12 months through September 2012 from 3.15
million bags a year earlier because of a bigger crop. Uganda plans to increase production to 4.5 million bags
by 2015 through a replanting program. The nation consumes around 3% of its annual coffee crop and the rest
is exported, according to the Eastern African Fine Coffee Association. [Bloomberg 19/12/11]
Uganda’s Coffee Exports Decline 15% In November
Coffee exports from Uganda fell 15% in November according to the nation’s Coffee Development Authority
[UCDA]. Shipments declined to 227,177 60-kg bags from 266,726 bags a year earlier. Exports for the first
2-months of the season dropped 2.7% to 442,462 bags using UCDA data.
Uganda ranks behind Ethiopia as Africa’s biggest producer of the crop. Robusta beans account for about 85%
of the nation’s annual production. Exports in 2010-11 were worth US$448.89 million. Exports in 2010-11 were
US$448.89 million from 3.15 million bags, compared with US$267.13 million from 2.67 million bags.
[Bloomberg 06/12/11]
Com-Watch Issue 8: January 2012
Page 21
Coffee >>
GENERAL
World Coffee Production to Decline This Season
Global coffee production will drop to 133.8 million bags in the year that started Oct. 1 according to the U.S.
Department of Agriculture [USDA]. The forecast is down from output of 136.38 million bags a year earlier and
a June estimate of 135.05 million. A bag weighs 60kg. The lowered projection means that demand would
exceed production. The agency forecasts consumption at 133.86 million bags, little changed from 133.96
million estimated in June. Ending stocks would be 23.98 million bags, the lowest since the 2000-2001 season.
[Bloomberg 16/12/11]
Higher Robusta Crop May Cap Coffee Prices
Record Robusta harvests in Vietnam and Brazil, along with a big jump in Indonesia’s coffee output will boost
supplies of coffee at a time when demand is under threat from slowing economic growth. The effect on coffee
prices has been visible in 2011, which saw a roller coaster ride. Currently, coffee prices are down to their
December 2010 levels. The average ICO composite price of coffee in December, a price indicator maintained
by the International Coffee Organization [ICO], is down 17% from its 2011 high levels. December alone has
seen the daily price fall 8% to date. That adds credence to the belief that coffee prices are on a weak footing.
The US Department of Agriculture [USDA] has released its revised world coffee consumption and production
estimates. USDA has scaled down its estimates of global coffee production in crop year 2011-12, to 133.8
million bags [60kg], or down by about 1% from its earlier estimates reported in June. Compared with 2010-11,
coffee production is expected to be down by 2%. USDA lowered its estimates after a shortfall in Columbia due
to rains. Arabica production is down 7% while Robusta production is estimated to rise 6.6%.
[Wall Street Journal/Mint 18/12/11]
Coee prices have fallen o their 2011 highs.
Average monthly price, in cents per pound (till 15 Dec 2011)
350
300
250
200
150
100
50
142.3
82.7
108.4
Colombian mild Arabicas
ICO composite price
Robusta
253.0
192.1
100.6
Ja Jul
Ja Jul Ja Jul De
2009 2010 2011
Source: International Coee Organization
www.delmas.com Page 22

Cotton, Textiles & Leather >>
China To Support C4 Countries On Cotton Production
China and the group of 4-major African cotton producing countries [C4] announced a joint program in Geneva
aimed at supporting C4's cotton production through technical and financial assistance over the next few years.
The program, which came ahead of the 8th Ministerial Conference of the World Trade Organization [WTO],
was jointly announced by the Chinese Commerce Minister Chen Deming and trade ministers or
representatives from C4 countries: Benin, Burkina Faso, Chad and Mali. C4 countries accounts for 15% of the
world's cotton exports.
Cooperation between the two sides will include technology transfer, technical assistance in areas of research,
provision of seeds, agricultural machinery, fertilizers and pesticides, funding of training projects, as well as
exchanges of experience.
Despite China itself being a big cotton-growing country producing more than 7 million tons of cotton per year,
China barely exports any cotton, but imports from international markets. The new program represents action in
"aid for trade" and is a step forward in promoting development as stipulated by the Doha Development Agenda.
However huge subsidies on cotton production, most of which come from developed countries, have
undermined the competitiveness of African cottons. C4 countries have engaged in a battle in WTO to restore
competitiveness of African cotton. [Xinhua 14/12/11]
US Pledges US$16 Million in Aid to Africa’s C-4
At a time when U.S. domestic cotton subsidies are at an all-time low, the federal government has decided to
move forward with several initiatives to help the four leading African cotton-producing countries [Benin, Burkina
Faso, Chad and Mali, otherwise known as the C-4] engage in global trade.
As the 8th Ministerial Conference of the World Trade Organization geared up in Geneva, U.S. representatives
resolved cotton- trade issues with the world’s Least Developed Countries [LCD’s] by extending duty-free,
quota-free access for upland cotton and pledging to drum up legislative support for a new cotton assistance
program when USAID’s West African Cotton Improvement Program [WACIP] expires in April.
The proposed new program, which will require Congressional action before it’s enacted, will provide up to
US$16 million over 4-years [subject to the outcome of the budget process] to improve the capacity and
efficiency of the cotton sector in West Africa by “leveraging private-sector cotton initiatives, catalyzing
increased commercial investment for cash crops, particularly cotton, and strengthening extension services to
increase the adoption of improved techniques and technology and expand market linkages.
