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Agrique Africa investment mission 2017 (AAIM2017)
Now in its 3rd Year, Welcome2Africa International, a private sector development firm, focused on catalyzing finance and investments into Africa’s Agribusiness sector, is proud to be hosting AAIM2017 in Nigeria, with the core goal of catalyzing finance and investments into Nigeria’s Agribusiness sector.
This year, Welcome2Africa International is partnering with African Development Bank, AFEX Commodities Exchange Limited and Nigerian Investment Promotion Commissionto put forward its Agrique Africa Investment Mission 2017 in Nigeria, with the core goal of catalyzing finance and investments into Nigeria’s Agribusiness sector.
Click on image to see the full promotional poster
On our panel this year, we have put together amazing panelists to expose to us the key considerations necessary to structure investments into the Food and Agribusiness enterprise in Nigeria.
A sneak peek into their discussion will follow the line of thought of the Food and Agricultural Organization indicating the link between food and agriculture, its evolution and continuum.
A peep into the future is a revelation that, the food industry will increase the quality and diversity of the products it produces. Food manufacturers will have particular expectations of agriculture as a supplier of their raw materials.
It will be safe to note that quality of production will be a key consideration to structuring investments into Agribusiness and thus agribusiness will see to it that it meets increasing emphasis on quality. In all, Quality has proven beyond doubt to be a key consideration in accessing investments.
In terms of food processing, investors are most likely to consider the ease of processing in the food industry. Like all industries, reductions in the costs of capital equipment, wages and inventories are important objectives. For example, farmers who can deliver on the ‘just-in-time’ principle will contribute towards reducing a manufacturer’s working capital and space requirements.
You can expect to get a full dose of the identified considerations that you can consider as investors to structure investments into Food and Agribusiness at AAIM 2017 as these amazing panelists give their explicit contributions at their session at the Investment Forum.
Dr. Irede Ajala ; Senior Investment Adviser to the Honourable Minister of Agriculture and Rural Development, Nigeria
Adenike Fajemirokun, PhD, SIRM; Group Chief Risk Officer, Dangote Industries Limited Martin Eigbike; Associate Partner, Dalberg Global Development Advisors Richard Ferguson; African agribusiness advisor, PwC Moderator: Christof Walter – Christof Walter Consulting Ltd, UK
AAIM 2017 is closer than ever and it is made up of an Investment forum component open to just 150 delegates, and takes place on 13th+14th of June, at Sheraton Hotel, Abuja, Nigeria. There is also an exclusive Site Visit for 8 Investors to visit 4 pre-vetted Agribusinesses.
Key features of AAIM2017 include
• Examination of the latest investment/finance strategies for Nigeria’s Agribusiness Sector
• Blended Finance for Agribusiness development in Nigeria
• Innovative and Sustainable financing approaches for Agribusiness in Nigeria
• Government policies to promote investment and agribusiness development in Nigeria
• Agribusiness investment trends in Nigeria
• Pitches from pre-vetted Agribusinesses seeking expansion finance
• Case studies from Agribusiness Investors in Nigeria
You cannot afford to miss this!
Follow this link, https://www.agriqueafrica.com/copy-of-registeration-form-nigerian to register now!
By Munyaradzi Makoni
International Centre of Insect Physiology and Ecology (icipe) has promoted protein-based bait, fruit fly mania in Embu, Kilifi, Meru and Tharaka-Nithi Counties of Kenya, where fruit growers there have used it with positive benefits.
The protein food bait technology is one of the key components in the integrated pest management (IPM) packages specifically targeting female flies.
“Growers in Embu and Meru have reported that when they use the icipe fruit fly IPM package, fruit fly infestation of mango fruits is reduced by over 90 percent, insecticide use is reduced by 46 percent, amount of mango produce rejected by buyers is reduced by 55% and the income of growers is increased by 40 per cent,” Liz Nganga, icipe spokesperson said.
Fruit flies, are estimated to cost the African continent USD2 billion every year.
Previously, Mazoferm, a product of Corn Products Kenya, had been on the market and more than 15,000 growers were using the technology.
When the business strategy of Corn Products Kenya changed, Mazoferm was pulled out of the market in 2012.
“This created a gap and growers have been asking icipe for assistance for an alternative product to use,” said Nganga.
A new Fruitfly Protein Bait Facility in Makuyu, Muranga County, about 80 kilometres from Nairobi, Kenya was officially launched on 29 March.
Operated by Kenya Biologics, the facility will commercially produce Fruitfly Mania, a bait to enable growers to control fruit flies, the main pests of mangoes in Kenya.
