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Jorge Tadeo Lozano
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December 2015
CCP:HF/JU 15/Report
E
COMMITTEE ON COMMODITY PROBLEMS
JOINT MEETING OF THE THIRTY-EIGHTH SESSION OF THE
INTERGOVERNMENTAL GROUP ON HARD FIBRES AND THE
FORTIETH SESSION OF THE INTERGOVERNMENTAL GROUP ON
JUTE, KENAF AND ALLIED FIBRES
Bogota, 25 – 27 November 2015
Draft Report
I.
INTRODUCTION
1.
The Joint Meeting (JM) of the Thirty-eighth Session of the Intergovernmental Group (IGG) on
Hard Fibres and the Fortieth Session of the IGG on Jute, Kenaf and Allied Fibres was held on 25-27
November 2015 in Bogota, Colombia. It was attended by 28 delegates from the following member
countries: Brazil, Colombia, Cuba, Kenya, Philippines, Poland, Sri Lanka and the United Republic of
Tanzania (URT). Observers attended from the International Natural Fibres Organization (INFO) and
the London Sisal Association.
2.
The session was jointly inaugurated by Mr César Oliveiros Cárdenas, Director, Ministry of
Agriculture and Ms Cecilia María Vélez White, Chancellor, University of Bogota Jorge Tadeo
Lozano. Statements were also delivered by Mr Luis Dussán, Finagro and Mr Julio Ramírez,
Agriculture and Livestock Research Corporation. The opening statement was delivered by Mr Rafael
Zavala, FAO Representative in Colombia, on behalf of the Director-General.
3.
The Meeting elected Ms Jennifer Castillo (Colombia) as Chairperson, Mr Wilson Andrade
(Brazil) as First Vice-Chairperson and Mr Deogratias Ruhinda (URT) as Second Vice-Chairperson.
4.
The Meeting adopted the Provisional Agenda CCP: HF/JU 15/1 and the Provisional Timetable
CCP:HF/JU 15/Inf.2.
5.
The JM decided that its report would be prepared by the Secretariat for adoption on
27 November 2015.
II.
A.
ECONOMIC AND POLICY ISSUES
CURRENT MARKET SITUATION AND MEDIUM TERM OUTLOOK
6.
The JM reviewed the current market situation and medium term outlook with the assistance of
document CCP:HF/JU 15/CRS 2 which contained production, trade and price tables and were
compiled from statistics provided by members of the IGG on Hard Fibres and the IGG on Jute, Kenaf
and Allied Fibres. As data and market information updates from several countries were provided to the
Secretariat, the Meeting agreed that document CCP:HF/JU 15/CRS 1 be revised and uploaded on the
FAO website (http://www.fao.org/economic/est/est-commodities/jute-hard-fibres/jute-hard-fibresmeetings/en/). In summary, demand for most of the fibres increased in 2014 leading to higher prices,
2
CCP:HF/JU 15/Report
particularly for abaca used in the production of tea bags and coffee filters and sisal demanded by the
construction industry. In addition, concern continued to be expressed at the possible change in the
supply structure of sisal in Brazil, the world's largest producer, as growers migrated to urban areas due
to hardship caused by drought, which is expected to intensify with the El Niño weather phenomenon.
7.
As for the medium term projections, delegates provided some excellent insights to
development programmes in their respective fibres subsectors which would allow adjustments in
supply levels in line with rising demand. There were some reservations on the model used for
generating the projections. The Secretariat took note of the JM’s concern and welcomed offers to
provide a better methodology and model that would improve projections. The JM noted that major
gaps in data provided to the Secretariat were a major concern, and the Secretariat was not able to
prepare its annual statistical compendium for the hard fibres, jute, kenaf and allied fibres before the
Joint Meeting because data was incomplete. In acknowledging that it was extremely difficult to
analyze the market because of lack of accurate data, the JM agreed to improve the provision of data to
the Secretariat.
III.
PRICE TRENDS FOR SISAL, ABACA, AND COIR
8.
The Meeting reaffirmed the standpoint of the Sub-Group of Sisal and Henequen Producing
Countries that forecasting price ranges was useful in providing information to guide farmers and
traders in their production and marketing decisions as well as enabling governments to implement
appropriate policies.
