Current Trade News

The Ministry of Agriculture in collaboration with the Department of Climate Change and Metrological Services in the Ministry of Forestry and National Resources would like to inform all farmers and general public, that the rainfall forecast for the 2020/21 season is generally favorable for agriculture production. Most of the areas of the country will generally receive normal to above normal total rainfall amounts by the end of the season, specifically:
• During October to December 2020, most of the southern and central areas are expected to receive normal to above-normal rainfall amounts while most northern areas are expected to receive normal to below-normal rainfall amounts.
• During January to March 2021, most areas in the south, center and the north are expected to receive normal to above-normal rainfall amounts. However, pockets of dry conditions are expected mostly over south and central seasonal rainfall forecast and seasonal forecast probabilities.
The forecast implies that during the 2020/21 rainfall season, there is high chance of many parts in the country receiving good rainfall. However, since La Nina conditions are established, extreme weather events such as floods in prone areas are likely to occur due to heavy rains while some parts of the country are likely to experience pockets of prolonged dry spells during the season.
Source: Daily Times.
One of most the prominent challenges facing Africa is providing food security for its citizens. While many farmers still rely on traditional techniques to coax a living from the land, there are opportunities to use cutting-edge technology to drive Africa towards a food-secure future.
The Food and Agriculture Organization of the United Nations (FAO) reports that over 2 billion people do not have access to safe, nutritious and sufficient food. A steady increase in hunger since 2014 together with rising obesity, clearly indicates the need to accelerate and scale up actions to strengthen food systems and protect people's livelihoods.
It seems only fitting then, that in 2020, the theme for World Food Day is 'Our Actions are Our Future'. Accelerating innovation in agri-tech will enable data-driven farming that can optimise yields, boost farm productivity and increase profitability - all while feeding a nation.
AI in agriculture uses cutting-edge data, advanced analytics and machine learning to bring centuries-old farming knowledge into the modern age, giving farmers the tools to optimise crop yields and mitigate the effects of climate change through tools like smart irrigation. With agriculture sustaining 70% of Africa's livelihoods, Microsoft is committed to ensuring that all farming communities are equipped with the latest tools including AI, IoT and edge computing to improve productivity and sustainability across the sector, leveraging our extensive partnerships and initiatives network in the process.
There has been reference in the recent past of AI replacing people in jobs, but what happens when AI and IoT devices enables people to spend less time on menial manual labour and more time boosting productivity and crop yields? AI and cloud technology can be used to monitor soil, climate changes and more to make better decisions on when, where, and how much to plant on farms. Precision farming, brought about by the adoption of advanced technologies into the agricultural sector, will revolutionise food production.
In Kenya, SunCulture helps farmers improve their crop yields through solar-powered irrigation systems. Using IoT technology, SunCulture customers are generating 10x more annual income, experiencing a 300% increase in crop yields, and saving 17 hours of manually moving water per week. And by leveraging TV white spaces (TVWS) technology that expands high-speed internet access to underserved areas, SunCulture is bringing precision farming to more smallholder farmers.
The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) recently entered into a Memorandum of Understanding with Microsoft to collaborate in helping Nigerian farmers become more productive, reduce costs, practice sustainable agriculture and achieve better agricultural outcomes through the deployment of the FarmBeats platform, which harnesses sensors, drones and cameras for seamless data collection, helping farmers improve crop yields as well as increase income. As many as 8 million farmers and 4 million hectares will be positively affected.
Particularly for smallholder farmers, it's a challenge to get reliable weather and market information in real time that can help with agricultural decision-making. But almost every farmer has a phone in their back pocket.
A mobile platform has recently been built by a team of Microsoft developers to democratize access to information using a feature or a smart phone. Farmers can access information on pest and soil diagnosis, market prices, agricultural news, success stories from neighbouring farmers, weather, soil testing and personalized recommendations for maximizing yields based on their soil tests, with an intended initial impact of 100 000 farmers.
Other agri-tech social entrepreneurs are effecting real changes for farmers and their supply chains. Twiga Foods is a mobile-based business-to-business food supply platform that links smallholder farmers in rural Kenya to informal retail vendors in cities. N-Frnds brings the power of digital via mobile to subsistence and smallholder farmers in Africa and other emerging markets, and has nurtured a community of farmers who can communicate with each other without the need for an internet connection or mobile data. It also provides access to financial services for market segments that are traditionally underserved by formal banking and insurance.
