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Ivory Coast mid-crop cocoa harvest hit by poor weather

6 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Purchases of cocoa in Ivory Coast’s mid-crop season that starts in April have ground to a halt because of a lack of rain and harsh winds that have also hit quality, farmers and buyers said.

Forecasts for the April-October mid crop say it could drop to between 380,000 and 390,000 tonnes, a 24 percent fall from 502,000 tonnes in the same harvest last year, according to several trading houses and cocoa producers.

The West African country is the world’s biggest producer of cocoa, with output of around 1.8 million tonnes per year, of which the mid-crop represents about 30 percent. Dry weather has already reduced forecasts for the 2015-2016 season to around 1.6 million.

Many exporters have reduced or stopped buying altogether as a lack of rain has made beans smaller and twice as acidic as usual.

“The quality is … at a level where we would prefer not to buy at the moment,” said the director of an exports company in Abidjan, who declined to be identified. “We will see in June if that changes.”

Only seven of more than 100 accredited operators have bought beans and opened their factories so far. About 80 percent of exporting companies have stopped buying, exporters said.

On Monday exporters bought 2,800 tonnes of cocoa in the ports of Abidjan and San Pedro, down significantly from the normal haul of 20,000 tonnes.

While smaller beans may be bought by local grinders instead of exported, they produce more acidity and less butter than larger ones, forcing grinders to purchase more for the same result. Acidity levels, or FFA, stood at 3.5 percent against a usual level of 1.75 percent, exporters said.

As a result, grinders have largely foregone purchases so far this mid-crop season, opting to wait for any improvements in the crop that may appear toward the end of the harvest.

Recent rain in the main cocoa-growing regions was too late to affect the development of pods on the trees, farmers said.

“We are happy with the rain’s return, but it’s too late for the production,” said Salomon Lohami, who owns a seven-acre cocoa plantation in Kahin. “If it was January or February, that could change the harvest, but not at this point.”

 

(By Ange Aboa. Writing by Makini Brice; Editing by Matthew Mpoke Bigg and David Holmes)

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We can’t pay: Zimbabwe farmers resist compensating evicted white landowners

22 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe’s plan to win back international funding by paying compensation to white farmers forced off their land faces a major snag: the black farmers expected to stump up the cash say they don’t have it.

The new occupants working the land, many of who had few farming skills when they were resettled, say they can barely make ends meet, let alone pay an extra levy.

Their agricultural output is a fraction of the level seen before 2000, when President Robert Mugabe – saying he sought to correct colonial injustices – introduced land reforms which led to thousands of experienced white farmers being evicted.

They are also being hammered by Zimbabwe’s worst drought in a quarter of a century and toiling under a stagnating economy that has seen banks reluctant to lend and cheaper food imports from the likes of South Africa undermining their businesses.

“Are farmers able to pay? I will say no. Is the land being productive? I will say no again,” said Victor Matemadanda, secretary general of a group representing war veterans who led the land seizure drive in 2000 and are now farmers.

He told Reuters that many farmers could not even meet water and electricity bills and that it was the government’s obligation – not theirs – to pay the compensation.

Zimbabwe Commercial Farmers Union President Abdul Nyathi also said his members would not be able to pay compensation. “Most of the farmers face viability issues, the government will have to look at other ways of raising money,” he added.

Mugabe’s land reforms have led to about 5,000 white farmers being evicted from their land by his supporters and war veterans over the past 16 years, often violently. More than a dozen farmers have been killed.

The land seizures, along with allegations of vote-rigging and rights abuses – all denied by Mugabe – led to Zimbabwe being targeted by sanctions from Western donors. This compounded the economic plight of the country, which saw financing from the International Monetary Fund, World Bank and African Development Bank frozen in 1999 after it defaulted on debts.

The IMF’s head of mission to Zimbabwe, Domenico Fanizza, said this month that improving fiscal discipline and re-engaging the international community should be priorities for Harare. He said this would “reduce the perceived country risk premium and unlock affordable financing for the government and private sector”.

