Rice Is King In West and Central Africa

flatbed-truck-parboiled-rice

Outside of Asia, rice is as big a part of diets in west and central Africa as in any region of the world. Though cultivated for over 2,000 years in the Niger River floodplains, local rice production decades ago ceased to keep pace with the rapidly increasing consumption of burgeoning urban populations. Consequently, the 20 or so mostly coastal countries extending from arid and sparsely populated Mauritania to lushly forested Congo and anchored by regional giant Nigeria now account for more than a quarter of global rice trade.

Roughly 12 million tonnes gets imported, complementing local output approaching the same amount.

Collectively, and in most cases individually, the countries of the vast region have sufficient arable land and water resources to be self-sufficient and even generate large surpluses for export. Consequently, the majority of governments have adopted policies to speed the transition from subsistence rice farming to commercial production. However creation of a value chain that can competitively supply domestic rice to city dwellers accustomed to high quality, low cost, attractively packaged imported products is fraught with challenges.

flatbed-truck-parboiled-rice

A flatbed truck hauls 30 tonnes of parboiled rice in 50 kg bags out of the Port of Conakry in Guinea after being loaded directly from a break bulk vessel carrying 20,000 tonnes. Photos by David McKee.

One of the biggest is how to attract long-term investment in farming, in land storage and processing from food companies who are accustomed to less risky, short-term trading.

In a number of the larger countries, some success is already notable with domestic production expanding while imports level off or even decline.

The picture is highly variegated from country to country and even within them.

NIGERIA AND BENIN

Nigeria’s 180 million people are estimated to consume nearly 6 million tonnes of rice per year. Just over half, or about 3.1 million tonnes, is imported despite a tariff of 70%.

In practice, very little of the foreign rice is subject to such a high duty. According to International Grains Council data, over half of imports in 2015 entered from neighboring Benin where the duty on rice is only 12%. Most of Benin’s rice imports, up to 30,000 truckloads per year, are routed via transit shipments through Niger to the northwest of Nigeria.

Since Nigeria consumes parboiled rice exclusively, but Benin prefers white rice, it is easy to deduce that the 85% share of Benin imports that are parboiled are bound for Nigeria through the orchestrations of clever traders.

Nigeria’s overseas rice purchases are highly concentrated among just a few major trading houses. According to one top importer, about 60% comes in bulk vessels from the three largest rice re-processors in Thailand with bagging at the Nigerian ports. The remaining 40% is vessel loads of break bulk bagged rice originating in southeastern or northwestern India.

Starting a few years ago, the Nigerian government has allowed these companies to pay only 30% import duty if they invest in domestic milling capacity. As a result, the small group of companies that accounts for most imports also owns a major share of the modern milling capacity.

The challenge that they and other value chain investors now face is procuring or producing enough rice to keep these mills operating.

The Rice Processors Association of Nigeria has 22 member companies who lobby the government to maintain import duties and rein in illegal shipments from Benin.

Stallion Group, a pan-African trading house headquartered in Dubai, is Nigeria’s largest rice – and automobile– importer. Amit Rai, Stallion’s chief of domestic rice operations, reports the company has also made the largest investment in domestic rice milling with capacity of 430,000 tonnes per year in three locations. The company is buying from 300 rice cooperatives and another 8,000 to 9,000 farmers spread across 14 of Nigeria’s 36 states. Rice is grown in around 23 of them. Rai says the company is targeting 1.5 million tonnes of domestic rice milling capacity. Stallion Group is present in rice – and automobiles – in a number of West Africa countries, particularly Ghana.

MALI

Thanks to a sustained effort dating back the 1980s to develop land along the Niger River for irrigated cultivation, Mali has made the most progress of any country in West Africa toward self-sufficiency in rice.

Farmers now grow 1.4 million tonnes, mostly in the zone a few hundred kilometers west of Bamako, known as Office du Niger. Annual imports have declined to only 100,000 tonnes according to USDA estimates.

City dwellers now mainly consume local rice varieties that are preferred for their freshness and aroma.

Industry and government officials frequently state that the network of canals could be extended to increase irrigated rice area by several times to 1 million hectares. Double cropping and yield in-
creases thanks to new varieties and better fertilizer application could turn the country into a large surplus producer by the end of the decade with exports flowing from the landlocked country to its neighbors on three sides.

SENEGAL

Low-cost bulk shiploads of 100% and 50% broken rice from Brazil and Uruguay make up about three quarters of Senegal’s annual imports of 1.4 million tonnes. About 100,000 tonnes is re-exported. Large-scale irrigation schemes in the Senegal River valley shared with Mauritania on the northern bank have allowed national production to gain ground.

Average farm size is small at just one to two hectares but mechanized service providers help raise productivity through tractor tilling and combine harvesting for a fee.

