Archive for December, 2011
World coffee supplies down slightly
Global coffee production will fall slightly as bad growing conditions in several major producing nations outweigh higher-than-average crops in some others.
World coffee production for the 2010-11 growing season is estimated to be 127.4 million 60-kilogram bags, a downward revision from September’s forecast of 129.5 million, according to the International Coffee Organization. Spot prices for Robusta coffee have been edging upward since hitting a yearly low in October, hovering around $2.70 a pound by late November.
Conditions in several countries are affecting prices:
• Shipments from Brazil, the global leader in coffee exports, in November was 3 million bags, down about 6 percent from November 2010. October shipments were 3.09 million bags, down 16 percent from October 2010. A heavy frost in Brazil is said to have the potential to affect production next year.
• Colombia, the world’s leading supplier of high-end Arabica beans, will fall below production targets for the third consecutive year due to heavy rains. Production is estimated at 8 million bags, 1 million less than the goal, according to the head of the nation’s coffee growers’ federation.
• Output in Guatemala, Central America’s second-largest producer, will fall almost 9 percent, to 3.6 million bags, also due to rains. El Salvador’s production will fall more than 21 percent, to 1.45 million bags.
• In Vietnam, the world’s leading exporter of Robusta beans, output is predicted to be 18.5 million bags, a drop of 5.4 percent.
Tanzania, a major supplier of Arabica beans, is expected to produce 45,000 tons of coffee this growing season , a drop of 20 percent from last year.
• On the other hand, favorable weather is expected to boost yields elsewhere in Africa. The Ethiopian crop is predicted to increase 27 percent to 6.35 million bags, while Ivory Coast’s coffee crop is forecast to surge 60 percent, to 1.6 million bags.
It’s unclear to what extent current coffee prices are related to supply. Industry observers have suggested that volatility in commodities futures markets are at least partly to blame for price fluctuations.
Source: Specialty Coffee
Russia under African Sky
By Lada Korotun
In a sign that Moscow starts restoring its African clout, a major Russian-African business forum kicks off in Ethiopia on December 16. Mikhail Margelov, the Russian President’s special envoy to African countries, has already described the Russia-Africa international forum as an African Davos.
The Ethiopian capital, Addis Ababa is currently in the highlight of the Russian-African economic cooperation. Symbolically, it is Ethiopia, one of the world’s most ancient countries, that became a starting point for the revival of these business ties. A motherland of ancestors of great Russian poet Alexander Pushkin, Ethiopia is also one of the most ancient Christian countries in the world. It is a country that has a 200-year history of diplomatic relations with Russia. Generally speaking, Russia and Africa have always had much in common. In the Soviet era, the USSR lent support to African people’s fight against colonialism. Our countries jointly developed natural resources, built energy facilities and enhanced educational cooperation at the time. Right now, Moscow is interested in restoring its position in Africa. In this regard, the Russia-Africa forum paves the way for a fresh format of the Russian-African collaboration, Margelov says.
“In the 1990s, we mostly dealt with domestic affairs without paying much attention to developing bilateral partnership, Margelov says. Now the time is ripe for our major companies and bank to return to Africa and start mending bilateral business ties,” he concludes.
Taking part in the business forum are representatives of leading Russian energy, mining, transportation, construction and financial companies. Also in attendance are officials from Chad, Mali, Sudan, Ethiopia and other African nations which experts say is only natural given that Africa is seen by many as a budding investment project. Road infrastructure is yet to be created there, experts explain, also citing the energy deficit on the African continent. In the past few years, oil production has increased significantly in Africa where more pipelines are expected to be constructed with the help of Russian technicians in the future. African countries are an attractive sales market for Russian production, including cars, combine harvesters, hydroelectric stations and nuclear power plants, according to Andrei Davydov, a spokesman for the Russian energy company Tekhnopromexport.
“We hope that Russia’s presence on what we see as the emerging African market will grow with every passing year, Davydov says. Earlier this month, Tekhnopromexport successfully finalized the construction of the Kapanda hydroelectric plant in Angola. At the moment, he adds, we are mulling our participation in an array of energy projects in Ethiopia, Djibouti, Uganda, Botswana, South Africa and Namibia.”
The past decade saw a fresh impetus given to investment projects in the oil-and-gas sector in Africa, where the main focus was previously placed on developing diamond and iron ore mines.