The existing WACIP has been criticized for shutting out other African countries struggling to enter the global
market. Detractors have also accused U.S. trade representatives of slapping a band-aid on a much larger
problem: domestically subsidized cotton, which has long driven down global market prices and made it virtually
impossible for other nations to compete.
This year’s edition of the “Doha Round,” which originally began in 2001, covered issues such as the creation of
a framework to facilitate membership of the LDCs to the WTO, longer protection of intellectual property rights
for the LDCs, and establishing preferential rules for services offered by the LDCs. Once again, no agreement
was reached. [USAID 21/12/11]
Web References
The Doha Round: http://www.wto.org/english/tratop_e/dda_e/dda_e.htm
8th WTO Ministerial Conference: http://www.wto.org/english/thewto_e/minist_e/min11_e/min11_e.htm
USAID WACIP Cotton Program: www.wacip.org
Com-Watch Issue 8: January 2012
Page 23
Cotton, Textiles & Leather >>
Association of African Cotton Producers Hold AGM
The Association of African Cotton Producers [AProCA] on 06/12/11 held its Annual General Meeting in Banjul,
Gambia. The meeting is the 6th of its kind after 2006 in Bamako, Cotonou in 2007, Yamoussoukro in 2008,
Lome in 2009 and Ouagadougou in 2010. Cotton is an important primary economic base for many African
countries. Farmers continue to face tremendous challenges from the lack of finances, limited market outlets,
limited extension services, effects of climate change, poor governance structures of farmers association, post
harvest losses, unaffordable inputs, land issues, and inadequate water supply. [Foroyaa 09/12/11]
FACTBOX: AProCa
> AProCa is an African organisation of cotton producers which brings together cotton producers in West,
Central and East Africa.
> Created in Cotonou in December 2004 during meetings of representatives of cotton producer’s of
Benin, Burkina Faso, Cameroon, Mali, Senegal and Togo.
> AProCA has 15 member countries which are Benin, Burkina Faso, CAR, Cameroon, and Cote d’lvoire,
Gambia, Ghana, Guinea Bissau, Mali Uganda, Senegal, Chad, Togo and Zambia.
Cotton Forecast Cut as Global Outlook Sours
Global cotton demand will be 2.6% less than forecast last month on diminished prospects for economic growth
and increased market share for polyester, according to the U.S. Department of Agriculture. The world will use
111.34 million bales in the year ending July 31, compared with 114.27 million projected in November. Demand
will drop for a second straight year, sending stockpiles to 57.67 million, up from 54.96 million projected a
month ago and the highest since 2009.
Prices have plunged as much as 60% since reaching a record in March as the economy slowed and farmers
boosted output to the highest ever. The USDA said its forecast reflects “continued weak mill demand owing to
an uncertain world economic outlook” and a shift by clothing makers to more polyester after cotton prices
surged earlier this year.
Global production will be 123.42 million bales, down from 123.89 million forecast in November, mostly
because a drought reduced production in the U.S. Output still will be a record, up 7.1% from a year earlier. The
government’s forecast of U.S. demand was reduced by 200,000 bales, or 5.3%, to 3.6 million bales, reflecting
a slowdown in recent months. [Bloomberg 09/12/11]
www.delmas.com Page 24

Cotton, Textiles & Leather >>
Cameroon Raises Cotton Price To Curb Smuggling
Cameroon state firm SODECOTTON has increased farm gate raw cotton price by 27.5% for the current
harvest in an effort to dissuade farmers from smuggling their produce to neighbouring Nigeria. SODECOTTON
said it will pay farmers 255 CFA/kg of cotton this season from 200 CFA/kg in the previous season.
About 16% of Cameroon's total output of 161,000 tonnes in the 2010/2011 season was smuggled into Nigeria
where farmers were paid almost twice what they get in Cameroon. SODECOTTON estimated a loss of 24
billion CFA during the year. SODECOTTON pre-finances purchases by providing farmers with seedlings,
fertilisers and other materials on the agreement that they sell their cotton to them. But the farmers did not
respect the terms of the deal, preferring to illegally export to Nigeria.
Official data from the firm shows that Cameroon's raw cotton production rose 47% to 161,800 tonnes during
the 2010-11 season with plans to increase output to between 185,000-200,000 tonnes in 2011/12 following the
introduction of new high-yield plants. SODECOTTON plans to raise its pre-financing fund from 33.8 billion CFA
from 24 billion CFA during the 2011/12 season to boost production. [Reuters 29/12/11]
Malawi’s 2012 Cotton Output to Rise More Than Threefold
Malawi’s cotton production for the 2012 season could rise more than threefold as a result of government
subsidies this year, according to the Great Lakes Cotton Co one of the country’s biggest cotton buyers. Malawi
is expected to produce 200,000 metric tons of lint in the season to July 2012, compared with 55,000 tons last
year. The amount of land with cotton has doubled from last year to 400,000 ha.
Malawi provided 1.6 billion kwacha [US$9.7 million] in subsidies for cotton farmers. President Bingu wa
Mutharika told parliament in June that the government would promote the crop and wanted cotton to become
the country’s main foreign exchange earner. Cotton is Malawi’s 4th-largest cash crop after tobacco, tea and
sugar. The cotton price at the end of the selling season this year was 190 kwacha/kg, more than double the
government-set price of 75 kwacha/kg. [Bloomberg 14/12/11]
Com-Watch Issue 8: January 2012
Page 25
Fish >>
Unsuccessful EU Negotiations To Renew Agreement With Mauritania
The European Union [EU] and the Mauritanian government failed to reach an agreement to renew a
bilateral fishing pact. After 3-days of negotiations the 2-parties could not agree on the compensation to
be paid to Mauritania. The current fisheries agreement expires in June 2012. The European offer is well
below Mauritania’s expectations. The agreement allows 110 vessels, most of which are from Spain, to
fish in Mauritanian waters.