Policy makers in Senegal have struggled to overcome the dichotomy of low cost, good quality foreign rice exclusively for urban consumers and poor quality, higher cost, domestic rice consigned to rural households.

Private sector investment in a number of modern mills in the northern rice production zone means that well-cleaned, sorted and graded domestic rice is now available, but production costs remain much higher than in major export origins.

In place of elevated import duties that only resulted in high volumes of smuggling via Gambia, the government is now requiring the 10 largest licensed rice importers to purchase the surplus domestic production based on their share of imports. If a company accounts for 10% of imports, it must buy 10% of the commercially available local rice at government-dictated prices for inclusion in their distribution channels.

There is a second rice production zone in the southwestern Casamence region of Senegal sandwiched between Gambia and Guinea Bissau. As in the neighboring countries, paddies are carved out of mangrove swamps and long-handled wooden hoes are used to laboriously turn the earth in a subsistence farm economy with little mechanization.

IVORY COAST

Cote d’Ivoire’s success as one of the world’s leading exporters of cashews and cocoa has retarded its development as a rice producer despite optimal growing conditions for the cereal. Subsistence farming of rice is widely practiced in all corners of the country but for cash crops, farmers prefer the more lucrative cultivation of export commodities.

A handful of major food companies import 1 million tonnes of mostly high quality rice from a wide range of origins for the sophisticated consumers of Abidjan. Long grain Thai and Vietnamese varieties are preferred with perfumed rice gaining share.

Since 2012, the Ivorian government has been engaging in a state planning exercise in order to bolster domestic production. The country has been divided into 10 zones that are being grant-
ed as concessions to private operators. These include the largest rice importers as well as some foreign investors. Each concessionaire will have a semi-exclusive right to install industrial rice mills in its zone and procure from local farmers. Currently there is only one large industrial mill operating.

The Ministry of Agriculture’s ONDR is also reportedly managing a scheme to import 30 rice mills from India with financing from India’s Ex-Im Bank. Private sector players complain that excessive intervention creates uncertainty in the sector that hinders them from going ahead with investment plans.

GHANA

In neighboring English-speaking Ghana, where the business environment is much more laisser-faire, one domestic business group, Avnash Industries Ghana Ltd., is now building one of the largest industrial rice mills on the continent. The Bühler-equipped mill located in the center of the country will have capacity of 500 tonnes paddy per day. The company is also launching a palm oil refinery in the Port of Tema.

The challenge, according to rice mill general manager Sheeva Avnash, will be to secure enough local rice to keep the mill turning.

Timing for the venture may be good, given the 40% devaluation of the Ghanaian currency that accompanied the crash in petroleum prices. Some importers took big FX-related losses and incoming volumes have dropped by 30% year on year. Locally grown product should make inroads in urban markets.

Ghana is another country where parboiled rice is important. It is the only place in West Africa where U.S. rice is eaten, but the major importers report that low global prices could mean no shipment from the Gulf of Mexico in the coming year.

Singapore-based Olam is one of the leading importers.

GUINEA, SIERRA LEONE AND LIBERIA

The three countries struck by the Ebola pandemic in late 2014 faced some risk of food shortages when ships carrying rice refused to discharge in their ports. Unaffected countries like Senegal were not allowing vessels that had called at countries affected by Ebola to pull into Dakar. Disruption in local transport of food compounded the problem even further.

In Liberia, where annual rice imports total 300,000 tonnes and local production is just 200,000 tonnes, the largest importer fortunately had 55,000 tonnes on hand at port warehouses when supply stopped. Stocks dipped to 11,000 tonnes, less than two weeks of import supply for the country of 4.5 million, before rice vessels began calling again. In all three of the water-abundant countries, rice is one of the main cereal crops grown by smallholders. Very little of their harvest reaches the major cities. It is either consumed by farm families or traded at the village level.

Large stocks of rice held in port warehouses by private importers are a key aspect of food security in Liberia and other countries of West Africa.

Large stocks of rice held in port warehouses by private importers are a key aspect of food security in Liberia and other countries of West Africa.

In Sierra Leone and Guinea, imports constitute less than 25% of total rice consumption. Guinea’s milled rice production of 1.2 million tonnes would only need to be expanded by one-third to eliminate the roughly 400,000 tonnes of imports and fully meet the needs of the 12 million citizens. Rural Guineans eat rice that they parboil and dry in the sun. There are almost no automated mills with parboiling and drying using husk-fueled boilers and furnaces as in India. A small coterie of private rice importers with import licenses benefit from low duties granted by government officials who fear the slightest rise in the price of a staple food could lead to mass demonstrations as happened in a number of West African countries in 2008.