“Our investment with Kenya Biologics was meant to fill this gap and is therefore strategically poised to benefit the growers who can now access a protein food bait product locally (Fruitfly Mania), at a cost 70 percent cheaper than imported products,” Nganga said.
Sunday Ekesi, Interim Director of Research and Partnerships and head, African Fruit Fly Programme at icipe said although there is high demand for protein food baits in Kenya, currently, there were no local producers of the products.
“This means that protein baits have to be imported and retailed at exorbitant prices, which makes them unaffordable to smallholder growers,” said Ekesi.
Fruitfly mania is based on icipe research, which has shown that an extract from brewer’s yeast, an industrial by-product from a local brewery, is capable of controlling fruit flies to levels comparable to commercial protein baits on the Kenyan market.
icipe is currently promoting the technology at Machakos, Makueni and Kitui.
The new facility has a production capacity of 2,000 litres per day, enough to meet the local demand of over 229,000 households whose livelihoods depend on mango production in Kenya.
About 400,000 mango growers would benefit from fruitfly mania, once the product is registered across East Africa to include Uganda and Tanzania.
Nganga said icipe recommends that growers use two or more fruit fly Integrated Pest Management packages to get greater benefit.
icipe’s fruit fly integrated pest management research over the past 20 years has been supported by donors from Germany, Switzerland, the European Union, UK, Sweden and Kenya.
Amidst what is labelled as the worst drought in Cape Town in 100 years, a city official told delegates at the African Utility Week conference there was no way they could reasonably have anticipated the severity of this drought.
Cape Town residents are now bracing themselves for level 4 restrictions.
Gisela Kaiser, a city official who addressed delegates on Wednesday said despite water restrictions they are now essentially “waiting on a miracle”.
By Friday the dam levels were already at 21, 6% down from 70% in 2015 at the start of water restrictions. Kaiser said on the brink of winter when heavier rains are expected, meteorologists now warn this winter will be as dry as the previous two.
“Nothing can be taken for granted anymore,” she said and invited delegates to use water sparingly during their stay in the city.
Kaiser said with the help of consumers and water restrictions they managed to cut down consumption and have so far saved up the equivalent of the Wemmershoek dam of about 59 million cubic metres which translates into about “23 600 swimming pools or approximately “295 million baths”, she boasted.
Water losses, said Kaiser, has been reduced from about 25% in 2009 to below 15% as of today. This she attributed to various interventions among which are the rate of pipe bursts that the city managed to reduce. “It is less than half from 64 bursts p/ 100 km back in 2010 to 31 bursts per 100/km – saving millions of litres of water.”
She told delegates the city is doing everything it can to serve almost 4 million people, “bearing in mind that Cape Town is a water scarce region and SA is the 31st driest country in the world”.
“We know that modelling the past to predict the future is not full proof, but there is no way we could reasonably have anticipated the severity of the drought at the time. Whenever water strategy is created it is informed by historical water patterns,” she said.
According to Kaiser additional water supply schemes for the region were deferred before the drought took hold. “The decision to defer plans for supply schemes was followed by exceptionally low rainfall.
“At the time,” she said, “it was not practical to set aside billions of Rands for a rainy day that might not come whilst there are more pressing humanitarian needs.”
She also referred to desalination plants as being hailed as a possible alternative, but said there was no way it could be built to scale quickly enough to compensate for such a drought.
Meanwhile Justin Friedman, founder of FLOW (For Love of Water), an organisation committed to saving water again called on industry leaders and stakeholders present to sign a pledge to commit themselves to water conservation. Friedman told delegates this commitment can be in the form of money, time, actions or resources – all of which can make a difference in water consumption.
Delegates will on Friday have an opportunity to visit the Langrug community water project in Franschoek to see how behaviour around water consumption can be changed for the better.
Over 7000 decision makers from over 80 countries are attending the three day conference and expo where the latest developments, challenges and opportunities in the power and water sectors will be under the spotlight.
Over 300 experts will over three days discuss innovative solutions to the continent’s energy and water challenges and the exciting opportunities for utilities and industry players.The conference ends Thursday.
Written by: Alicestine October
Issued by African Utility Week:
Senior communications manager: Annemarie Roodbol
Telephone: +27 21 700 3558
Mobile: +27 82 562 7844
The Estate also operates three crèches and a pre-primary school for its farm workers where some 90 children receive proper tuition as well as three meals a day. Teachers at one of the crèches are from the left at back Elsie Skippers and Tersia Januarie with company directors Gerrit van der Merwe Jr, Tiekie September and Dirk Dirks.