9.
The Meeting adopted the Sub-Group's forecasted price trends as follows:

Brazilian Type 3 fibres between USD 1 400 and USD 1 500 per tonne, f.o.b. Salvador; and

East Africa UG fibre between USD 1 900 and USD 2 150 per tonne, f.o.b. Although this is the
price range, there are some sisal sold particularly to the construction sector, which has attained
up to USD 2 300 per tonne.
10.
Abaca prices were provided by the Philippine delegation as follows (FOB USD/tonne):
11.
Grade
2015
2016
2017
2018
S2
1767
1856
1949
2048
G
1585
1679
1768
1862
JK
1423
1505
1592
1684
Y
1271
1358
1452
1551
Coir prices in USD per tonne were provided by the delegate from Sri Lanka:
Year
Mattress fibre
Bristle fibre
Coir yarn
Twine
Pith
2014
383
401
782
707
318
2015 (to March)
365
510
715
1104
274
A.
i)
REPORT ON SUBSIDIARY ACTIVITIES
Report of the Nineteenth Session of the Sub-Group of Sisal and
Henequen Producing Countries
12.
The Report of the Sub-Group of Sisal and Henequen Producing Countries was presented,
endorsed by the JM and is appended as Annex 1.
CCP:HF/JU 15/Report
3
B.
POLICY REVIEW
13.
The JM examined this agenda item with the assistance of document CCP:HF/JU 15/2 and
noted that accurate data and analyses were prerequisites to formulate effective policy options which
influenced economies in addressing poverty alleviation and improving food security and malnutrition.
14.
The JM noted that at its last session, the Secretariat was requested to modify its annual
questionnaire to include a comprehensive database of tariffs and non-tariff barriers so as to have a
better understanding of the policy environment influencing international trade. However, the JM noted
that the response rate to the questionnaire was extremely low, even after direct follow-up by the
Secretariat to members of the Groups. In addition, several delegates mentioned the difficulties of
obtaining proprietary information from the private sector. To rectify this situation, the JM suggested
that the Secretariat also send copies of the questionnaire to the representatives of the institutes that
normally attend the JM to improve the response rate.
C.
THE FIQUE VALUE CHAIN IN COLOMBIA
15.
In her capacity as delegate of Colombia, the Chairperson presented the analysis of the fique
value chain in Colombia. The JM noted with interest the developments that had taken placed and
suggested areas that could be improved.
16.
Sisal is a plant in the Agavaceae family, genus Furcraea, originally from Colombia, which
grows at between 0-3 000 masl. It is a late flowering plant classified as a hard fibre. The main
producing departments are: Antioquia, Cauca, Nariño and Santander, which account for 80 percent of
national production. Colombia has a planted area of 20 000 hectares and produces 18 000 metric
tonnes (2014). The set-up cost per hectare is USD 2 300 and the output value per tonne is USD 700
(2014). Sisal fibre is used to make packaging, twine, geo blankets, crafts, paper, reinforced fibre,
agglomerates and heat insulation. Solid waste products (bagasse) are processed mainly for organic
fertilizers and animal feed concentrates – and sisal juice is mainly used to produce sapogenins, sugars,
alcohol and pesticides, among other things.
IV.
A.
INTERGOVERNMENTAL ACTION
POSSIBLE PROJECT FUNDING SOURCES
17.
This agenda item was considered with the assistance of document CCP:HF/JU 15/Inf. 3 which
identified and compiled lending criteria of several possible sources of funding. However, the JM was
informed that without well-defined, robust project proposals, a thorough analysis of possible sources
of funding could not be undertaken.
18.
Several delegates mentioned that it was not helpful if funding was only available at the
country level as most countries were already aware of this and had engaged donors accordingly for
country-specific programmes. What was needed was funding for projects that would benefit the
groups as a whole. The JM was informed that most of the funding sources contained in the document
provided funding on a country-specific basis rather than through groupings such as the membership of
the IGG/HFJU. The JM requested the Secretariat to do further work in this area.
B.
REPORT OF THE WORKING GROUPS
19.