GAMBIA AND GUINEA BISSAU

To give a boost to local output, Gambia’s autocratic government issued a decree in early 2015 stating that importation of rice would be banned starting in 2016. The country of less than 2 million imported 140,000 tonnes in 2014, while the domestic crop did not exceed 40,000 tonnes. Planting has been expanding at a steady but slow pace with much effort put into research and development of new varieties. The handful of companies controlling the trade say they will heed the ban but the result could be shortages, a big increase in smuggling, and a sharp spike in rice prices. The country’s only industrial rice mill, built in 2011, was never commissioned due to a fallout between the private business group and government partner in the joint venture.

In nearby Guinea Bissau, cashews are by far the largest cash crop. The principle exporters of the raw nuts are also the leading rice importers thanks to a long tradition in the former Portuguese colony of bartering rice for cashews in bush villages.

These days, the trade is more cash based, but the same companies have mostly retained control of both commodities. Like Senegal, the two small countries get the largest share of their rice from South America in 100% or 50% broken form arriving in bulk vessels and bagged at dockside during discharge. LD Commodities dominates the supply from South America to these countries and others in West Africa.

Original PDF article as appeared in the World Grain magazine.

Record Turnout In Dubai

More than 800 millers and exhibitors attend the annual IAOM Mideast & Africa Conference.

The IAOM Mideast and Africa annual conference and exposition, held Oct. 31-Nov. 3, returned to Dubai to begin its second quarter century as the region’s major platform for technical and business exchange in the milling industry. The commercially pulsating crossroads attracted a record number of over 800 registered millers and exhibitors from 60 countries for the three days of professional camaraderie and grain market and processing insights.

Organizers said 250 employees representing 130 milling companies were registered this year, marking notable progress in a key goal for the event and the 93 firms that occupied the sold out exposition space.

The forum’s content continued to reflect the rapid development of many countries into increasingly sophisticated consumer markets where there is growing demand for a greater range of packaged cereals-based foods as well as animal protein products.

Branding strategies, both personal and product oriented, were the topic of two of the management keynote speakers. They sought to provide answers to the question of how to differentiate and add value to wheat-flour based products that in much of the region are still perceived purely as a commodity.

Roy Loepp, IAOM president and Ali Habaj, regional director IAOM MEA, present an award of appreciation to Essa Al Ghurair for his quarter century of contribution to IAOM region. Emcee Rania Ali, a well-known Dubai television presenter, is seated.

Roy Loepp, IAOM president and Ali Habaj, regional director IAOM MEA, present an award of appreciation to Essa Al Ghurair for his quarter century of contribution to IAOM region. Emcee Rania Ali, a well-known Dubai television presenter, is seated.

Many Middle East and Africa wheat millers have been diversifying into animal feed production as growth in demand for eggs, broiler meat and other animal products accompanies dietary diversification resulting from increased incomes. After a successful side program on feed milling at the previous IAOM MEA in Cape Town, speakers addressing such questions as the most desirable particle sizes for maize in broiler feed were included in the main program.

Essa Al Ghurair, chairman of Al Ghurair Resources, the host of the event, opened the conference with a welcoming speech that laid out the program and innovations in the “mind sharing” and reminded the audience, “This industry touches rich and poor, young and old.” He suggested that millers continually ask themselves, “How can we be honest in what we do?” as suppliers of a key staple food.

MARKET OUTLOOKS

The highly anticipated presentations of crop and market conditions for the major wheat exporting regions were spread over two days. They painted a rosy picture of abundant wheat supply and low transportation costs for the short, medium and long term.

The results and projections for the Black Sea and the Baltic Sea were particularly significant for the grain-hungry countries of the Middle East. Hans Stoldt of Ameropa, a grain trader, boldly predicted wheat production and exports 10 years ahead to 2025-26 for the Black Sea region.

Based on a continuation of the steady yield and planting increases of recent years, he forecast that just five countries will ship 74.6 million tonnes of wheat primarily through the Bosphorus a decade from now, with Russia and Ukraine accounting for over 80%. That is a 65% increase over his estimate of 45.1 million tonnes in the 2015-16 marketing year. Since total exports of these countries, which also include Romania, Bulgaria and Serbia, have shot up from 1.4 million tonnes in 2000-01 to 39 million tonnes in 2014-15, this actually constitutes a significant slowing in the pace of growth.

The Baltic Sea region is also continuing its ascent as a major grain supply source, according to Indrek Aigro of Copenhagen Merchants, another grain trader.

Total wheat production in the eight countries has increased by over 60% since 1995 from 34 million tonnes to a repeat record of 55 million tonnes in 2015. Nearly all of this increase has become surplus available for export, given the slow rates of population growth in Germany, Poland, the three Scandinavian countries, and the three former Soviet Baltic states.

The latter will consume only 1.8 million tonnes of a record 6.8-milliontonne wheat harvest this year. The main challenge faced by shippers in the region is finding additional markets to absorb the 20 million tonnes on offer. Middle East and African countries, with annual wheat imports of nearly 70 million tonnes, are the main targets.