Microsoft believes in increasing access to agricultural knowledge through collaboration. It takes an entire ecosystem to initiate change, and that includes companies, government departments and agencies, and a network of startups and entrepreneurs, all with a common goal of solving food insecurity.
Microsoft, through the 4Afrika initiative has collaborated with the Alliance for a Green Revolution in Africa (AGRA) to co-create technology solutions in Africa as it works to improve food security for 30 million farming households across 11 countries by 2021. The partnership stands alongside investments such as our support of the World Bank's 1 Million Farmers Platform, which aims to bring one million farmers onto a digital platform over the next three years.
We are also working with ministries across Kenya, Nigeria, South Africa and Egypt to drive impact in agriculture. In Egypt, in partnership with the Ministry of Communications and Information Technology and the Ministry of Agriculture, the engagement includes intelligent crop detection and water demand forecasting. Key focus being on a successful farmer engagement to promote good agricultural practices, secure data sharing between agricultural entities, and connected farms that enable data collection through agricultural IoT sensors. Additionally, in South Africa, Microsoft commissioned Research ICT Africa, in partnership with the University of Pretoria, to help identify opportunities within the industry to make farming more efficient and cost-effective, and highlight key regulatory and policy issues to address.
The Kenyan National Agriculture Platform is a key initiative to drive digitalization in agriculture. Earlier this year, Microsoft started engaging with the Ministry of Agriculture, Livestock, Fisheries and Cooperatives (MoALFC) to collaborate in accelerating digital transformation in the agricultural sector in Kenya.
Across the continent, from South Africa to Kenya, Ghana, Egypt and beyond, we are working hard to enable agri-tech through various channels and partnerships. Technology has the potential to change the face of farming, using smart tools and platforms for precision farming, predicting weather patterns, and maximizing the use of scarce water resources. By harnessing agri-tech, we can help solve the pressing issues around food security to meet the United Nations Sustainable Development Goal #2 of Zero Hunger, and enhance economic development in the process.
The planned investments in Zimbabwe's fertilizer industry will trigger significant reduction in cost of the products and make them more competitive on both local and the export market, according to a Government medium term strategy of reviving the sector.
Zimbabwe's fertilizer products are probably the most expensive in the region, partly due to high costs leading to massive production inefficiencies.
This makes the commodity unaffordable to many farmers, particularly small scale and communal.
Zimbabwe's demand for fertilizer in a normal and good farming season, is about 600 000 tonnes (both basal and top dressing), of which 70 percent goes towards Government farming programmes.
Under the Five-Year Fertilizer Import Substitution that the Government has adopted, nearly US$80 million would be invested to enhance capacity of local firms with prices expected to gradually decline by an average 28 percent over the next four years.
Ammonium nitrate, according to the roadmap crafted by the Ministry of Industry and Commerce, will gradually drop to US$18 for a 50 kilogramme bag from the current US$25 while the price of phosphates will decline to US$9,25 from US$13.
The roadmap will be largely anchored on ramping up production at Sable Chemicals, the country's sole ammonium nitrate producer and Chemplex Phosphates.
An investment of nearly US$40 million would see Sable Chemicals increasing output to 240 000 tonnes of AN by 2024. This would in turn reduce imports from the current 220 000 to 10 000 tonnes, according to the five-year strategic roadmap.
About US$36 million would be invested in Chemplex's subsidiaries -- ZimPhos and Dorowa Mines and this is expected to propel phosphates production to 100 000 tonnes from 80 000 tonnes while bringing down imports to 140 000 from 180 000 tonnes.
Fertilizer Association of Zimbabwe president Mr Tapuwa Mashingaidze said he was optimistic that the roadmap would result in improved production efficiencies, which would lead to drop in prices. "Fresh investments will result in higher efficiencies and that reduces costs," Mashingaidze, who is also chief executive of Chemplex said.
Industry and Commerce Minister Dr Sekai Nzenza, said the planned investments would enhance efficiency of local producers, thus enabling fertilizer products to be more competitive.
"Our fertilizer products will target the export market and become competitive within the region," Dr Nzenza told Business Weekly. "We will leverage on the Africa Continental Free Trade area with our quality products. We will bring Zimbabwe into the limelight of local production within Africa."
Zimbabwe used to be a major exporter of fertilizer until late 90s when it lost its competitiveness largely to economic challenges. From being a major exporter, the country is now spending several millions of United States dollars to import fertilizer.