This setback takes place a day after the Government of Morocco ordered the exit of Community vessels
from its fishery, following the decision of the EU Parliament to reject the extension of the bilateral fishing
agreement. It had been agreed that European vessels should hire 60% of Mauritanian seamen and that
such vessels would fish up to 20 miles out to sea [instead of 13 miles as it has been so far now] and 8
miles over the sea for those ships capturing crustaceans [instead of 6 miles]. [European Union 16/12/11]
www.delmas.com Page 26

Foodstuffs >>
Maputo Port Citrus Operations & Logistics Cost Assessment 2011
The Citrus Growers Association of Southern Africa has undertaken a study of the logistics and costs involved in
transporting fruits across the region. Their findings concluded that geographically Maputo port is well placed to
offer the more efficient transport and better logistics costs compared to Durban port.
However, due to shipping constraints from Maputo and competitive container sea freight rates offered from
Durban, advantages are achieved by shipping citrus from the Durban port rather than Maputo. Direct container
shipping from Maputo to key markets is not presently available [only transhipment from Durban or Far East
ports] and is not thought to be offered in the short to medium term.
Although it costs less to transport citrus to Maputo, by road and by rail, the difference in container sea freight
rates ex Durban offers a better logistics cost and therefore citrus is transported on average an extra 450km to
the Durban port.
The most viable option to export citrus from Maputo is to utilize the break-bulk service to Europe, Med and
Russia and to ship containers to Far East and Middle East transhipped via Durban or Far East ports. The fact
that most citrus produced from the northern area is exported to Europe & UK from Durban by containers, this
draws most of the production to Durban rather than to Maputo.
Production Region KM to Maputo KM to Durban KM Difference Ave. Cost of Truck
Northern Limpopo -LP
Letsitele / Tzaneen -LP
Hoedspruit -LP
Marble Hall / Groblersdal -MP
Nelspruit -MP
Malelane -MP
North Swaziland -SZ
South Swaziland -SZ
Difference
Maputo Durban MPT vs DBN
665 1 150 -485 R 21272 R 23015 -R 1742.40
440 900 -460 R 14540 R 18134 -R 3594.00
350 830 -480 R 11974 R 17110 -R 5135.28
475 700 -225 R 16366 R 12864 R 3502.32
200 700 -500 R 7698 R 13278 -R 5580.48
140 610 -470 R 5526 R 12385 -R 6859.20
220 620 -400 R 7298 R 13703 -R 6404.88
185 450 -265 R 6300 R 10043 -R 3742.80
Over the last decade citrus export production from the northern region has almost doubled which means the
volume of export citrus routed through Durban has almost doubled over the same period. The result of this is
the Durban port becomes severely congested and cold store infrastructure is oversubscribed during peak
season. Over the same period the volume of citrus exported by containers vs. break-bulk conventional
shipping has grown to represent 70% of the total export volume.
In the near future if the break-bulk conventional shipping mode is not revitalized, almost all citrus will be
shipped by containers and container shipping capacity and equipment may not be able to service the industries
demands. Therefore the Maputo port could provide a means of reducing logistics costs, decrease the amount
of citrus routed through Durban to increase efficiency, and rejuvenate and create a viable and sustainable
break-bulk conventional shipping mode from South Africa.
Com-Watch Issue 8: January 2012
View the full report at:
http://www.cga.co.za/site/files/5438/CGA%20-%20Maputo%20Port%20Citrus%20
Operations%20and%20Logistics%20Cost%20Assessment%202011.pdf
Page 27
Foodstuffs >>
South Africa’s Transnet Looks To Bolster Grain Facility
Transnet Port Terminals [TPT] is in talks with the agricultural sector and Department of Agriculture to raise an
additional R250 million through public private partnership [PPP] needed to bolster a grain facility in East
London. Transnet transports maize and wheat to various Southern African countries. [IOL 13/12/11]
FG Plans Two Rice Mills In Niger
According to the Minister of Agriculture Two rice mills are to be built in Badeggi and Wushishi in Niger, under a
public private partnership [PPP] arrangement. The old rice mill in Badeggi will also be rehabilitated - a move by
the government toward boosting rice production. The ministry will construct an Agro-Industrial Estate in Minna
in conjunction with the state government to process 6,200 tonnes of rice per annum.
A market will be constructed in Bida to warehouse fresh produce and market on favourable conditions to
consumers. One-stop shops and agricultural input centres will be constructed in Bida, Wushishi, Salka and
Mokwa towns in 2012. [Next 20/12/11]
Feronia Completes Largest Single Rice Planting In Congo
Feronia announced its arable farming division has finished planting 1,200 ha of rice in DRC, the largest single
rice planting in the country. The company holds a 10,000-ha concession in the Bas-Congo province of the
DRC, located about 200km from Kinshasa.
Feronia said it cleared 2,000 ha of land to plant 2-varieties of rice - NERICA-4 and NERICA-7 - on 1,200 ha.