At the same time, as the former Soviet Bloc countries have developed into a major global supply source, a large part of U.S. wheat exports have shifted from the Middle East to other regions, according to Vincent Peterson, vice-president of overseas operations, U.S. Wheat Associates. From 1985-1990, the Middle East and North Africa took, on average, 30% of American wheat exports. Now the region accounts for just 3%. Latin America’s share has shot up from 10% to 40% of the average 25 million tonnes per year of U.S. export sales. This figure has changed little in the last 30 to 40 years.

Iranian millers, whose grinding capacity greatly exceeds domestic demand, are starting to target neighboring countries for flour exports. The chairman of GTC, Iran’s government wheat supply monopoly, stated in his presentation that exports of flour by Iranian millers to Afghanistan and Iraq could reach 1 million tonnes in the coming years, taking market share from millers in Pakistan, Kazakhstan and Turkey.

Iran’s strong contingent of milling companies is traditionally a bulwark of the IAOM MEA Conference. This year was no exception as over 30 mills were included in the 38 organizations providing 54 attendees from the country. The gradual lifting of economic sanctions means the millers have greater flexibility in equipment purchasing.

POSITIVE FEEDBACK

Exhibitors and attendees, both old and new, gave uniformly positive feedback on the conference. Copenhagen Grain Merchants’ Torben Christensen stated, “IAOM is a great conference and event where you meet existing as well as potential customers for the future.”

George Lasu, managing director of South Sudan’s only wheat mill, a 200-tonne-per-day plant being built in Juba by the Ramciel Multi-Purpose Cooperative Society, expressed his satisfaction, saying: “It was the first time for us to participate in the conference. It was very fruitful because we acquired a lot of knowledge and interacted with a lot of very experienced people in every field of milling. So we are very happy to be part of this association.”

Amer Ziyada, managing director of Millrite, Dubai, who has attended every year but one since the beginning, noted that the number of exhibitors this year was the largest he had seen.

But he added, “There should be more steps taken to increase the number of millers versus suppliers.” He suggested reducing the cost of the day pass to make the exhibition more accessible to mill staff. “When we started there were just 40 of us: 30 millers and 10 suppliers,” he said.

Another longtime participant, Nicolas Tsikhlakis, managing director of The Modern Flour Mills and Macaroni Co., Jordan, and member of the IAOM MEA Region Leadership Council, pointed out, “We had good representation of millers this year. It was a pretty balanced show with traders as well. Networking was very good.”

Seaboard Corporation senior trader Evert Ackorn called the IAOM conference “a fantastic forum for the industry to meet to discuss synergies, opportunities, and the challenges we face in an ever-changing operating environment.” He noted that his company “remains a strong advocate of these associations that provide a positive influence to millers.”

Anna Zenchuk, technical marketing manager of BioAnalyt, Germany, observed: “As a small, new company with an innovative product that simplifies measurement of Vitamin A and iron in flour, we valued the chance to speak for the first time at such a major gathering of millers.”

Another first-time participant, Steven Braco of RJ O’Brien, an independent Chicago, Illinois, U.S.-based futures commission merchant, said: “This event allowed me to interact informally with long-time clients and to better understand the risk management needs of major millers and the traders supplying them.”

REGIONAL FORUMS

To better meet the technical needs of milling professionals across the vast, culturally and economically diverse region, the IAOM MEA district this year began a series of regional milling forums. The first was staged in Nairobi in August, where 75 millers from 43 companies, including a large contingent from Ethiopia, were present for a workshop focused in part on aflatoxins in maize milling.

Ali Habaj, Oman Flour Mills CEO and IAOM MEA regional director, announced that, based on Nairobi’s resounding success, a second regional forum is planned for Algeria in 2016 where a few hundred small and medium millers comprise the bulk of the sector. It is to be IAOM’s first activity in the major wheat importing country.

IAOM MEA 2016 TO BE IN ETHIOPIA

The Dubai event concluded with the announcement of the selection for the first time of Addis Ababa, Ethiopia, sub-Saharan Africa’s de-facto political capital, as the site of the IAOM MEA Conference scheduled for October 2016. Ali Habaj observed that in a recent visit he was, “very impressed by the infrastructure and it is a fantastic market.”

Madame Abeba Tesfaye, vice-president of the Ethiopia Millers’ Association, accepted the nomination. Ethiopia’s population of 90 million is second in size after Nigeria in Africa. The country grows and consumes more cereals than all others below the Sahara. It ranks first in wheat production among them with around 3 million tonnes annually in addition to close to another million tonnes of yearly imports. There are between 200 and 300 milling companies in Ethiopia.