In the past seven years, Zimbabwe spent a whooping U$622 million on fertilizer imports.
The large chunk of the money was forked out by the Government for State-assisted farming programmes such as Command Agriculture and the strategically important Presidential Inputs Scheme for small-scale farmers and vulnerable households.
Had local fertilizer producers been adequately supported, the Government would have spent just US$400 million, not to mention the impact this would have had on industries -- both forward and backwards linkages.
There are 12 fertilizer companies in Zimbabwe with the newer ones being involved in making blended NPK compounds. Out of these, three companies are involved in the primary production of raw materials. These are Dorowa Minerals which mines phosphate rock in Buhera, which is in turn converted to fertilizer grade phosphates by ZimPhos in Harare
Then Sable Chemicals in Kwekwe produces AN from imported ammonia following decommissioning of its electrolysis plant three years ago. At the secondary level, three companies have granulation capacity and these are Zimbabwe Fertilizer Company, Windmill and FSG. Windmill also operate blending plants.
FSG, Omnia, ETG and several other companies operate blending plants whereby granulated materials are physically mixed to make various grades of NPK compounds. The degree of value addition is obviously higher for primary producers.
Garlic farmers in Rwanda have appealed for government support, saying that the lack of access to market is hurting their earnings.
According to figures from National Agricultural Export Development Board (NAEB), the country has over 13,000 garlic farmers grouped in 11 cooperatives, who produce over 3,000 tonnes of garlic every year
The produce is sold both locally and in the export market.
However, the closure of borders with neighbouring countries in order to contain the spread of Covid-19 affected Rwanda's garlic exports; as a result, farmers now heavily rely on the local market.
This, they say, has led to oversupply of garlic and effectively occasioned a drop in prices.
A kilogramme of garlic drastically decreased from between Rwf3,000 and Rwf4,000 to between Rwf350 and Rwf700, plunging farmers in enormous losses.
"We are counting huge losses," Emmanuel Semugeshi, a garlic farmer from Musanze District told The New Times
Since March, Semugeshi planted 1,200 kilogrammes of garlic seeds on two hectares in an investment worth over Rwf4 million.
"Currently I am stuck with four tonnes of garlic. The produce is rotting as we do not even have proper storage facilities," he noted.
Semugeshi might lose Rwf15 million in potential revenues from over four tonnes.
François Hakizimana, another farmer from Nyabihu District, said he has one tonne of garlic but sells a kilogramme at Rwf500 in Byangabo market
Saddled with bank debt
Semugeshi is also struggling to pay a bank loan of Rwf1.2 million.
The farmers have appealed to NAEB to set up market centres for garlic at borders.
DR Congo, Kenya, South Sudan among others are the major destinations for garlic from Rwanda. The Covid-19 outbreak slowed cargo traffic to and from these countries.
Lack of post-harvest handling facilities
For some time now, farmers have also complained about the lack of modern technologies to store their produce.
"We heard that there was a project to set up modern drying facilities that could help us avoid post-harvest losses," he added.
The proposed eight modern drying facilities and a factory to add value on garlic was announced in November, 2019. They are supposed to be set up in Gataraga Sector of Musanze District to offset post-harvest losses for farmers. The factory seeks to produce drugs, cosmetics, flour and spices from the garlic.
The Rwf1 billion project is supposed to be implemented by Business Development Fund (BDF), Post-harvest and Agribusiness Support Project (PASP) and Rwanda Agriculture and Animal Resource Development Board (RAB) as well as the districts.
Officials speak out
Andrew Rucyahana Mpuhwe, the Vice Mayor in charge of Economic Development in Musanze District said they are aware of the issue and are working with NAEB to link farmers to both local and export markets.
He said some drying facilities have been completed but the factory to add value to garlic is yet to be completed.
"We are working with NAEB to rescue garlic farmers from losses. For instance, the investor in value addition will, this week, buy 26 tonnes from farmers. There is another investor from Egypt in negotiations to buy more tonnes of produce," he said.
Pie Ntwari, NAEB's Communication Officer, told The New Times that they have recommended that garlic be dried and be transformed into spices to make it more suitable for export.
"We also encourage farmers to always farm crops for which they have contacts with buyers," he added.
At a time when the rest of the world is re-thinking its approach to commercial agriculture, Africa has a clear opportunity to refresh its approach to the sector and become an emerging force. Big shifts are already happening in food production, land and water use, and the integration of agri-tech and product tracing. If African firms take an early lead during this transition, they will be well placed to compete globally by building enduring assets and commercial advantages beyond primary production.
