Soft Commodities: Next Mine of African Wealth

December 18th, 2015

With agricultural optimization a key economic priority of governments across Africa, logistic partners play a critical role moving soft commodities to market.

Africa is sitting on a gold mine. But unlike its precious metals, minerals and oil, Africa's other treasure is a renewable source of wealth that can benefit export markets and Africans alike.

That richness is Africa's soft commodities, which national governments are making central to the continent's economic expansion.

Efforts to develop Africa's agricultural wealth will require considerable organizational, technological and infrastructure improvements that national leaders and outside investors are seeking to accelerate.  The results could be enormous.

Africa's under-optimized agrarian sector is already expected to generate $880 billion annually by 2030. It should produce even more if its gigantic potential can be tapped. Fully 50% of all the world's arable land is in Africa. Yet only half of the continent's fertile land is currently cultivated, providing only 80% of Africa's need for food and non-edible soft commodities.

Africa's agrarian output also provides a job bounty. Already, 65% of the continent's population earns its living directly or indirectly from agricultural activity. Countless more jobs should be created in farming and processing industries as more organized and efficient cultivation spreads to wider expanses of land.

Food self-sufficiency is a major goal across Africa, which governments have prioritized with policies to better utilize Africa's agricultural potential. That includes coordinating activity across plots often split among smaller holders, and harmonizing and diversifying crops produced from them. That should also transform national agricultural sectors from individual activity towards veritable agro-industrial models.

Another main governmental focus is getting better tools, technologies, seed and fertilizer to the often remote areas being farmed, and developing regional and national irrigation projects. Experts say such improved coordination and assistance alone would be enough to lift annual crop increases of 7% to 14% or more.

But in addition to boosting output, African officials also want to promote diversification of soft commodities raised. A main objective of that is to correct the over-emphasis on cash crops primarily for export with greater focus on rice, corn, wheat and other edibles required for Africa to meet its own food needs.

Meantime, countries like Ivory Coast are setting up plants to domestically process export crops like cocoa – creating jobs making chocolate the country now must re-import.

Global giants like Olam, Starbucks, Nestlé and Unilever are also supporting the agricultural modernization drive, which promises to ensure traceability commitments of products they use.

Logistic partners play an important role in the changes underway by assisting in the development of infrastructure for storage and transport networks. Those assets are already struggling to keep pace, and are often ill adapted to soft commodities.

Bolloré Logistics has been investing and innovating to provide producers, dealers and buyers alike with valuable solutions. Its deep experience in all levels of African logistics makes it a single interlocutor for all storage, space, documentation and other on behalf of clients.

Bolloré Logistics also adapts its peerless African transport and storage network to accommodate the surge of commodities harvested, which occurs during two intense periods annually, and keeps them moving despite bottlenecks.

"With port facilities full, we've established storage spaces at the peripheries of urban centers – and even the areas crops are grown – where commodities can be loaded into containers and delivered directly to waiting ships," says Philippe de la Kethulle, soft commodities director for Bolloré Logistics. "Alternatively, we can route produce to ports that still have storage capacity elsewhere on the coast."

The result of that logistical effort is a bigger flow of modern fertilizers, seeds and equipment towards better-organized farms inland, and a larger and faster stream of soft commodity yields back to domestic and foreign buyers. It's all part of the wider plan to use Africa's vast agricultural potential to transform the stream of soft commodities into a renewable torrent of wealth rising from the ground.

Key Figures
  • 20%

    More fuel-efficient for the Boeing 787 and the Airbus A350

  • 70%

    of Urbanisation is expected by 2050

  • 27

    mega-cities are expected by 2050, with at least 10 million people, compared to 1...

  • +18,4%

    of growth for E-commerce retail market in Europe in 2015

  • 82%

    of goods are moved by road

  • 1 billion

    Population in Africa

  • 60%

    of Africa’s population will be urbanized by 2050

  • 7,5%

    of growth for Indian GDP in 2014

  • 4,9%

    of growth for African GDP in 2016

  • 6,1%

    of growth for East Asian GDP in 2015, the world’s fastest-growing region

  • 19 224 teus

    transported by the MSC Oscar, the largest container ship in the world

  • 396 m

    is the size of the MSC Oscar ship

  • 120 h

    is the Non-Stop Flight Record done by Solar Impulse

  • 4,5%

    of growth in 2015 for Global Airfreight demand