Many of the larger millers have been diversifying into pasta production. The annual crop of over 20 million tonnes of cereals, legumes and oilseeds still requires much in the way of improved storage and processing. Agricultural exports have boomed in recent years, underlying a high rate of annual GDP growth.

Original PDF article as appeared in the World Grain magazine.

Going from margin to mainstream

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Rice importation and production have been on the rise in eastern and southern Africa.

As a cereal crop and staple food, the place of rice has rapidly shifted in many countries of eastern and southern Africa from the margin to the mainstream. Both importation and local production of rice have been on the rise.

In rapidly developing Mozambique, high quality rice is now the preferred grain of the burgeoning urban middle class. Colorfully packaged Thai varieties occupy entire aisles of shelf space in gleaming new supermarkets of Maputo, Beira and Nampula, while maize meal dominates only in public markets.

Foreign firms, sometimes backed by their governments, have acquired vast tracts of farmland for creation of rice plantations. China and Vietnam are reported to each have 100,000-hectare grants in southern Mozambique.

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Rice harvesting at Agrica’s KPL farm in Tanzania’s Kilombero Valley 450 km from Dar es Salaam. Photo courtesy of Carter Coleman.

Among the geographically and culturally diverse countries from Khartoum to Cape Town, the two top rice producing countries are Madagascar and Tanzania with 2.5 million tonnes and 1.4 million tonnes, respectively.

The top importing country is easily South Africa with 1.1 million tonnes, thanks to its big economy and large numbers of urban consumers. Three other aspiring middle-income countries each buy about 500,000 tonnes per year from outside: Mozambique, Kenya and Angola.

In all of sub-Saharan Africa, only economic giant Nigeria tops Madagascar as a producer and South Africa as an importer. A few national and sub-regional snapshots serve to illustrate the enormous variety of the rice industry in this half of sub-Saharan Africa

MADAGASCAR

Among African countries, rice plays the biggest dietary and economic role in the giant Indian Ocean island where the 23 million people consume about 300 grams daily per capita.

Milled rice production of around 2.6 million tonnes is on a par with Nigeria and accounts for nearly 20% of all rice grown south of the Sahara. Imports of around 300,000 tonnes per year ensure variety and high quality packaged rice to city dwellers while cheaper varieties and grades help keep a lid on prices. Poor farmers grow the crop as much for subsistence as for cash.

MOZAMBIQUE

In an interview with World Grain, a top manager of a leading Mozambican food importer stated that rice imports have been increasing on a year-to-year basis by 5% to 7%. Maputo accounts for 60% of the country’s total rice imports, he estimated. The rising middle class overwhelmingly prefers rice to maize meal.

Large importers bring rice in 25-kg and 50-kg bags in break bulk vessels saving $7 or $8 per tonne over containerized shipments. Vessels sizes are mostly 5,000 to 15,000 tonnes but sometimes 30,000 tonnes.

“New players are coming into the trade. Traditional wholesalers have begun their own imports in containers with their own brands,” the industry insider added. “More and more traders are now getting into rice imports.”

He estimates there are more than 50 importers now, but the top five still have a 50% market share.

KPL has a 500 kW biomass gasification plant powering 600 tonnes per day capacity silo dryers. The six MFS/Stormor silos have a total of 4,800 tonnes storage capacity. Photo courtesy of Murray Dempsey

KPL has a 500 kW biomass gasification plant powering 600 tonnes per day capacity silo dryers. The six MFS/Stormor silos have a total of 4,800 tonnes storage capacity. Photo courtesy of Murray Dempsey

In Maputo, 80% of the imported rice is from Thailand. It is almost all 5% broken, but just 10 to 15 years ago the standard grade was 25% broken, before shifting to 15% broken.

In the less prosperous center and north, the standard is still 15% broken. The share of 25% broken is now very small. There is also more Pakistan and Indian origin rice in the Beira and Nacala corridors. Basmati rice is a small but growing share of the market.

Local rice is a sweet, long grain. Production is increasing in the rain-fed southern zone where it does well and now accounts for about one third of total consumption that stands at 750,000 tonnes. Some high quality domestic rice is also available in Maputo supermarkets from various rice millers in the south.

TANZANIA

“In a good year, Tanzania is self-sufficient in rice production,” said Carter Coleman, CEO of U.K.-based Agrica Ltd, operator of a large commercial rice farm in Tanzania. He maintains that exports to neighboring Uganda, Rwanda and Burundi, all members of the EAC as well as to eastern and southern DRC, can exceed volumes of low-cost rice coming in from Asia.

Much of the incoming rice is smuggled via Zanzibar. The Tanzanian island has a special status in the EAC and is allowed to impose only a 12% duty on rice. Four or five companies bring rice legally to the island where it is rebagged and transported along the coast to small “pirate” or “dhow” ports as the local media calls them. Official data have shown Zanzibar with by far the largest per capita rice consumption in the world.