 

DIVIDED OPINION

In an attempt to woo back international donors and lenders, Finance Minister Patrick Chinamasa announced a package of major reforms on March 9, including the farm measure and a big reduction in public-sector wages. He said it had the full backing of Mugabe.

The farm plan involves 300,000 families resettled on seized land paying an annual rent – based on the size of their farms – towards a compensation fund for those evicted.

If they are unable to pay, however, it could be a major setback for the government’s plans to shore up an economy that is stagnating after a deep recession in the decade to 2008, which slashed its output by nearly half, drove hundreds of thousands abroad in search of better paying jobs and has left the jobless rate at around 85 percent.

The finance ministry did not respond to repeated requests for comment about the ability of farmers to pay the levy.

Reserve Bank of Zimbabwe governor John Mangudya told Reuters that the farmers’ situation should improve once the government grants them 99-year leases on their land, which he said would make it easier for them to secure financing from banks and to pay rent towards the compensation fund.

All agricultural land in Zimbabwe is owned by the government and, at present, farmers have no legal claim on their farms – which they say has made banks reluctant to extend loans to buy fertilisers, seed and chemicals so they can raise output. But the government says it will imminently grant the leases.

“We are saying that the land should produce, but we also know what the constraints are to increase production,” said Mangudya. “That is why we need to finalise on the 99-year land lease agreements to make them bankable so that farmers have security of tenure. With that there is no reason why farmers should not be able to pay (rent).”

Mugabe’s land reform programme is a highly emotive issue, which has divided public opinion. Supporters say it has empowered blacks while opponents see it as a partisan process that left Zimbabwe struggling to feed itself.

“The land revolution was a necessity and if the economy was running very well farmers would be able to pay the rent,” said Matemadanda of the war veterans’ group. “The prevailing economic conditions do not allow.”

The land seizures have led to a steep fall in commercial agriculture output; yields for the staple maize have fallen to an average 0.5 tonnes percent per hectare from 8 tonnes in 2000 when white farmers worked the land.

Mugabe acknowledged the skills of evicted white farmers last week, saying they had helped neighbouring Zambia to produce excess maize, which Zimbabwe was now importing.

 

ELECTIONS

A treasury ministry circular said that compensation would be paid out of rent from black farmers who benefited from the seizures. Chinamasa has not said when farmers would be expected to start paying the rents, or at what level they would be set.

When announcing the measures, he said production on black-owned farms was “scandalously low” and that the economy was under siege from the drought.

The white Zimbabweans who accounted for the majority of those evicted will be compensated only for the improvements they made to the farms, while the foreign owners forced out will be paid full compensation for land and improvements, under the plan.

Chinamasa said Harare broke bilateral investment agreements with other countries when it seized farms owned by foreigners.

Tony Hawkins, professor of business studies at the University of Zimbabwe, said the government was “going through the motions to keep the IMF happy”.

“They probably want the international community to see that they are doing something,” he said. “I doubt they will press with this ahead of the elections,” he added, referring to the 2018 general election. Farmers are an important voting block for Mugabe’s ruling ZANU-PF party.

Hundreds of evicted white Zimbabwean farmers are now farming in Zambia, Mozambique, Malawi and Nigeria, while others migrated to Europe, New Zealand and Australia.

Hendrik Olivier, director at the formerly white-dominated Commercial Farmers Union (CFU), said the government had not yet approached evicted farmers to discuss compensation, and also cast doubt on the plan’s viability.

The CFU, which once boasted 4,500 farmers who produced 90 percent of Zimbabwe’s export crops, including tobacco and horticulture produce until 2000, now only has 300 members.

“It’s a huge step forward, lets acknowledge that. In the past the government has said that it won’t pay compensation,” Olivier told Reuters.

“But if you are talking about new farmers paying a levy, that’s not gonna work, that’s not gonna pay our compensation.”

 

(By MacDonald Dzirutwe. Editing by James Macharia and Pravin Char)

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Ivory Coast 2015 cashew output hits record 702,000 T

11 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABIDJAN (Reuters) – Ivory Coast’s 2015 cashew nut crop rose 24 percent to a record 702,000 tonnes and marketing of the crop will begin on Feb. 15, the West Africa nation’s government said on Wednesday.