Feronia expects to harvest and process the rice in February 2012. After that, it will replant the land with edible
beans, which will be harvested in May 2012. Feronia's focus is on its arable farming operations and oil palm
operations in DRC. [Proactive Investors 29/11/11]
www.delmas.com Page 28

Palm Oil >>
Cussons Invest US$612 Million In Nigerian Palm Oil Refinery
PZ Cussons’s US$56 million palm oil refinery in partnership with Singapore’s Wilmar International will be
operational by Q3 of 2012. The joint venture company
PZ Wilmar will invest N100 billion [US$612 million]
in Nigeria over the next 5-7 years to develop
oil palm plantations that will feed the
refinery and reduce import bills. Nigeria
currently imports around 300-400,000
tonnes of oil palm a year.
[Business Day 27/12/11]
Palm Oil Trade Fair In Africa
The Malaysia-Africa Palm Oil
Trade Fair and Seminar 2011
[POTS] was held under the
theme if "Seizing New
Opportunities". Split over
2-countries POTS South
Africa in Johannesburg
attracted some 200
participants and POTS
Nigeria in Lagos attracted
over 250 participants.
Palm oil exports are on the rise in
both countries with the value of
exports to Nigeria surged from US$55
million last year to well over US$410
million up to September this year, while
exports to South Africa this year should exceed
the 150,000 tonnes recorded last year.
Nigeria, although a producer of palm oil, still imports substantial quantities to meet the need of its population of
around 160 million. The Bakrie Group of Indonesia recently announced a plan to invest US$1 billion in mining
as well as oil palm and rubber plantations in Nigeria. [Bernama 12/12/11]
European Industry Proposes Zero-Duty On Sustainable Palm Oil
Palm oil-based industries in the European Union [EU] are seeking to promote the removal of import duties on
sustainable palm oil to encourage production in producing countries. A proposal has been issued to the
governments of EU member states for approval. [Jakarta Post 05/12/11]
Ghana Benso Oil Palm Makes Profit
The Benso Oil Palm Plantation Limited [BOPP] under its new management, WILMAR, a Singaporarian
Company made a profit of GH¢8.3 million after tax this year, as against a profit margin of GH¢1.9 million in
2010.
The company produced 14,270 tonnes of palm oil between Jan to Nov this year, recording a 30% increase
over the previous year’s 10,966 tonnes. Palm kernel followed with actual production of 2,572 tonnes this year
as against 2,271 tonnes the previous year. [Ghana News Agency 12/12/11]
Com-Watch Issue 8: January 2012
Page 29
Rubber >>
GMG Unit Signs S$535 Million Cameroon Rubber Deal
A unit of Singapore-listed GMG Global has struck a US$410 million deal with Cameroon's
government to develop 45,200 ha of palm oil and rubber plantations. Sud Cameroun Hevea,
80% owned by GMG, said the plantations in Cameroon's South region should become fully
operational within 4-years, with production aimed at the export market. Rubber and palm oil
are significant export crops from Cameroon with annual production estimated at 60,000 tonnes
and 175,000 tonnes, respectively. [Today Online 14/12/11]
www.delmas.com Page 30

Shea Nut >>
Steering Committee On Sheanut Inaugurated In Ghana
A 15-member steering committee on Sheanut has been inaugurated in Tamale in the Northern region of
Ghana. The Committee chaired by the Deputy Chief Executive of the Ghana Cocoa Board, Dr Yaw
Adu-Ampomah, is mandated to see to the sustenance and regulation of the shea industry in Ghana. Activities
will be financed by the Ministry of Finance and the Ghana Cocoa Board, which is the regulatory body of the
Shea sector. Ghana earns US$18 million per annum from shea exports and this could be improved if quality
control measures are applied to the sector. [Ghana Broadcasting Corporation 10/12/11]
Government To Establish Sheanut Factories In Ghana
Vice President John Dramani Mahama announced that the Government will establish 3-shea nut processing
factories to make use of the abundant raw material. The construction of a facility in Buipe, Northern Region, will
be completed by Feb. 7 2012, while another two will be located in vantage areas of the Upper East and Upper
West Regions. The Government has signed an agreement with a Brazilian Company that would buy all the
produce of the sheanut factories. [GNA 13/12/11]
Com-Watch Issue 8: January 2012
Page 31
Sugar >>
Sugar Investor Seeks 20,000 Hectares In Rwanda
Algeria's biggest sugar producer Civital Group has tasked the Rwandan Government to provide 20,000 ha of
land to grow sugarcane as a pre-condition to set up a sugar milling plant in Rwanda with the capacity to
produce 200 MT annually.
The plant is only a portion of about US$250m the group has earmarked to invest in Rwanda in
agro-processing focusing mainly on sugar production, tea processing as well as grains and cereals processing
for both internal and external markets.
Rwanda has one sugar processing plant - Kabuye Sugar Works [KSW], which produces 30% of the local
market demand and the remaining portion, is imported from Uganda, Tanzania and other countries. Due to
drought that hit sugar plantations in East African countries such as Uganda and Tanzania reducing production
beginning August this year, Rwanda has not been able to import enough sugar to satisfy the local demand.
This has pushed prices up and the highest was Rf1300/kg.
Meanwhile, the EAC countries, which tax 100% sugar imports from outside the bloc, late this year approved
Rwanda and Uganda's request to import 50,000 tons of sugar and 40,000 tons each tax free to avert the sugar
crisis and bring down the prices. Sugar price has now gone down in Rwanda to Rf1000/kg.