Russian Prime Minister Vladimir Putin visited Morocco and South Africa in 2006, in a visit that local press touted as the “most outstanding event in Russian-African relations since the collapse of the Soviet Union.” In 2009, Russian President Dmitry Medvedev paid an official visit to the African countries south of Sahara. These visits contributed greatly to the development of the Russian-African ties, experts say, praising the Russia-Africa forum as another move to step up Russia’s presence on the African continent.
Ethiopian Illicit Outflows Doubled In 2009, New Report Says
By Christopher Matthews
Ethiopia lost $11.7 billion to outflows of ill-gotten gains between 2000 and 2009, according to a coming report by Global Financial Integrity.
That’s a lot of money to lose to corruption for a country that has a per-capita GDP of just $365. In 2009, illicit money leaving the country totaled $3.26 billion, double the amount in each of the two previous years. The capital flight is also disturbing because the country received $829 million in development aid in 2008.
According to GFI economist Sarah Freitas, who co-authored the report, corruption, kickbacks and bribery accounted for the vast majority of the increase in illicit outflows.
“The scope of Ethiopia’s capital flight is so severe that our conservative US$3.26 billion estimate greatly exceeds the US$2 billion value of Ethiopia’s total exports in 2009,” Freitas wrote in a blog post on the website of the Task Force on Financial Integrity and Economic Development.
The report, titled “Illicit Financial Flows from Developing Countries over the Decade Ending 2009,” drew on data from the World Bank and the International Monetary Fund on external debt and trade mis-pricing to calculate illicit capital leakage. The study, which will be released later this month, measures the illicit financial flows out of 160 different developing nations.
Ethiopia is one of the poorest countries on earth as 38.9% of Ethiopians live in poverty, and life expectancy in 2009 was just 58 years.
“The people of Ethiopia are being bled dry,” Freitas wrote. “No matter how hard they try to fight their way out of absolute destitution and poverty, they will be swimming upstream against the current of illicit capital leakage.” Read more about this news here: http://www.gfintegrity.org/
Source: Wallstreet
Ethiopian Billionaire’s Cement Plant to Start Output This Month
By William Davison
Dec. 5 (Bloomberg) — Derba MIDROC Cement Plc, Ethiopia’s biggest cement factory, said it will start production within the “next 10 days,” helping end a shortage of the building material in Africa’s fourth-largest economy.
The $351 million plant, about 70 kilometers (44 miles) northwest of the capital, Addis Ababa, will produce 8,000 metric tons of the building material daily by February, said Chief Executive Officer Haile Assegide. Derba is part of the MIDROC Ethiopia group owned by Mohammed al-Amoudi, an Ethiopian-born Saudi Arabian billionaire who is one of the biggest investors in the Horn of Africa nation.
Once output begins, Ethiopia “will be self-sufficient for the coming two to three years” in cement, Haile said in an interview at the site on Dec. 1.
Ethiopia, a net importer of cement, plans to boost output ten-fold by mid-2015 to 27 million tons, according to the government. The Derba plant will add 2.5 million tons per year, while expansions to Mesobo Building Materials Production Plc, owned by the country’s ruling party, and state-owned Mugher Cement Enterprise will add another 1 million, it said.
Dangote Cement Plc, Nigeria’s biggest company by market value, said in October it plans to invest $400 million in an Ethiopian factory with the capacity to produce 1.5 million tons per year.
Derba Cement, built by China National Building Material Co., may earn more than 2 billion birr ($115.9 million) annually, Project Manager Tadesse Kebede said in an interview at the site. “If everything goes well it will be a cash cow,” he said.
Loans
Al-Amoudi’s company invested $100 million in the operation, with the European Investment Bank, the African Development Bank, the International Finance Corp. and the Development Bank of Ethiopia providing the rest of the funds.
The project was delayed for “almost one year” because obtaining the loans took longer than expected, Tadesse said. “To work with multilateral banks is very difficult,” he said.
The factory, which took 3 1/2 years to complete, will require as much as 60 megawatts of electricity from the national grid, Haile said. The company paid for transmission lines and a sub-station to power the plant, according to Haile.
–Editors: Paul Richardson, Ana Monteiro.
To contact the reporter on this story: William Davison in Addis Ababa via Nairobi at pmrichardson@bloomberg.net.
To contact the editor responsible for this story: Paul Richardson in Nairobi at pmrichardson@bloomberg.net.