Africa Agribusiness Media by Alex Hitzemann
Prof Mohammed Karaan delivering his address
Africa is a continent with abundant natural resources and huge market potential but the agriculture sector is in dire need of better management should we want to leave South Africa a better place for our children.
This was the crux of the message delivered last night by noted agricultural economist Prof Mohammed Karaan at a gala event of one South Africa’s leading citrus estates.
In the same vein Prof Karaan pointed out that the South African government’s effort to redistribute agricultural land has not achieved the desired results and their strategy should be revised.
Prof Karaan was the guest speaker at the ALG Estates gala event in the upper Olifants River Valley near Citrusdal. The Estate celebrated their more than 250 years of business in farming with the inauguration of brand new state of the art pack house facilities. He commended the farming operation not only for their investment in their new equipment but also in their people.
ALG Estates manages one of the country’s most successful Black Economic Empowerment (BEE) agriculture programs which is making a profit and expanding. For the past seven years the Estate also passed stringent the annual auditing by Fair Trade an organization which promotes fair labor practices worldwide.
“We decided to stay in the country and re-invest in our business despite the turmoil and uncertainties we experience in South African agriculture today,” says Gerrit van der Merwe, CEO of ALG Estates a family-run business whose ancestors already settled in 1750 in the valley.
Some guests who attend the ALG Estate’s 250 Years and Beyond Gala Event were from left Sean Walsh (CEO Cape Agri), Prof Mohammed Karaan (Agricultural Economist), Tiekie September (Director Cedar Citrus), David Cuff (Head Buyer Fresh Produce: Woolworths South Africa) and Gerrit van der Merwe (CEO ALG Estates).
“By investing in our people through various social upliftment programs we try to be part of the solution for the country’s future. We have a very good relationship with our workers. Many of them have been with us for generations,” says Van der Merwe.
The estates founded their BEE project Cedar Citrus (PTY) Ltd in 1999 as a joint venture with 32 farm workers. It started making a profit in 2010. During 2015 this BEE company exported 1500 tons of citrus from their production unit of 36 hectares realizing a total turnover of R12 million for the year. It has now paid off its startup loan to the Industrial Development Council and expanding its operations with the purchase of additional land using their own funds.
The Estate also operates three crèches and a pre-primary school for its farm workers where some 90 children receive proper tuition as well as three meals a day. It also built several sport facilities and assists workers in their sport programs throughout the year with traveling and equipment costs partly paid by Fair Trade subsidies. The Estate in addition also supports 42 children of farm employees with school bursaries to attend schools in the district.
ALG Estates is one of South Africa’s top citrus producers which commands a leading edge on many fronts. It has 41 different citrus cultivars under production which enables the estate to produce citrus 12 months of the year.
The Estate won the title National Farmer of the Year in 2010, South Africa’s most coveted agricultural award.
Anthony Penderis on behalf of ALG Estates compiled this report.
Gerrit van der Merwe: 082 569 8787; firstname.lastname@example.org
Anthony Penderis: 084 306 0331; email@example.com
Zambia's president, Edgar Lungu, has pledged to support to the agriculture sector by improving the provision of farming inputs and finding new markets for farming products.
By Nawa Mutumweno
Of all Zambia’s economic sectors, agriculture holds more promise than any other in the country’s march to economic diversification.
Since mining, the country’s prime industry, is a wasting asset, it is important more than ever before, to explore sectors that are sustainable to wean the country from the copper spoon it was born with.
Zambia’s has 40 percent of the water resources of the entire southern African region. Of the 58 percent arable land, only 14 percent is currently cultivated. In real terms, this means that of 42 million hectares, only 1.5 million hectares is farmed each year.
The agricultural sector employs 85 percent of the population and makes up around 20 percent of overall gross domestic product (GDP).
Food processing represents an outstanding investment opportunity in Zambia due to vast natural resources, extensive arable land, ample water and investment incentives and many joint-venture options.
The Zambia Association of Manufacturing (ZAM), says despite its strong performance, the country’s food-processing industry has achieved only around one-quarter of its capacity and potential so far.
‘’There are vast opportunities for more investments in most sub-sectors of Zambia’s food-processing industry, for both small-scale and large-scale projects,’’ ZAM says.
High potential sub-sectors encompass growing and processing oil seeds; downstream processing of meat and dairy products; producing palm oil; manufacturing soy-based food products; million wheat, rice and maize to produce flour; producing juices, carbonated drinks, beer and other beverages; processing groundnuts; producing ketchup and other tomato-based products; roasting and grinding coffee beans; processing cassava, pineapple, mangoes and sugar cane; producing dried fruit and processing fish to exploit Zambia’s vast fish resources.