However, importing sugar does not solve the issue of insufficient production locally. It also worsens the
balance of trade, which continues to widen due to high imports and low exports. For Rwanda to be able to
avert future sugar crisis, it is required to have sufficient sugar production but land remains a major factor
hindering this objective.
The current sugar miller in the country, KSW, the former state owned factory that was sold to Madhivani Group
through privatisation in 1998, produces around 10,500 tons each year, which represents 30% of the total
demand. Low production is a result of small and poor land for sugarcane production. When it acquired the
factory in 1998, KSW signed a 50-year lease contract with the Government for 3,158 ha of land but only 2,160
ha are suitable for sugarcane production while the rest is prone to flooding.
The company had promised to meet 80% of the local sugar demand but it never lived to the promise due to
land issues. With repeated appeals to the government to get more land, KSW failed to attract government
attention and so it couldn't get land to increase its sugarcane production to have sufficient raw material for
sugar production. [EA Business Week 20/12/11]
Sudan Opens Processing Plant
White Nile Sugar Co. plans to open a processing plant in Sudan in December, helping to meet domestic
demand for sweeteners. White Nile will start with initial capacity of 150,000 MT and grow to 450,000 MT in
2-years, covering 40% of domestic demand, the company. The company is 30% owned by Kenana Sugar Co.,
Sudan’s largest producer of white, or refined, sugar. Sudan is Africa’s third-biggest sugar producer after South
Africa and Egypt. [Bloomberg 15/12/11]
Ethiopia to Construct Sugar Factories
In its bid to become a major sugar exporter, Ethiopia is constructing 10 sugar factories following the injection
of a US$4.6 billion investment. The government run Ethiopian Sugar Corporation will construct the factories in
Beles, central Amhara region, Wolkait northern Tigray area, Kesem north eastern Afar regional state and
South Omo Zone of the Southern Nations Nationalities and Peoples' region. [Mena 21/12/11]
Cargill Replaces Head Of Sugar
Cargill has replaced the head of its sugar business. Jonathan Drake has left the group. [FT 07/12/11]
www.delmas.com Page 32

Tea >>
BURUNDI
Burundi Tea Export Earnings Jump In Nov
Burundi's tea export earnings jumped 60% year-on-year in November, driven up by high volumes and a
stronger regional market. The country's state-run tea board [OTB] said US$1.41 million was collected from the
export of 560,353 kg, up from US$878,877 earned in the same period in 2010 from the sale of 357,745 kg.
Jan-Nov total revenues reached US$21.2 million, surpassing total earnings from tea in 2010 of US$18.8
million. Burundi sells 80% of its tea through a weekly auction held in the Kenyan port city of Mombasa. The
average 2011 price per kg climbed to US$2.53 up from US$2.46 in 2010. [Reuters 28/12/11]
Burundi Oct Tea Export Earnings Up 29%
Burundi's tea export revenues rose 29% in October from the same month last year on high volumes. Burundi
collected US$1.21 million from the export of 479,808 kg. It earned US$940,605 in October 2010 from 369,095
kg. Tea production in October this year was better due to good rains, and this has had a positive impact on
earnings.
The average price per kilogram fell slightly to US$2.54 from US$2.55 last October. Earnings in the
January-October period have reached US$19.8 million, far ahead from the early projection of US$13.4 million
for the year. The tea board estimates 2011 output at 9,000 tonnes, up from 8,016 tonnes in the previous crop,
thanks to good rains and an increased use of fertilisers in tea farms. [Reuters 06/12/11]
Com-Watch Issue 8: January 2012
Page 33
Tea >>
KENYA
Mombasa Tea Auction Faces Crash
Direct sale of tea to international buyers has plucked off 30% of the total export volume, sparking fears that it
will undermine pricing at the East and Central Africa tea auction based in
Mombasa. Traditionally, only 20% of tea exports are bought directly
from farmers, as buyers seek top-ups for blending varieties from the
auction.
The East Africa Tea Trade Association has noted increased
direct transactions have reduced the number of buyers at the
auction, leading to lower traded volumes. Often only half of the
70 registered exporters are active at the auction while about
18% of tea remained unsold on a weekly basis despite reduced
offers following the withdrawal of Tanzania and Malawi
producers mainly due to East African Community tariffs.
Stringent requirements for buyers and brokers are pushing them to
look for deals outside the auction. Besides being asked to deposit
Sh10 million, set up warehouses and pay taxes, buyers’ licences have to
be renewed annually. If the number of buyers continues to fall at the auction,
the reduced competition will lead to a price crash.
There are 11 tea auctions centres in the world but Mombasa, Colombo in Sri Lanka and Calcutta in India are
the market movers, handling half of the tea sold through auction. Although direct tea sales are pegged on
auction prices, farmers are attracted to individual contracts because the cost of storage, transport costs and
brokers’ fee is borne by the buyer. A ceiling should be put on direct sales to protect the auction which handles
trades valued at KSh12 billion every week.