Coleman, who is also vice-chairman of the Rice Council of Tanzania, thinks that the 75% EAC import duty will be needed for some time. The Rice Council has issued a position paper that says East Africa is decades away from competing with Asian exporters of rice on a cost basis.

“Farming is rocket science and farming in Africa is like farming on Mars. You must be totally self-sufficient. You need 1.5 times the number of tractors and combines because parts are not readily available.”

Rice production in Tanzania is in four main zones including the Tsonga River Valley in the south and Arusha/Moshi area near Mount Kilimanjaro in the north.

Production is a mixture of corporate farms and smallholders. ETG’s Kapunga farm with 3,000 hectares irrigated via a 12-km canal from the Ruaha River near the Malawi border is one of the largest. It was a Japanese government project in the 1970s and was only privatized eight years ago.

Coleman remains optimistic about better government control over smuggling thanks in part to the media campaign of the Rice Council supported by its 350,000 smallholder members. Agrica’s Tanzanian farm has plans to install center pivots to increase irrigated area from 1,445 hectares to 3,037 hectares with cropping during both the rainy and dry seasons.

Small farmers have been benefiting from introduction of new varieties and better agronomic practices. In the past, rice was sown by broadcasting. Now more transplanting is being introduced. New varieties include hybrids and aromatic varieties related to basmati.

OTHER EAC

Elsewhere in the Great Lakes Region, rice has a long history as a cash crop in certain well defined areas with irrigation schemes such as the Ruzizi Plain between Lake Kivu and Lake Tangayika, straddling Burundi and South Kivu province of the Democratic Republic of Congo (DRC) as well as in Uganda on the flood plain below Mount Elgon near the southeastern border with Kenya.

Internationally funded projects carried out decades ago built dams and canals and leveled land in these areas and the local population was introduced to rice cultivation.

Indian rice producer Tilde has invested in rice farming and milling in Uganda, focusing on the basmati varieties it is known for.

In Rwanda, there has been a recent push to carve rice paddies out of the bottom of narrow river valleys throughout the country, but yields in some rain-fed highland areas can reach six tonnes per hectare.

A multitude of donors have funded projects to introduce improved seed varieties, fertilizers, mechanized farming implements, and better drying and storage facilities. The results are often mixed but progress has been made. In Bukavu, the largest city in South Kivu, the Heineken-owned Bralima brewery sources locally from the Ruzizi Plain nearly all of its rice used as an adjunct. It was still importing rice from Asia several years ago and its need has increased as beer consumption has risen sharply. In remoter parts of DRC, such as the interior of South Kivu province, rice is an important rain-fed, subsistence crop that is hand sown, manually harvested and husked. Yields rarely exceed one tonne per hectare. Kenya’s rice imports are large because it has negotiated an exemption to the EAC common external tariff that allows Pakistan rice to come in with a 35% duty in reciprocity for special treatment of Kenya’s tea exports to Pakistan.

SOUTHERN AFRICA

In South Africa, imported rice consumption mainly by middle and highincome groups in large cities has more than doubled to 1.1 million tonnes from 523,000 tonnes in 2000. Diversified food majors like Tiger Foods import and package rice under their house brands. Still, the per capita consumption figure is low among the 55-million population as maize meal remains the main staple among most groups.

The pattern is similar in other large countries like Zimbabwe and Zambia.

Oil rich, highly urbanized and food import dependent Angola has seen foreign rice consumption increase by a factor of seven in a span of 10 years from 65,000 tonnes to 450,000 tonnes.

HORN OF AFRICA

Imported rice and pasta are traditional food staples accompanying a semi-nomadic herding and trading way of life in Somalia as well as ethnically Somali Djibouti and the eastern Somali Region of Ethiopia. Smuggling is rampant so reliable import numbers are hard to come by. In Djibouti, trade data showing 120,000 tonnes of imports indicates consumption of over 120 grams per capita daily.

Rice production is a relatively new phenomenon in Ethiopia, where cereals cultivation is an ancient practice, but is starting to take hold. Planted area has increased by several times since 2005 and government is forecasting a 140,000 tonne crop for 2014-15. Foreign investors have been granted large tracts of untitled land in the water-rich tribal lowlands of the southwest to be converted to major rice plantations through costly investments in land preparation.

On the highland plain around Lake Tana, the source of the Blue Nile, in the last decade farmers have increasingly learned to take advantage of annual flooding during the summer monsoon season by sowing rice instead of seeing traditional grain crops drowned.

Gradually, local rice is becoming a part of the urban diet in Addis Ababa and regional centers, just as it is increasing its “share of stomach” in almost all large cities of Africa.

Original PDF article as appeared in the World Grain magazine.

IAOM MEA celebrates 25th anniversary

iaom-mea-25-years

Middle East and Africa District attracts more than 600 delegates from 45 countries to its annual conference  in Cape Town, South Africa.