Other investment opportunities include producing tinned foods, confectionery, bread products, honey and cheese.
One example of potential food –processing projects in Zambia is COMESA’s Regional Investment Agency (RIA) promotion of a greenfield project to build pineapple –canning factories in the north-western part of the country
Mwinilunga district in the province has been ranked as Zambia’s best location for pineapple production. In the 1990s, a pineapple processing facility in the area produced around 11,368 tonnes
from 1,421 hectares of pineapple plantations. The facility was later closed down. The planned new plant is expected to produce about 12,000 tonnes of processed pineapple per annum.
In diversification away from maize, one of the sub-sectors which is being promoted is aquaculture. In August 2015, the Government launched a $10 million privately-owned fish farm, Yalelo. The firm, located on the shores of Lake Kariba in southern Zambia, already produces 6,000kg of tilapia daily.
In a deliberate effort to increase domestic fish production, the Government is encouraging private investment.
The Common Market for Eastern and Southern Africa (COMESA) recently received $400,000 to support the growth of the leather sub-sector in Zambia and three other member countries.
Zambia has the potential to grow its leather value chain to half a billion dollars a year if all hides are transformed into finished products. The state has also agreed to waive taxes on leather production machines and equipment to further enhance growth.
Farm Block Development
In a bid to grow the agriculture sector, Government is developing the Farm Block Development Programme with vast opportunities for investors. Ten farming blocks have been identified (one in each province).
‘’The Nansanga Farming Block in Serenje, central Zambia, is the most advanced, with roads constructed and power connected. We have already allocated pieces of land to small-scale and commercial farmers. We are in the process of awarding 10 000 hectares of land to what is referred to as a core venture,’’ Minister of Agriculture, Given Lubinda said.
Zambia’s future indeed lies in agriculture and President Lungu’s administration has emphasized its determination to pursue an agriculture-led economy through the rolling out of irrigation schemes and other innovations throughout the country.
Speaking during the launch of the construction of the $28 million Mwomboshi Irrigation Dam in Chisamba, central Zambia recently, President Lungu reiterated his commitment to diversifying the agricultural sector.
‘’The construction of this dam gives a practical expression of my Government’s resolve to put agriculture at the centre of our economy. Irrigation farming is an act of diversifying the sector away from rain-fed agriculture, President Lungu said.
Currently, the construction of dams is underway in Lusitu (Chirundu) and Musakashi in Mufulira district.
‘’We aim to have over 75,000 hectares by 2030. To achieve this, Government will ensure adequate funds for irrigation development annually. Currently, K56.7 million has been set aside for irrigation in the 2016 national budget,’’ he pointed out.
Key players in Zambian agribusiness
These include, inter alia, Zambeef Products, Zambia Sugar and the Zambia Breweries Group, a subsidiary of South African giant SABMiller, one of the world’s largest beer manufacturers.
Zambia must take action to invest in industrialization in order to be competitive and take advantage of the business opportunities in the region, Zambeef Joint Chief Executive Officer Dr Carl Irwin told delegates at the fifth Zambian International Investment Forum (ZIIF) this week.
“Zambeef strongly believes in Zambia’s potential to feed itself and the region given its abundant resources; good soils, climate, readily available as well as the ability to produce most crops given the right investment. But only in adding value to our produce can we fully realise the sector’s full potential,” said Dr Irwin, who was speaking at the opening of the high-level conference, which was officially launched by H.E. the President, on. Edgar Chagwa Lungu and attended by Minister of Commerce, Trade and Industry Hon. Margaret Mwanakatwe.
Dr Irwin highlighted some of the benefits of focusing on value adding operations and the opportunities presented for the national economy; increased national food security, social development in rural areas, job creation, and tax and duty generated as result.
Zambeef alone has generated US$220 million in revenue for the financial year 2015 and US$38 million of foreign exchange income for the nation; invested more than US$150 million in the last eight years; employed more than 6,000 staff and contributed US$18 million in tax and duty paid to the Zambian government
Margins in both the regional and EU export markets are expected to remain under pressure from surplus sugar stocks on the world market. Realization in these markets will continue to be influenced by exchange rate movements.
Zambian Breweries and National Breweries are among the largest buyers of maize, barley, cassava and sorghum in the country.
The group purchases a significant quantity of raw materials locally. A total of 40,000 tonnes of maize is bought from small-scale farmers for use in the production of opaque and clear beer.