Dubai Tea Trade Centre [DTTC] has been increasing its activity in the African tea market, after various players
like Unilever, James Finlay and Kenya Tea Trade Agency [KTDA] signed a trade pact with it. KTDA, the
marketing agent for about 500,000 small scale farmers said it still supported the Mombasa auction but the
interests of growers affiliated to it come first. [The Citizen 13/12/11]
Week 51: Kenya Top Grade Tea Prices Hold Steady
The average price for top grade Kenyan tea held steady at an average US$2.88 per kg during week 51, while
the amount offered edged up. The Africa Tea Brokers [ATB] said 143,332 packages were offered for sale with
12.1% of it left unsold. Best BP1s TEABP1-BEST-KE fetched $3.46-2.30 per kg compared with $3.40-$2.35
per kg previously. Best Pekoe Fanning Ones TEAPF1-BEST-KE sold at $3.54-3.14 per kg compared with
$3.56-$3.10 per kg in week 50. [Reuters 20/12/11]
Week 50: Kenya Tea Prices Slide
The average price for top grade Kenyan tea fell in week 50 to US$2.88 per kg from US$2.95 per kg previously,
while the amount offered rose. Mombasa-based Africa Tea Brokers [ATB] said 142,561 packages were offered
for sale with 13.4% of it left unsold. In week 49, 132,541 packages were offered, with 14.8% left unsold.
Tea is a key export for Kenya and is seen fetching a record 106 billion shillings [US$1.2 billion] in 2011 up from
97 billion shillings last year. ATB noted buyers from Pakistan were the main buyers. Afghanistan and Egyptian
packers showed strong interest, while Yemen, Middle Eastern countries and Iran showed more activity. [$1 =
89.0000 Kenyan shillings] [Reuters 14/12/11]
www.delmas.com Page 34

Tea >>
RWANDA
New Plants Planned to Boost Tea Exports
A new strategy aimed at increasing Rwanda’s revenue from tea export has been unveiled by the National
Agricultural Exports Development Board [NAEB]. NAEB, the agency that oversees promotion of exports in the
country, has said that the new strategy will among other things seek to establish 5 new tea factories. The new
plants will be operational by 2014.
Rwanda's tea sector currently has 11 factories with an annual production over 23,000 tons of dry tea. Five of
these are 90% owned by private sector and 10% by small scale growers following a massive privatization drive
that begun with Sorwathe tea factory in 2003. Other factories privatized between 2003 and 2011 are Pfunda,
Nyabihu, Rubaya, Nshili-Kivu, Kitabi, Gisakura, Mata and Gisovu.
Mulindi, Rwanda's oldest tea factory constructed in 1960 and Shagahsa constructed in 1963 are the only ones
in which the government has a controlling stake of 55% and 70% respectively.
Land area under tea cultivation is about 15,000 hectares and production has grown from 5,414 tons in 1995 to
23,249 tons in 2010. He says the new goal is to increase tea production to at least 31,460 tons by 2014 and
41,873 tons by 2017. The NAEB is actually looking at having a total 31,588 hectares of tea plantations, 41,873
tons of harvest and export receipts of US$ 147million by 2017.
But there are challenges. NAEB says Rwanda's tea exports have not yet properly penetrated the international
market like Kenya's. And even if it had, price fluctuations are also to worry about. However approximately
97.3% of the Rwanda tea crop is exported in its raw form with 60% of it sold in auctions, 37.3% sold directly
and 2.7% sold locally. Every week at the Mombasa auction, Rwanda tea especially Gisovu BP1 fetches the
highest price. In fact, Kenya buys most of Rwanda's tea to boast their own local production for their huge
international market.
NAEB tea factories will be supported to acquire certification through trainings to enable then sell their products
on the international market. The other challenge is limited value addition with 97.3% of tea exported in raw
form to Kenya. This obviously robs the country of several millions of dollars that would have been earned from
finished products.
NAEB, with other stakeholders is now rooting to ensure good management of tea cooperatives by making a
follow-up on harvesting tea leaves in time and efforts to reduce fertilizer prices by having tea fertilizers
produced in Rwanda will also be supported. On the issue of limited land for expansion, land consolidation for
new tea plantations is being fronted as a solution in addition to replacing old tea fields to give way for new
ones.
Rehabilitation of main roads and feeder roads for quick delivery from fields to factories and modernization of
the tea processing machinery will also be considered. With the successful implementation of the activities to
improve tea production, Rwanda will be hoping to double export receipts. [Rwanda Focus 05/12/11]
UGANDA
Kisoro Gets Sh530 Million For Tea Growing
Kisoro district has received sh530 from the Ugandan government for tea growing. The money will be used to
kick start tea growing in the sub counties of Kirundo and Nyabwishenya near the Bwindi national park.
[New Vision 26/12/11]
Com-Watch Issue 8: January 2012
Page 35
Timber >>
Price Levels Unchanged As New Export Markets Absorb Increased Output
The news from producers is that there has been little change in the market situation even as buyers in Europe
and N. America prepare for the Christmas and New Year holidays.
Export prices for logs and sawnwood remain stable.
The doubts expressed by exporters in August and
September this year that the prices being obtained for
certain species were likely to fall back to the
previously established levels did not materialise.
The anticipated price correction did not occurred
even as sawnwood production in the region
expanded steadily throughout the year. Efforts at
market diversification to a wider range of
consumer countries have been successful for
some exporters and this has helped balance
production and demand levels thereby stabilising
prices.