The International Association of Operative Millers’ Mideast and Africa Conference (IAOM MEA) returned to Cape Town, South Africa to celebrate its 25th year Dec. 3-6, 2014. Over 600 delegates, exhibitors, and speakers came together from 45 countries during the three days to renew old ties, establish new relationships and to exchange the latest  information on technical developments in milling as well as data and trends in wheat markets.

South Africa’s National Chamber of Milling (NCM) hosted the event for the second time in just over four years. The first IAOM MEA in South Africa took place in 2010 shortly after the first World Cup in that country.

In his welcoming speech, NCM Chairman Peter Cook made particular note of the progress of flour fortification in Africa with 19 countries now mandating the public health intervention compared to just two countries, South Africa and Nigeria, 10 years ago.

25th Anniversary

The Middle East and Africa region continues to account for nearly half of the world’s trade in wheat at 73 million tonnes in 2013-14, according to the International Grains Council, and much of the global increase in milling capacity. On this basis, the IAOM MEA has not only proved sustainable but has grown substantially over the last quarter century.

Melinda Farris, IAOM executive director, presented plaques of recognition to four long-time members of the IAOM MEA Leadership Council who have led the transformation of their annual conference from a modest gathering of 25 or so millers and grain industry representatives 25 years ago in Cairo into one of the global wheat industry’s premier events. The four included District Director Ali Habaj of Oman Flour Mills; District Chairman Merzad Jamshidi; Essa Al Ghurair, Chairman of Al Ghurair Resources LLC; and Martin Schlauri of Bühler AG, Switzerland.

Jamshidi, who has played a vital role in the important participation of Iranian millers in the district over the years, identified as a major accomplishment “just the fact we have been able to consistently keep the events attractive for both the millers and suppliers. After all, 25 years is a quarter of a century. As for the future, we are trying to get more of the mills’ key personnel coming to the show with custom-made papers to serve their needs.”

Furthermore, the  event will “go to countries where traveling would be a bit easier and could act as a hub.”

The event’s formula for success includes its benefit to and support from major wheat exporters as expressed by Sean Cowman, regional manager – Middle East and Africa of CBH Group, a cooperative owned by 4,200 Western Australian grain growers. He noted that the conference “is a unique and invaluable link to industry stakeholders.” He said it provides the connection of “Australian grain from our growers to the end users in the Middle East and Africa. We enjoy seeing customers and industry colleagues at this unique and well organized event.”

Bühler’s Martin Schlauri offered his own vision for the future, saying the event “will remain a fixed date in the agenda of the milling executive. Building up sub-regions in MEA will bring the IAOM values and contribution even closer to the markets. This would allow to further focus on topics of specific regional interest, such as processing of maize or other grains.”

Schlauri predicts that as has happened in developed countries already, in the Middle East and Africa the grain processing industry will be challenged by changing consumer expectations and trends, such as food safety or GMO issues in the raw material. “These topics and more shall be on the agenda of the future IAOM MEA conferences,” he said.

Food Security

U.S. Wheat Associates (USW) President Alan Tracy used his opening day address before key industry players from the world’s major wheat importing region to announce the launch of a major new food security initiative based on a proposed full liberalization of the world’s wheat trade. Such a measure would be the most effective way to provide “genuine food security to the world’s wheat importers.”

He pointed out that as the most important global food grain, wheat “provides 20% of the calories consumed every day on earth and 20% of the protein for the poorest half of human population. Demand is growing, but not every country that consumes wheat can produce wheat.”

The USW concept would be based on government-to-government sectoral agreements under the auspices of the World Trade Organization. “In exchange for eliminating tariffs, licenses and other trade barriers, the world’s wheat buyers would have guaranteed access to exportable wheat supplies even when world supplies are down.”

Trading Session

The emergence of the Black Sea and Baltic Sea regions as origins for wheat to the region has been one of the biggest shifts in Middle East and Africa grain trade in the last quarter century. Indrek Aigro of Copenhagen Merchants, Denmark, pointed out that the eight countries of the Baltic Sea region have seen wheat exports rise from 9 million tonnes four years ago to an estimated 17 million tonnes in the current marketing year, accounting for much of the near doubling in net European Union wheat exports to 40 million tonnes in recent years.

Total Baltic Sea region wheat harvest will be 52 million tonnes, exceeding the previous record by 15%. Saudi Arabia and Iran have become the main destination of Germany and Poland’s milling wheat. The two countries now have exportable surpluses of about 11 million tonnes.

“Germany’s wheat is reaching many new markets because of the surplus,” said Aigro. That amount will be 7.5 million to 8 million tonnes. Eleven years ago, the three Baltic countries of Estonia, Latvia and Lithuania had no exportable surpluses, but now they are shipping out two-thirds of their production.