The group has engaged close to commercial farmers in the growing of barley, with a planned annual uptake of 12,,000 tonnes. In 2015, two small-scale barley outgrower pilot programmes have been introduce with a view to further expansion
More than 10,000 tonnes of sugar were consumed towards the manufacture of non-alcoholic drinks.
A further 1,750 tonnes of sorghum was used in the production of its affordable Eagle lager, with a direct impact on 3,500 households in the year to March 31, 2015.
From 2015, the company introduced cassava into its Eagle lager formula. It is now developing an end-to-end supply chain supporting small-scale farmers in Northern and Luapula provinces, and with innovative technology will deliver a high quality, affordable clear beer that will grow to become a leading brand within the company’s portfolio.
Zambia’s agriculture is on the rise and is changing many lives in various corners of the country.
As the Ministry of Agriculture rightfully acknowledged: ‘’Agriculture is the only sector that assuredly alleviates poverty in the country. The focus is to grow this industry that is the future of the country.’’
Marshal Papworth has teamed up with Moulton College in Northampton to further develop its work in building sustainable farming skills in communities in sub-Saharan Africa. The Charity, which works with lead farmers and agricultural extension officers from Africa to advance their knowledge and practical skills, will partner with Moulton College, one of the UK’s leading agricultural colleges, to deliver a tailored 10 week, full time course.
The annual course will welcome students from across the developing world – including Ghana, Malawi and Uganda – to the UK to work towards a BTEC Certificate in Agriculture. The course will cover crop and livestock management, business management, animal and plant husbandry, farm mechanisation and technology, and basic IT skills, alongside a schedule of enrichment and cultural visits which support the Marshal Papworth programme.
Tom Arthey, Marshal Papworth Chairman, commented: “Since conception, Marshal Papworth has provided scholarships to students from developing countries which enable them to come to the UK and study at some of the top agricultural and horticultural institutions here. This new partnership reinforces the Charity’s commitment to providing students with the best opportunities to build their skills for the benefit of their communities.”
Moulton College has also created a fellowship programme which will link each visiting students with a full-time student at the college to ensure they settle into the college easily and take full advantage of the opportunities available to them.
Steve Davies, Principal of Moulton College said: “I am delighted that we have forged this collaboration with Marshal Papworth who are doing exceptional charity work in sub-Saharan Africa. We very much look forward to welcoming the students to Moulton.”
Maria is a PhD student at the University of Pavia (Italy) and an early stage researcher in the Marie Curie initial training network NASSTEC (Native Seed Science, Technology and Conservation http://www.nasstec.eu/). Maria is based at Scotia Seeds (Scotland) and her project is aimed at improving seed quality in large- scale production of native seed.
During the 31st ISTA Congress in Tallinn, Estonia (June 14- 21), she gave a poster presentation titled: “Development of tests for seed quality in native seeds used in habitat restoration” . The objectives of the study were to assess seed quality on the EU native seed market, to develop protocols to determine conditions for dormancy breaking and germination and t o identify new approaches to seed quality evaluation in native species. Maria Marin, Scotia Seeds firstname.lastname@example.org
ARTICLE 2, SPOTLIGHT ON:
Early stage researcher,
31 years old, Croatia
Hi Maria, How and when did you first learn about ISTA?
As soon as I started my post at Scotia Seeds I was introduced to ISTA by my colleagues. ISTA’s International Rules for Seed Testing and working sheets were fundamental to my work.
How is ISTA concretely helping you in your daily job?
I use ISTA’s protocols for seed testing, where available for certain plant families, as a reference for the development of testing protocols for native species.
How do you keep in touch with ISTA work? With ISTA community?
At Scotia Seeds we are subscribed to the ISTA news bulletin Seed Testing International. Recently I have joined the ISTA Flower Seed Testing Committee and I am therefore involved in the committee’s activities and future plans.
Why did you decide to attend the ISTA Congress in Tallinn last June?
I feel that my work is closely related with ISTA’s activities, particularly now that the Association is widening its scope to include native species so I thought that participating to the event was the best way to introduce my work and make valuable contacts. Also, I was very interested in the topics presented at the ISTA Seed Symposium.
What are your main takeaways from this event?
I received great feedback on my work and was pleased to know that native seed science and restoration related topics are starting to be represented within ISTA. It was also very useful to expand my horizons beyond native species and familiarize with the seed industry and seed testing laboratories.
This event gave me also the opportunity to deal with some practical aspects of seed science and to understand the importance of applied research, while also creating a network of valuable contacts.
Were you able to make some useful connections for your work during the Congress?
Yes! I had the pleasure to meet different people and establish fruitful relationships for the future.
Would you recommend students and young researchers to attend similar events?