[ITTO 1-15/12/11]
Producers Track Demand Trends To Avoid
Overproduction
In recent weeks log harvesting in Cameroon has not picked up
as expected as the rains lasted through into November, much longer
than usual. This has resulted in log stocks dropping below normal levels for this time of year. Elsewhere,
production and export volume have remained quite closely balanced but sawmillers are keeping a very close
check on customer demand forecasts hoping to avoid running into an oversupply situation. [ITTO 1-15/12/11]
Chinese Preference For ‘In Fashion’ Species Amid Slowing Demand
Producers are seeing a slowdown in demand from China but this
has not impacted the overall market, though certain species
are said to be ‘out of favour’. The effect of any decline in
demand is more likely to be felt by sawnwood producers
than log exporters. This, say analysts, is because the
availability logs for export continues to fall and
demand for export logs is form in India. However,
the recent weakening of the rupee is likely to soon
have an impact on the market. [ITTO 1-15/12/11]
Market Prospects For 2012 Hinge On
Resolution Of EU Debt Crisis
Producers are unanimous in their view that
forecasting how business will develop in the first
quarter of 2012 is virtually impossible. They are
somewhat reassured that the Eurozone countries
are determined to resolve the currency problem in
ways that will ensure more stable economies for the
biggest debtors. However the trade is aware that there
will still be large spending cuts that will negatively impact
demand for Central and W. African wood products.
[ITTO 1-15/12/11]
www.delmas.com Page 36

Timber >>
Ghana Export Permits Drop By A Third In July-September Period
A total of 1,235 export permits were processed, approved and issued by the Timber Industry Development
Division [TIDD] during Q3, covering shipments of timber and wood products through the ports of Takoradi and
Tema, as well as overland exports to neighbouring ECOWAS countries. The number of permits issued in the
third quarter declined by almost 30% compared to the previous quarter. The number of permits issued in
Kumasi fell drastically from the previous quarter figure of 622 to just 155.
This, say local analysts, could be due to the TIDD exercise of eliminating chainsaw lumber exports which go
mainly to neighbouring countries. The number of permits issued for Kumasi shipments to neighbouring
countries dropped from 519 in the second quarter to 54 in Q3. The highest number of export permits issued
was for sawnwood shipments which accounted for 45% of the total number of export permits issued during the
quarter under review. Permits for plywood export were the second highest. [TIDD 05/12/11]
Ghana Regional, Middle East And Asian Markets Sustain Price Levels
During Q3 2011the TIDD processed and approved contracts for the exports of sliced veneer, mouldings and
celtis sawnwood meant for the West African market. During Q3 exporters were able to meet the Mouldings
produced from species such as wawa, koto, otie, utile, ofram and walnut were shipped to Nigeria.
Contracts for exports of sliced veneer to the Ivory Coast and celtis sawnwood for Senegal were approved.
Minimum Guiding Selling Price [GSP] for plywood destined for the West African market, especially Nigeria.
Most export contract prices were well above the GSP. The TIDD data shows that prices for wawa sawnwood
contracts for Far and Middle East countries improved from levels recorded recently.
In contrast, exporters of mahogany sawnwood to the US market were, with a few exceptions, unable to satisfy
the GSP. The gap between the contract price and the GSP in the second quarter was around 3-7%. However,
in Q3 the difference between the price being offered by US buyers and the Ghana GSP widened to 7-11%.
Ghana’s underutilised species such as celtis, yaya and denya continued to find markets in the Middle and Far
East countries. Shorts of denya sawnwood continue to attract buyers for the Chinese market. [TIDD 05/12/11]
National Forest Forum Calls For Abridged Version Of Forestry Laws
Participants at the 4th National Forestry Forum-Ghana have called for an abridged version of laws on forestry
to be made available to stakeholders with special reference to forest fringe communities. Although there are
rules and regulations, they are shrouded in ambiguity, thereby creating room for corrupt practices and making
enforcement difficult. The 3-day meeting focused on issues affecting the sustainable management of forest and
wildlife resources in Ghana. [Ghana News Agency 11/12/11]
Com-Watch Issue 8: January 2012
Page 37
Timber >>
Agreement Reached Regarding CAR Wood Imports
Thanks to legislation passed by the European Commission on Nov. 28, all wood imports into Europe via the
Central Africa Republic [CAR] will be required to have a license denoting their legal origin, which will be fully
implemented by 2014. The agreement will look to make the timber industry, a large portion of the CAR market,
more transparent, so as to benefit the economies of both Europe and Africa.
The CAR will set up a national system to ensure business compliance with the legal framework set out for
timber production; the framework blankets all wood exports to the EU. By doing this, the CAR will eliminate
illegal deforestation and environmental degradation, so prominent in African nations, that contribute to climate
change. [New Europe 06/12/11]
Fallsway In US$1.5m Plant Expansion
Fallsway Timbers Limited will invest US$1.5 million in expanding its plant capacity in Livingstone, Zambia,
following the increasing demand for its products over the last year. The funds, additional to the US$1.5 million
which has been spent already this year, will set up horizontal and vertical wood processing unit with
saw-milling, kiln drying and furniture producing facilities. Fallsway produces about 600 cubic metres of finished
and semi-finished timber products annually which are sold to the domestic market and to the export markets
especially in South Africa and Botswana. [Times of Zambia 05/12/11]
Exporters See Slight Cooling In Business For The Chinese Market
Producers report, with a certain degree of surprise, that demand for Central and W. African hardwoods is
holding up well and prices remain generally firm. There have been some slight changes in price but this
reflects the normal ups and downs for individual species as buyers deal on a contract by contract basis.