The financing of new investments in agriculture has always relied on a healthy financial eco-system: active banks, sound insurers and lively futures markets. The next set of gains will come from new platforms that allow small and large firms to connect to each other and to their shared stakeholders. Reciprocal exchange of market data will make smaller, efficient players more visible to large buyers.
"Without continued advances in agricultural productivity, the whole project of African advancement is at risk," according to Linda Manda, sector head agribusiness, corporate and investment banking at Stanbic Bank's parent company, Standard Bank.
"The stakes are high for all of us", says Ms Manda, "because communities in Africa rely on the agriculture industry for much more than food: employment, investment and infrastructure development are all part of the deal." Over half (52 percent) of all people in Sub-Saharan Africa are employed in agriculture (2019).
Three recent developments: Higher value incentives
Three recent development milestones suggest that African firms are ready to move beyond low-margin primary production while remaining active in agriculture. According to Sola David-Borha, chief executive of Africa regions at Standard Bank, "'higher-value economic activity is even more likely if finance, technology and trade move deeper into African agriculture. Larger and more open markets, strong supplier networks and technology investments will drive Africa's growth."
Trade data, and Standard Bank's own long experience of trade finance, shows that Africa has been a net importer of food for almost two decades although the trade deficit has narrowed recently. Despite impressive export growth of certain key products, other food imports continue to rise. The covid-induced disruption to imports are a reminder that regional resilience in food supply is a practical imperative, not an intangible aspiration.
A larger, more open, internal market in SSA
First, the African Continental Free Trade Area (AfCFTA) should create a much larger internal market that gives producers access to a larger and more open market. Local production can better compete with the current import-and-distribute model. Large-scale production will arise when the returns are not stifled by trade friction. As an African bank, Standard Bank's role is to put our strong balance sheet to work, lending to the new crop of agri-entrepreneurs.
Multinationals are already active cross-border distributors, but we expect new African producers to be attracted to the intra-African produce-to-trade and value addition opportunity. Africa also needs to be ready for the next disruption in trade. Some global imports will always be required but it would be wise to ensure that key inputs can also be sourced regionally.
Second, the contrived distinction between the produce of small-holder farmers and very large commercial producers is beginning to fade. The new financial platforms being offered by Standard Bank will confirm the extent which large and small farming operations can complement one another. Out-grower programmes offered by large global firms allow smallholders to establish themselves as suppliers to the biggest and most profitable value chains.
Tobacco, sugar and sorghum are all good case studies. Our banking platform is a place where buyers can meet producers, surrounded by market data on inputs, crop prices, volumes, regulations, trade advice and currency movements.
From the top of a tall grain silo, the neat polygons of monocrop plantations appear to be the only advanced outposts of progress. By contrast, small-holder farmland can seem rough and rudimentary remnants of a pre-industrial age. Our own experience is quite different. Smallholder farmers that have access to the right platforms and better yields are also able to compete on quality and cost. Local knowledge of weather, grains, indigenous varieties, insects, and soil has accumulated over many years in Africa and is becoming a treasure of indigenous competence and resourcefulness. The huge expansion of biological patents attests to the large commercial value of small, local insights.
Adoption of technology and optimization logistics
The third recent milestone is the broad acceptance across Africa that advances in technology are not peripheral to growth. Grudging acceptance has given way to enthusiastic adoption. Healthy livestock, fertile plantations, productive greenhouses and efficient cold chains all require technology partnerships to keep them productive and profitable. Two decades of smartphone penetration in rural communities has probably eased the transition from guesswork and speculation to data-driven decisions and GPS mapping.
To make the most of this milestone, every hectare of land, every seedling and every bag of fertilizer must be used optimally. On-farm losses and unreliable methods are simply unaffordable during health pandemics and economic recessions.
Private investment in telecoms, machinery and pipelines will eventually work alongside publicly funded infrastructure: roads, rail and bulk water supplies.
Policy reforms need to support more public-private partnerships that have shown they can build and maintain high-quality infrastructure assets.
Consumer demand for less waste and more conservation will support investments in new systems that supply micro-nutrients to digitally-mapped crops and livestock. Food-insecure communities in Africa can cheer this development as much as time-starved households in wealthy countries: a regular surplus of well-priced food is the best guarantee of the social stability in which economic growth can best be cultivated.