Sure, I think that it is very important for young researchers to get involved with ISTA and participate to these events in order to understand the needs of the field they are working in and share their findings with stakeholders.
How does it feel to be part of an ISTA Technical Committee?
I have recently joined the ISTA Flower Seed Testing Committee and I am very enthusiastic about it. I feel privileged to have joined this working group and hope to make valuable contributions to it.
If ISTA should change/improve one thing, what would it be?
If not yet in place I would suggest to establish a fund to allow students to participate to ISTA events.
What is your vision for future in seed testing?
Currently there is a lack of knowledge on native seed testing and there is no established route for access to this knowledge for producers. Therefore, future work should focus on developing standardised seed testing methods for native species and delivering them to seed producers.
How about your own future?
I am focused on delivering the requirements for my PhD and NASSTEC project, while also beginning to imagine the future beyond it.
Maria, one last word?
It was great taking part to the ISTA Seed Symposium, thank you! I am looking forward to the next
On December 23, 2015 the Moscow Exchange Group
launched on-exchange grain trading with integrated
commodity delivery service.
By Alex Hitzemann
This year, Russia overtook the United States as the world’s number one grain exporter. Bloomberg Businessweek dramatically announced “America is losing the Wheat Wars” due to rising competition and currency fluctuations.
The Black Sea region has always been the primary source for grain imported into North Africa, but only recently Russia has been exporting more and more grain to Central Africa, countries that were traditionally customers of the US and Australia. Demand for grain in central Africa is at an all-time high, and is predicted to more than double in the next ten years.
Russia’s success in this region can be attributed to a variety of factors. The plummeting Ruble has created an economic environment more favorable for Russian exports. Agribusinessmen also point to factors such as: climate change, increases in agriculture technology, a supportive government subsidy system, and good luck.
MOEX: A ‘Big League” Trading Platform & Delivery Service
Behind the scenes of these surging exports, Russia has a shiny new trading platform that’s moving grain from fields to export markets with world class technology and efficiency. Africa Agribusiness Magazine was able to sit down with some of the leaders of MOEX’s grain trading platform to learn more about their system and plans for the future.
MOEX, the Moscow Exchange, is the largest exchange group in Russia, operating trading markets in currencies, equities, bonds, derivatives, and commodities. In December 2015, MOEX launched an innovative and advanced on-exchange grain trading platform with an integrated commodity delivery service.
MOEX has partnered with “National Logistics Company” (a specially founded entity) to provide grain transportation to any railway station in the Russian Federation. This partnership allows MOEX to ensure grain quality throughout transportation and grain elevator loading process. Storage and transportation risks are insured and re-insured under acting insurance agreements.
All of MOEX’s grain elevators must be vetted in order to insure if they are up to high standards. During the vetting process inspectors insure that the elevators are well maintained and have proper financial conditions. It’s also important that each site can test the incoming grain for protein and other quality indicators – the location must also have stable management. Basically, they make sure there are no warning signs of a possible interruption of service and all possible hazards to grain in storage are adequately assessed and approached.
Due to this complex process, as of September 2016 only seventeen elevators have been approved. However, MOEX anticipates more than 50 elevators by next year and the number should exceed 100 in the not so distant future. The leaders of MOEX see this as just the beginning. Grain farming in Russia has huge potential for export and trading. Russia has large amounts of arable land. However, one of the biggest constraints is currently infrastructure.
Portions of the country, especially remote regions have limited access to railroads. A number оf grain elevators were built some decades ago and need to be renovated. This infrastructure would need to be improved before being integrated into MOEX’s system.
The strict standards by which MOEX vets potential elevators provides incentives for elevators across the country to improve. Elevators in their network can expect a wide range of advantages. Once accredited, elevators can expect to gain additional income from increased grain storage and turnover volumes originating from grain market trades by NAMEX trading members. Also elevators become engaged into direct agreements with a systemically important financial institution, NCC Bank. NCC Bank is responsible for clearing trades and serving operations for more than a half of Russia’s financial market participants, including the Central Bank of Russia – which guarantees a high degree of trust in the exchange infrastructure.
Additional advantages for MOEX elevators include access to an online commodities record system. Elevators will also benefit from MOEX’s PR, an increase in competitiveness, a confirmation of their professionalism and more stability in their work with exchange trading, financial and insurance companies.
The MOEX exchange can be a good example for future African exchanges that seek to develop their own trading platforms. While not entirely the same, some of the challenges in Russia are similar to Sub-Saharan African countries. Russian agriculture went through a severe decline in the 1990’s after the fall of the Soviet Union. However, during the last 10 years gradual improvements have been made. Family farms are growing larger and corporate farming operations are becoming more common as agribusiness develops. Many parts of the country have seen tremendous infrastructure improvements. All of this has been catalyzed by a cooperative political climate in Russia, dedicated to agribusiness growth.