The government has set a minimum farmgate price of 350 CFA francs ($0.5988) per kilogram, compared with 275 CFA francs the previous year, said government spokesman Bruno Kone. He said farmers have received a total 119 billion CFA francs in 2015.

In addition to being the world’s top cocoa producer, Ivory Coast is also Africa’s biggest cashew grower. The increase in cashew output has been boosted by government reform and investment, the statement said. A decade ago, Ivory Coast produced around 80,000 tonnes of raw nuts per year.

With output growing by over 10 percent annually amid strong demand from Asia, the cashew sector has attracted the attention of a government keen to kickstart the economy after a decade of war and political chaos that ended in a brief 2011 civil war.

($1 = 584.5300 CFA francs)

 

(Reporting by Loucoumane Coulibaly; Editing by Matthew Mpoke Bigg)

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South Africa must admit national drought crisis to help farmers

4 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

PRETORIA (Reuters) – South Africa must formally declare a national disaster for the government to release relief funds to help farmers through the worst drought in a century, the country’s largest grain producer group said on Wednesday.

While higher than expected January plantings saw Grain SA reduce its 2016 maize imports figure to 3.8 million tonnes from 5 million tonnes previously, late seeding has put young plants at high risk from extreme weather over their growth cycle.

With five out of nine provinces labelled disaster zones due to drought, the country now needs to acknowledge the situation nationally as farmers are starting to capitulate, Grain SA Chief Executive Jannie de Villiers told Reuters.

“Our Minister of Agriculture is well informed but I think we need leadership to declare it a disaster so that the process can be triggered,” he said.

The Agriculture Ministry did not immediately respond to request for comment by email and phone.

Should a national disaster be declared, emergency relief funds would be released from the National Treasury to eligible farmers. However, any funding would probably come too late to secure the future of farmers on the brink of going bankrupt or selling their holdings, De Villiers said.

The Mpumalanga, Limpopo, KwaZulu-Natal, Free State and North West provinces have been declared disaster zones for agriculture as a blistering drought sucks moisture from the soil and dam levels fall, causing a delay in planting crops for the crucial southern hemisphere summer season.

The South African Weather service said last week the El Nino weather pattern which triggered the historic drought is expected to persist, toughening the situation for farmers who scrambled to plant crops when rains started.

Farmers of cattle, sheep and goats have been urged by the government to cut the sizes of their herds as the drought has scorched grazing land and the 2016 maize harvest is expected to fall 25 percent from last year to 7.44 million tonnes.

Industry sources say food prices may rise 20 percent or more this year, putting upward pressure on overall inflation, which rose to 5.2 percent in December from 4.8 percent in November.

The most traded July white maize contract closed 1.6 percent higher at 4,943 rand a tonne on Wednesday. White maize for delivery in March is trading near record highs above 5,000 rand a tonne.

De Villiers also signalled trouble ahead for the subsequent crop season, saying farmers would struggle to obtain crop finance after this year’s disaster and restrictions on insurance for lost income.

“Can the farmers plant again if they don’t have crop finance? If they can’t pay their debt the farmers are not going to plant next year even if its raining.”

 

(By Zandi Shabalala. Reporting by Veronica Brown and Zandi Shabalala; editing by James Macharia and David Clarke)

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Somalia resumes banana production, hopes to grow exports

27 December 2015 Comments (0) Africa, Business, Featured

somalia banana

The banana industry is making a comeback in Somalia after two decades of war devastated its leading export.

The East African country’s fledgling effort faces significant challenges, including lack of irrigation and storage infrastructure as well as a wait-and-see attitude of potential export partners abroad who are mindful of Somalia’s recent history of violence and instability.

While most of Somalia’s current crop goes to local markets, exports have begun to Middle Eastern countries including the United Arab Emirates.

About 40,000 tons annually

Currently, Somalia has about 4,000 acres in cultivation, producing about 40,000 tons annually, according to FruitSome, a company formed by about 100 growers to market Somali bananas abroad.

