Category Archives: World Grain

Maize Production soaring in eastern Africa

Maize is by far the most important cereal crop in the four largest countries of eastern Africa. Combined production of 17.2 million tonnes in 2016, despite ongoing drought, is nearly 50% more than a decade ago. Remove middle-income Kenya, which had a 14% decline, and the increase for Ethiopia, Tanzania and Uganda was nearly 70% versus population growth since 2006 of 27%.

Having increased output, one of the next major challenges is to reduce the high levels of cancer-causing aflatoxins in the region’s maize. A presentation at the 2015 International Association of Operative Millers Conference in Nairobi cited recent studies showing average ppms in the region far above international norms. Along with food safety, the dominance of smallholder farmers, government market intervention, regional trade and food security are all key aspects of the maize economy in eastern Africa as examined country by country in the survey that follows.

Foreign direct investment has brought large-scale mechanization to maize production in Uganda, helping to raise average yields. Photos by David McKee

Ethiopia

Population: 99.5 million
Production: 6.3 million tonnes

Ethiopians have cultivated cereals for thousands of years on the high plateau where their ancient civilization originated. Production of the New World grain overtook sorghum for good in 1982 to become the No. 1 cereal crop. Maize now makes up 30% of 2016 major grains production of 21 million tonnes. Due to severe drought, that figure was down 4.5 million tonnes from a record 25 million tonnes two years before. Nevertheless, 2016 maize production recovered to within 5% of 2014’s level.

Small hammermills process most maize even for urban consumption in Addis Ababa. Industrial roller milling of maize has yet to take hold.

The USDA estimates that nearly 10% of maize has been used for feed since 2011 as living standards rise.

Despite drought, the food security outlook is positive with ending stocks of maize at 450,000 tonnes. Domestic maize is one of the three main cereals held by the government in its strategic grain reserve, along with domestic sorghum and mostly imported wheat.

A state entity has operated a fertilizer importation and distribution network for many years that has helped boost average yields to around 3 tonnes per hectare even though smallholders account for 95% of production. Large investments in improved seed systems supported by the country’s donor-funded, semi-autonomous Agricultural Transformation Agency also have contributed to increased output.

Tanzania

Population: 51 million
Production: 5.5 million tonnes

Thanks to rising production with a current five-year average of 5.7 million tonnes, Tanzania has become a major exporter to deficit countries in the region. Since 2013, annual exports have been around 400,000 tonnes versus just 14,000 tonnes in the decade of the 2000s. Maize exports are a mixture of cross-border trade, deals by large trading houses, and sales from the government reserve in order to rotate stocks without disrupting domestic markets.

Maize is stored temporarily in long cribs at Amatheon Agri’s 3,000-hectare farm in northwestern Uganda.

Tanzania’s National Food Reserve Agency (NFRA) plays a large intervention role, buying up much of the commercial surplus from smallholders at a guaranteed floor price. The country’s maize ending stocks have been around 1.3 million tonnes since 2013 thanks to NFRA, which may be termed a success to the extent that for over a decade the country has not needed to appeal to international donors for food aid due to drought or other emergencies. To the contrary, organizations like the United Nations World Food Programme (WFP) sometimes rely on purchases from NFRA to supply its own food distribution programs in the region.

Small hammermills grind almost all maize consumed. Popular markets in Dar es Salaam house large numbers of locally fabricated hammermills that provide a fee-based service. Tanzanians have yet to acquire a taste for the highly refined, degermed maize meal produced by industrial roller mills elsewhere in the region.

Large maize surpluses have contributed to the leveling out of wheat imports in Tanzania to an average of 850,000 tonnes per year since 2012 following many years of increases.

Kenya

Population: 45.9 million
Production: 2.8 million tonnes

As a result of a sustained period of GDP growth, Kenya now has the highest average income of any country in the region. This is reflected in more diversified diets and a plateauing in total maize use since 2011 at around 3.7 million tonnes per year despite continued population growth. USDA estimates that 10% of the country’s maize is now going for feed use. By some measures Kenya is already considered to be a middle-income country. Rapid increases in egg and broiler production are evidence of that.

Flat consumption belies a major shift in the maize economy. Since 2012 area planted in maize has decreased by one-third while imports have quadrupled to 1 million tonnes per year. Almost all of the incoming maize originates in Tanzania and Uganda, fellow members of the East African Community (EAC) customs union. Better rainfall gives the two countries a comparative advantage in maize production vis-a-vis drought-prone Kenya.

The national grain reserve agency, Kenya National Produce and Cereals Board (NPCB), has artificially boosted production by buying a few hundred thousand tonnes per year from farmers at an average price of $30 per 90-kg bag ($333 per tonne). In June 2016 it lowered its purchase price 20% to $266 per tonne after continued lobbying from millers who sometimes depend on supply from tender sales of government stocks. Inferior quality of poorly stored government grain is an ongoing problem. When finally rotated, much of NPCB’s maize is only suitable for feed use.

Unlike in neighboring Tanzania, large industrial roller mills process most maize consumed in Kenya, at least by the urban population.