From Black Sea Ports to African Homes
From the fields near the Black Sea to African consumers, Russian grain goes through a long journey to reach Africa. From local grain storage and elevators near farms, grain is usually first transported by trucks to major transportation hubs. In southern Russia and areas near Moscow the road and grain storage systems tend to be quite modern. But further North and East, significant improvements could be made to increase Russia’s export potential. The grain is then loaded onto trains bound for the Black Sea.
For African exports, grains usually depart from Russia’s major trade ports on the Black Sea such as Novorossiysk. The grain is then loaded onto boats headed for ports in Africa. The cargo goes through the Turkish straights into the Mediterranean Sea and then to its destination in countries such as Egypt, Yemen, South Africa and Kenya. From these major ports Russian grain is distributed across Africa.
Opportunities for the Future
Analysts, such as Rabobank, predict that Sub-Saharan Africa will eclipse North Africa’s grain demand by 2025 presenting a significant opportunity for grain suppliers.
“Structural differences exist between the regions, and while North Africa has the highest per capita consumption and a saturated market, Sub Saharan Africa has much smaller per capita consumption with higher potential, coupled with stronger population growth,” said Rabobank grains & oilseeds analyst Vito Martielli.
Africa currently accounts for nearly 30% of world-wide grain imports and the demand is still growing. Increasing, almost 4% every year since 2001. In sub-Saharan countries grain imports will rise 50% in ten years. Comparatively, North Africa will only see a 15% rise.
“After the training, I realized that I had taken for granted my livestock over the years. If only I knew some of the things I know now, I would have benefited a lot from my livestock then.”
FFS Facilitator, K-SALES Project
Francis Mwika, Mugae Location, Meru County, Kenya
Located on the eastern side of Meru County, Mugae location is characterized by a sparse population with low and erratic rainfall resulting in an increase in food insecurity, environmental degradation and poverty levels in the county. Massive wind storms carry away the soil from the bare land making agriculture a debatable investment. This however, is home to Francis Mwika, a 47-year-old livestock farmer. Mwika has witnessed crop failures and droughts over the years. He has had to find a way to mitigate the drought effects for the wellbeing of his family of one wife and eight children. He resorted to livestock farming as a source of income. The amount he earned from his sales was used to pay school fees for his children and provide basic household needs, leaving little, if any, for savings. He had not realized the full potential of livestock farming as a business up until he was selected to be a facilitator for Farmer Field Schools (FFSs).
With funding from the U.S. Department of Agriculture, Mwika received training as a FFSs facilitator through the Kenya Semi-Arid Enhancement Support (K-SALES) project. The four-year project, implemented by Land O’Lakes International Development, seeks to increase agricultural productivity and expand trade in livestock products. Through K-SALES, Mwika was equipped with the necessary knowledge to train other farmers in the FFSs on farm management and improved livestock production techniques. Mwika has formed and trained over 10 FFSs in his area comprising of 384 farmers.
“After the training, I realized that I had taken for granted my livestock over the years. If only I knew some of the things I know now, I would have benefited a lot from my livestock then,” he says. As luck would have it, Mwika, had a chance to invest in his livestock for business. “I had to make some changes in my own home on how I reared my livestock in order to set an example to the farmers I trained.”
Mwika is one of the 150 farmers benefiting from Maji ya Chumvi spraying and vaccination crush, which is less than 2km away and was constructed by K-SALES. “Before the training, we never used to spray or vaccinate our animals unless they fell sick. We are very grateful for the crush constructed by K-SALES for our community, as we can now spray and vaccinate our animals regularly with ease.” Currently, Mwika sprays his livestock at least thrice every month and noted the minimized illnesses brought about by pests and diseases.
He has embraced several lessons to help improve his livestock in terms of breeding. Last year, in order to upgrade his own local sheep, he bought an improved sheep breed, a dorper, which is hardy, fertile and fast-growing. The ewe has since given birth to lambs that are growing rather fast and fetching a higher price at the market. “Just last month, I fetched 3,000 shillings for a one-month-old lamb,” he stated. From these sales, Mwika has since acknowledged that livestock rearing is indeed rewarding, and he plans to increase the number of sheep he owns, adding that they can reproduce as often as three times in a year.