The current planting is less than 14 percent of the 30,000 acres that were in cultivated when the industry was at its peak. In 1990, before the war began, Somalia was the largest banana exporter in East Africa. Banana exports accounted for about $96 million and produced Somalia’s leading source of outside income.

“Prior to 1991, Somalia was renowned for its thriving banana industry. However, insecurity, lack of inputs, and poor infrastructure, has over the last two decades led to a devastating decline and eventual collapse of banana exports,” according to the Food and Agriculture Organization of the United Nations, which is providing assistance to the Somali banana industry.

Irrigation and production infrastructure destroyed during the war

The military government of Somalia was deposed by rebels in 1991, throwing the country into chaos, especially in the south, where bananas are farmed, and in the capital of Mogadishu. During the fighting, irrigation and production infrastructure was destroyed and banana growers lost access to export markets as pirates operated off the coast of Somalia. Drought and famine exacerbated the hardships in 2011.

An internationally backed central government was installed in 2012 and the nation has slowly become more stable, although insurgents of Al-Shabab, an Al-Qaeda ally, continue to operate in Somalia.

Growers, many of whom fled to refugee camps in neighboring countries, have begun to return to farms they were forced to abandon during the violence.

Lack of refrigerated storage: another challenge

“This place was a bush a year-and-half ago. We cleared the bush and now more than hundred people work here every day,” Omar Osman, a farm manager in Afgoye, said.

“Things are calm. Thank God. Us, Somalis, we have to make use of God’s blessings. This country has everything and now it is possible to make use of the land.”

In addition to clearing brush and replanting, growers must reconstruct irrigation systems destroyed by fighting factions. Lack of refrigerated storage is another challenge.

The UN Food and Agriculture Organization (FAO) has provided direct food aid to families in Somalia as well as assistance in restoring and increasing food production, including seed and land preparation services as well as farmer training.

Turkey to help Somalia

The FAO also developed several virus-free banana varieties, and Somali growers chose one, William, that is tolerant to virus attacks and drought. The FAO began making seedlings available to growers in 2012.

Turkey has also undertaken efforts to help Somalia rebuild its agricultural and fisheries sectors.

“If invested well, Somalia’s fisheries and agricultural sectors can feed the entire Africa,” said Galip Yilmac, the Somalia program coordinator with the Turkish Cooperation and Coordination Agency (TIKA).

Banana exports resumed in 2014 to Middle East markets including the United Arab Emirates. The FAO said Iran and Turkey also expressed interest in Somali banana imports.

But the Somali growers also face skepticism from some quarters. Dole, for example, invested in Somalia in the past. But a representative of the company said “right now it seems difficult to develop any agriculture program in Somalia because of the local situation.”

Somali’s bananas sold in local markets

For now, most of Somali’s bananas are sold in local markets, and livestock has replaced bananas as the country’s leading export. Other exports are fish, charcoal and scrap metal. Export partners are the United Arab Emirates, Yemen and Oman.

Somalia has a population of 10.8 million. Its 2013 GDP was $1.4 billion, according to the United Nations.

Italian colonists introduced bananas to the fertile Shabelle and Juba river valleys of southern Somalia in the 1920s. The industry grew steadily and it peaked in the 1960s. Somali bananas are known for their sweet taste and creamy texture.

Rebuilding Somalia’s banana industry

FruitSome, the company formed by banana growers in 2012, is looking to increase exports, primarily to Europe and the Persian Gulf.

“Close to a hundred farmers are still registered as members of the banana growers association. They have been hoping to be able to export again but drought, civil war, social unrest and a shortage of irrigation infrastructure has so far made it impossible to revive the industry until very recently when the country has begun to re-emerge socially and politically, supported by international partners,” FruitSome said.

Despite the challenges, the FAO was upbeat about prospects for rebuilding Somalia’s banana industry. “With peace slowly returning to southern Somalia, this makes investment in the banana industry a key priority for FAO and its national and international partners,” the UN agency said.

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