Uganda

Population: 37.1 million
Production: 2.6 million tonnes

Maize along with cassava, other root crops, plantains and beans is one of the main food staples in Uganda. Nevertheless, due to relatively high average yields of 2.5 tonnes per hectare, the country produces nearly as much as Kenya where yields are just 1.7 tonnes. Uganda exports around 300,000 tonnes to its neighbors both as maize meal and grain. South Sudan’s burgeoning urban population is particularly dependent on Ugandan maize surpluses. WFP operates a regional hub in Uganda that procures maize grains and meal within the country to supply the domestic refugee population as well as displaced populations and refugees across the borders. Feed use of maize is already 200,000 tonnes per USDA estimates, as poultry production expands.

A liberal business climate has enabled Uganda to attract significant foreign investment in agribusiness. With little government intervention to muddle cereals markets, the maize value chain also has received its share of incoming funds.

South African grain management company Afgri has established a foothold with storage facilities in a number of locations, including Gulu in the northwest. Several commercial maize farms have started up in recent years. Berlin-based agribusiness Amatheon Agri Holding NV operates one of the largest with about 2,000 hectares planted to maize on a total of 3,200 hectares of cultivated land in the northwest as well.

North and South Kivu, DRC

Population: 12 million
Production: 800,000 tonnes

DRC’s heavily populated, mineral-rich provinces of North and South Kivu are more economically integrated with other countries of the Great Lakes Region than with the rest of DRC. The large urban populations of Goma, Bukavu and Uvira benefit from imports, mostly smuggled and untaxed, of all kinds of foods, including maize and maize meal.

One bold investor has started up the region’s first modern maize roller mill in Ruzizi Plain, north of Lake Tanganyika. The electrical hook-up is from nearby Burundi. Urban consumers are pleased to buy a Congolese brand.

Government data just for South Kivu in 2013 shows 337,127 tonnes of production by 835,472 households with 135,858 tonnes commercialized, all increases from the previous year. North Kivu’s figures are 10% to 20% higher. By comparison, almost 1 million households produced over 6 million tonnes of cassava in South Kivu. Due to steady, year-round rainfall exceeding 1,500 ml, but much more at higher elevations, the potential to increase maize production in the western plateau regions of South Kivu would be enormous if only feeder roads could be built and security improved. A decades-long presence of roaming militias has displaced much of the rural population to cities along the lake-shores, leaving large tracts of arable land available for cultivation.

Rwanda

Population: 12.7 million
Production: 550,000 tonnes

Rwanda’s dirigiste government has systematically targeted production of maize, a non-traditional food, as a means of enhancing food security. The result has been a ten-fold increase in production from just 50,000 tonnes in 2000 on a hilly landscape. The Rwandan state’s strategic grain reserve maintains a relatively modest maximum level of 50,000 tonnes of stocks but has even reduced it in recent years and sold off silo and warehouse storages, judging that the country faces no major food security challenges warranting the cost of maintaining a large reserve. International companies like Afgri have invested in some of these storage facilities and put them to commercial use. There are a handful of small industrial maize roller mills around the country, some of which import maize and then reexport maize meal to neighboring countries like DRC and Burundi. A commercial poultry industry is developing, creating additional demand for maize in feed.

South Sudan

Population: 11.9 million
Production: 400,000 tonnes

The economy of conflict-torn South Sudan, the world’s youngest country, depends on petroleum exports, subsistence farming and international aid. A joint WFP/FAO assessment in 2015 estimated 1.27 million tonnes of gross cereals production in two annual crops on 1 million hectares. Precise data are lacking but the breakdown is roughly two-thirds white sorghum and one-third white maize. There are just a small number of semi-mechanized commercial farms in the north bordering Sudan. The UN report put the net cereals deficit in 2015 at 250,000 tonnes. Traders bring sorghum from Sudan and white maize from Uganda to fill this gap. However, since fighting between government factions erupted in December 2013, food aid has again become a major part of the food balance sheet. The WFP said the country has 1.7 million displaced persons in addition to 650,000 refugees mainly in Uganda receiving emergency handouts. Non-emergency programs like school lunches bring the total number of beneficiaries to 3 million, about a quarter of the population. Thanks to its commercial availability in the region, maize makes up the biggest part of the donated food basket.

Burundi

Population: 10.7 million
Production: 150,000 tonnes

Conflict-ridden Burundi, similar in area, population, geography and agricultural practices to its neighbor Rwanda, stands in stark contrast when it comes to maize production. In 1972, when it had a centrally planned socialist economy, the country attained a peak of 250,000 tonnes, two-thirds higher than current levels.

Imported maize is part of the food aid basket provided to people displaced by the recent fighting and political instability.

Somalia/Djibouti/Eritrea

Population: 10.6 million/826,000/6.5 million
Production: 116,000 tonnes/0/20,000 tonnes

The three arid countries along the Red Sea and Gulf of Aden coastlines extending to the Horn of Africa produce and consume little maize. Somalis are traditionally nomadic herders and traders. The same is true for the ethnically Somali people of Djibouti. Their modern carbohydrate preference is imported rice and pasta. Somalia’s maize planting on 200,000 hectares yields not much more than a half tonne per hectare. Some maize is grown on Eritrea’s high plateau region but teff and sorghum are the main cereal crops.

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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

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.

rice-harvesting-kpl-tanzania

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

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.