Reports suggest that some exporters have noticed a slight cooling in levels of new business from buyers for
the Chinese market. It is said that stocks of some species are above current consumption levels in that market
or, in the case of okan, there is still a moderate overstocking due declining demand from flooring
manufacturers. The authorities in China have introduced measures to address the overheating in the housing
market, especially speculative construction activities. However, the underlying demand for housing in China is
undiminished. [ITTO 16-30/11/12]
Demand For Padouk, Sipo & Sapele Remains Strong And Sustained
Padouk sawnwood has been a strong market performer in recent months and producers report there are no
signs of a slowdown. There is even some continued demand from European buyers say producers. Sipo and
sapele sawnwood prices are stable and the market seems to have absorbed the recent higher than usual
production of sapele. [ITTO 16-30/11/12]
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Timber >>
A Steady Flow Of Orders For Some EU Markets Keeping Prices Stable
Some producers remain nervous about the stability of their markets in Europe due to the unsettled economic
situation. Countries such as Greece, Spain and Portugal and even Italy are unlikely to be able to finance new
infrastructure or housing project in the near future. The UK, Netherlands, Germany and even Belgium are still
buying West and Central African timbers although exporters report business is slow, but prices are stable.
[ITTO 16-30/11/12]
Brisk Demand In India And Vietnam Offsets Weaker Chinese Market
It is difficult to determine how well business will hold up into the first quarter of 2012. The slight downturn in
demand in the Chinese market is being factored into forecasts. In contrast, business is reported as very brisk
in India and, on a smaller scale in Vietnam. [ITTO 16-30/11/12]
Demand From South Africa And Middle-East Countries Helps Maintain Market Stability
There is good, steady demand for sawnwood for Middle East markets. This, and steady demand from S. Africa,
is a great help in maintaining the market. [ITTO 16-30/11/12]
Global Green Carbon Announces First REDD+ Project in Cameroon
Global Green Carbon Corporation [GCG] and University of California [UCLA] Center for Tropical Research
[CTR] consortium announced that it has received formal Letters of Approval from the Cameroon government to
advance feasibility assessments for the first REDD+ [Reduced Emissions from Deforestation and Forest
Degradation] project in Cameroon, located in and around the Dja Biosphere Reserve [DBR].
The Cameroon Ministry of Forestry and Wildlife, MINFOF, and Ministry of Environment and Nature Protection,
MINEP, have awarded official approval to the GGC-CTR consortium to conduct REDD+ feasibility assessments
within the Dja Biosphere Reserve. The DBR project aims to reduce deforestation and degradation and
encourage an increase in carbon stocks within the 624,000 ha of reserve. [PR Web 06/12/11]
Com-Watch Issue 8: January 2012
Page 39
Timber >>
Ghana Third Quarter Exports Continue Downward Trend
Data on contract approvals by the Timber Industry Development Division [TIDD], show that exports of timber
and wood products continue to decline. This, say analysts at the TIDD, is mainly due to the dwindling raw
material base. Contracts for a total volume of 76,014 cu.m of wood products were processed and approved by
the TIDD in the third quarter of 2011.The contract volume approved for the period was 12% lower compared to
volumes in contracts approved during the second quarter. The table below shows the breakdown of volumes in
contracts approved by product during the quarter under review.
TIDD Third Quarter Contract Approvals By Product
Product Category Volume [cu.m] Percent
Primary 4,279 5.63
Secondary 65,164 85.73
Tertiary 6,571 8.64
Total 76,014 100.00
Product 2nd Qtr 2011 3rd Qtr 2011
PRODUCT Permits Issued Permits Issued % Change
Lumber 1,032 564 -45.3
Rotary Veneer 31 29 -6.5
Sliced Veneer 126 101 -19.8
Curl Veneer 1 1 0
Boules 17 11 -35.3
Plywood 271 279 3
Mouldings 156 135 -13.5
Dowels 5 5 0
Floorings 15 4 -73.3
Layons 3 2 -33.3
Teak Logs 80 86 7.5
Gmelina
Billets/Poles 10 16 60
Blockboard 4 2 -50
Profile Boards 4 0
TOTAL 1755 1235 -29.63
Sawnwood exports declined by 9% for the second consecutive quarter from a volume of 28,532 cu.m in the
second quarter to 25,913 cu.m in the third quarter. Total contract approvals for export of plywood also fell
[down 12%] from a volume of 30,373 cu.m in the second quarter to 26,734 cu.m in the third quarter. Around
87% of the approved plywood export contracts were for shipment within the West African market, with the
remaining 13% for the European market, particularly Greece and Belgium.
A total of 6,366 cu.m volume of veneer export contracts were processed and approved. The volume
represented in
these contracts was down 18% on the previous quarter. The breakdown of veneer exports by product is as
follows: sliced veneer [4,778 cu.m, representing 74.5%]; rotary veneer [1,585 cu.m representing 25%] and
very small quantity of high value curl veneer.
Exports of teak poles/billets/logs also declined dropping from a volume of 13,324 cu.m in the second quarter to
4,279 cu.m in the third quarter, a drop of 68%. However, the volume of teak sawnwood in approved export
contracts increased from 3,038 cu.m in the second quarter to 5,051 cu.m in the third quarter.
Contracts processed and approved for the export of rosewood also increased. For the third quarter fifteen
permits were issued for the export of 1100 cu.m of rosewood sawnwood to China at a value of €278 million.
[ITTO 16-30/11/12]
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