With the dry season around the corner, Mwika has plans to pursue fodder storage as a business especially now that there is a looming food shortage in his area. He had recently stashed fodder for his own animals, but he sold it to another livestock farmer. “I knew fodder could earn me an income but not this much,” he says. “The quantity of the fodder wasn’t much but the buyer surprisingly paid 20,000 shillings for it. I was amazed, and that is when I realized there is a lot of potential in the hay business.” He also received training on financial literacy and plans to borrow a loan from Centenary Sacco, where he is an active member, to enable him to construct a proper hay barn to store his hay for sale.
Mwika is one fortunate farmer that is headed in the right direction. However, not many people in Kenya are as fortunate as Mwika. They lack access to the required information to scale up from subsistence farming to commercial farming. By providing the required knowledge in improved livestock production techniques and technologies, more farmers can see the benefits of keeping livestock as a business venture.
This story is brought to you by USDA and Land O’Lakes
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A farmer walks through his field. Sugar cane yields and sucrose in cane are expected to remain relatively unchanged in the 2016/17 production season.
By Nawa Mutumweno
Zambia Sugar Company is reducing its sugar exports into the European Union (EU) to the regional market in view of the sugar reforms in the bloc to be effected in September 2017.
The agribusiness company will this year reduce sales to the EU from 22 percent to 14 percent as it explores Africa’s regional markets, both traditional and new markets.
According to managing director, Rebecca Katowa, this follows the sugar reforms that have impacted on the sugar regime and resulted in prices in the EU converging into global prices.
The prices are below the cost of production and reflect residual markets and key players, namely Brazil, Thailand and India, who put sugar on that market with India’s sugar being subsidized.
’’The strategy is to move volumes away from the EU to regional markets because the regional market provides valuable alternatives. Shifting export sales away from the EU to the region is expected because realisations in these markets will continue to be influenced by exchange rate movements,’’ she elaborated at a stakeholders’ breakfast meeting in Lusaka recently.
The prices of sugar are expected to remain above world levels within the region despite increasing levels of competition among regional producers, Mrs. Katowa added.
The company is looking to expanding exports to the Great Lakes region and the Democratic Republic of Congo (DRC), among other African markets.
Meanwhile, Zambia Sugar will this month-end commission the over K500 million refinery which is projected to more than double sugar production to 90 000 tonnes annually, reaffirming the firm’s position as the largest producer in Africa.
Currently, the sugar agribusiness company produces 40 000 tonnes of sugar per annum.
‘’The project was launched last year and will be on stream at the end of the month and contribute to our growth strategy,’’ she said.
Meanwhile, the company’s Commentary for the Year Ended March 31, 2016 says a number of factors impacted adversely on sugar production in the period under review. These included dry climatic conditions in November and December 2015, power interruptions to irrigation and the outbreak of yellow sugarcane aphids which reduced sugarcane yields by 11 percent across the entire harvest area.
This yield decline was partly offset by a 2 percent increase in area under cane delivered. Smallholder schemes supplied 10 percent of the total 3.102 million tons of cane crushed by the Nakambala mill. Consequently, sugar made was reduced by 10 percent from 424 000 tonnes achieved last year to 380 400 tonnes.
‘’The reduced sucrose in cane was partially offset by improved sugar recoveries in the mill. Refined sugar production also increased to meet growing demand. The season saw a significant improvement in factory throughput, reflecting the benefit of improved equipment reliability and preventive maintenance practices together with a sustained focus on continuous improvement initiatives,’’ the Commentary reads in part.
Total revenue grew by 6 percent year on year, from K1.91 billion to K2.02 billion, largely due to continued growth in the domestic market where direct consumption increased by 7 percent and industrial consumption grew by 4 percent. In order to maximize revenues from reduced production, the sales mix was adjusted by reducing bulk EU exports by 45 percent. The remaining sugar was sold into Africa’s regional markets where prices remained under pressure from world market sugar.
The factory commenced crushing in the third week of April and operations have quickly stabilized. Early season, sugarcane yields are at expected levels and should improve as the crop matures.
Sugar cane yields and sucrose in cane are expected to remain relatively unchanged in the 2016/17 production season. The crop has been negatively affected by drought conditions, power shortages, the low water levels in the Kafue River and pest infestations due to drought stressed cane. Production is, therefore, expected to match the previous season.
Sugar production is, therefore, expected to match the previous season. Reasonably strong growth is expected in the local market. However, margins in the regional export markets are expected to remain under pressure from surplus sugar stocks on the world market.
‘’Realizations in these export markets will continue to be influenced by exchange rate movements. The new expanded sugar refinery will help the company take advantage of the growth in the local and regional industrial sugar markets,’’ it adds.
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