Andrew Vorland of Glencore Grain BV, Netherlands, surveyed the supply situation from the Black Sea, noting that the 35 million tonnes of wheat exports from Russia, Ukraine and Kazakhstan this year will constitute 24% of world wheat exports.

“Black Sea wheat is moving to 100 countries these days,” he stated. Russia’s 6.2 million tonnes of wheat exports to Egypt and 3.6 million tonnes sent to Turkey account for 60% and 86%, respectively, of the wheat imports of the two countries.

Even South Africa, once dependent on the U.S. and Argentina, has become a major outlet for Russian wheat.

Jean-Pierre Langlois-Berthelot of France Export Cereales reminded the audience in his presentation that nearly 100% of his country’s wheat exports go to North African and West African countries, with Algeria, Morocco and Tunisia as the largest markets but growing volumes heading to the francophone countries of West Africa.

After Asia, the Middle East and Africa are the most important destinations for wheat exports from Australia, taking 40% of nearly 20 million tonnes in exports in the 2013-14 crop year with the trend lower this year. Nick Poutney, regional manager for Graincorp, Australia’s largest wheat exporter, explained that among the seven ports operated in the east of Australia by Graincorp, “each port zone has a specific supply and demand dynamic and quality parameters.” But this year all test weights are quite strong, he said.

Dan Basse, president of AgResource, Chicago, Illinois, U.S., in addition to moderating the trading session, provided his own animated and insightful prognostication for global grain markets in the coming years with statements such as: “We think the super cycle in agricultural commodities is kind of dead,” and that with the price of protein going up, “this is the year of species, not of grain.”

Exhibition

Ninety exhibitors from five continents and 20 countries were present at the trade show held jointly with the conference at the Cape Town International Convention Center. Turkey’s contingent of 23 exhibitors was the largest. Italy followed with 11 companies present.

A handful of firms have been present at nearly every IAOM. Ihsan Mustafa Aybakar commented, “As Aybakar, it is our 24th conference. It is not about business alone anymore. We all look forward to catch up with members of the industry. It is the biggest sectoral networking opportunity for the region. You get to meet mill owners, grain traders, equipment and service suppliers. We will be attending in the future.”

The largest groups of exhibitors were mill manufacturers, steel silo companies, and suppliers of flour additives such as enzymes and vitamin and mineral premixes for fortification.

Management Forum and Technical Sessions

During the first day’s session a series of world-class speakers challenged conventional management thinking and encouraged listeners to doubt their standard perceptions, explore the unknown and push for innovation in their approach to business.

The Technical & What’s New Session, taking up the entire second full day, provided a platform for 16 speakers to present the latest technological developments in all aspects of wheat milling. Jeff Gwirtz, president of JAG Services, Manhattan, Kansas, U.S., offered one of the three keynote speeches of the day, pointing out that in milling operations “problems may exist without you knowing it.” He described an approach relying on “the importance of checking and knowing your flour sheet to solve problems.”

Feed Milling

For the first time the conference featured a Feed Milling Technology and Trends Seminar, held on the third day. Diets in many of the countries of the region are improving to include more animal protein as economies develop and incomes rise. Many large wheat millers, most notably in Nigeria, have moved into the feed sector or are at least exploring opportunities.

African Milling School

Bühler’s Martin Schlauri as moderator of the management forum took the occasion to present Bühler’s own initiative to develop management skills in Africa by inaugurating its African Milling School in Nairobi after three years of planning and the construction of a building for that purpose at its milling service center. The first two courses are fully subscribed.

Schlauri has been named director of the school but will continue to  manage key account relationships. Noting the big increases in mill investment activity in the sub-Saharan region in recent years, Schlauri commented, “Africa is definitely on the move.”

FFI Workshop

The Flour Fortification Initiative (FFI) continued its long-running affiliation with IAOM MEA by holding a separate one-day workshop on Dec. 2 attended by about 60 public health officials, millers and NGO representatives.

FFI Director Scott Montgomery presented an FFI award recognizing the contribution of Abubakar Bakhresa, CEO of Said Salim Bakhresa & Co. Ltd., the largest milling company in Tanazania and East Africa, through its support since 2013 of national level mandatory vitamin and mineral fortification in Tanzania of all industrially produced wheat flour. Magdy Shehata of World Food Programme in Egypt received an FFI award as well in recognition of his six years of tireless work to institutionalize fortification of government-subsidized baladi bread.

IAOM MEA Dubai 2015

At the closing ceremony, Essa Al Ghurair, chairman of Al Ghurair Resources, Dubai, UAE, received the handover of the IAOM MEA District flag from Peter Cook. Organizers hope for a record turnout in late 2015 at the ever popular, thriving and business friendly air transportation hub where the event will be held for the fourth time.

Original PDF article as appeared in the World Grain magazine.