The Observer from INFO tabled a document, Now, the time to act!, which contained the work
of the Working Groups on Policy and Research and Development, as well as future areas of work that
needed to be undertaken by the WGs. The JM endorsed the document and recommended follow-up.
4
CCP:HF/JU 15/Report
V.
A.
WORK PROGRAMME AND OPERATIONAL PROCEDURES
TERMS OF REFERENCE AND RULES OF PROCEDURE OF THE IGG ON
HARD FIBRES AND THE IGG ON JUTE, KENAF AND ALLIED FIBRES
AND THEIR RELEVANCE TO THE STRATEGIC OBJECTIVES
FRAMEWORK OF FAO
20.
The JM noted that implementation of FAO’s strategic objectives for the next biennium (20162017) will begin on 1 January 2016. This JM was an opportunity to be fully involved in the planning
and implementation of the JACKS programmes by prioritising the needs of these fibres and
developing achievable targets and work plans in line with the strategic objectives (SOs) of the
Organization (document CCP:HF/JU 15/CRS 3 and 4). The Groups reviewed their terms of reference
with respect to their relevance in achieving objectives contained in the SOs and reiterated the need for
the terms of reference (document CCP:HF/JU 00/7) to be as broad as possible in order to adapt to the
changing environments. The JM also recommended that the CCP consider merging the IGG on Hard
Fibres with the IGG on Jute, Kenaf and Allied Fibre in order to achieve critical mass, economy of
scale and political relevance.
B.
INTERGOVERNMENTAL ACTION PLAN
21.
The JM agreed to the priorities suggested under agenda item IV. B. being policy development
and analyses, research and development, and sustainable development systems, including standards
and medium term projections.
VI.
22.
OTHER MATTERS
No other matters were discussed.
A.
B.
ANY OTHER BUSINESS
DATE AND PLACE OF THE NEXT SESSION OF THE JOINT
MEETING OF THE IGG ON HARD FIBRES AND THE
IGG ON JUTE, KENAF AND ALLIED FIBRES
23.
The JM agreed that the Director-General would decide the date and place of the next session
of the IGG on Hard Fibres and the IGG on Jute, Kenaf and Allied Fibres in collaboration with the
Chairperson.
CCP:HF/JU 15/Report
5
APPENDIX 1
REPORT OF THE NINETEENTH SESSION OF THE SUB-GROUP OF
SISAL AND HENEQUEN PRODUCING COUNTRIES
I.
ELECTION OF CHAIRPERSON AND VICE-CHAIRPERSON
1.
The Sub-Group of Sisal and Henequen Producing Countries held its Nineteenth Session in
Bogota, Colombia, on 25 November 2015. It was attended by delegates from Brazil, Colombia, Kenya
and the United Republic of Tanzania (URT). An Observer from the London Sisal Association also
attended.
2.
Mr Salum Shamte (URT) was elected as Chairperson and Mr Wilson Andrade (Brazil) was
elected as Vice-chairperson.
II.
3.
ADOPTION OF THE PROVISIONAL AGENDA
The Sub-Group adopted the provisional agenda as submitted by the Secretariat.
III.
MATTERS FOR CONSIDERATION BY THE SUB-GROUP AND
SUBMISSION TO THE GROUP
4.
A review of current developments in the sisal sub-sector was provided by each delegation.
The Secretariat has taken note of them, and they will be incorporated in the revision of its current
market situation and outlook. In particular, the Sub-Group noted that the sisal prices remained firm,
with forecast modest growth due to increased demand, particularly in the construction sector and the
continued supply shortfall in Brazil in relation to demand.
5.
Demand for sisal fibre from both Brazil and Africa has been in excess of production since the
last session of the Sub-Group, pushing prices to unprecedented all time high levels. The Sub-Group
agreed that the continued increase in prices would have a negative impact for some end-uses and
would be detrimental to the whole sisal industry.
6.
Since the middle of 2015, the demand for Brazilian sisal fibre primarily from China has
dropped, and this, coupled with the movements in the exchange rate of the Real against USD, has
impacted on the pricing level of all Brazilian grades. The collapse in the Chinese domestic market
which has been a significant part of the export of raw sisal from Brazil is difficult to predict how long
this is likely to be a factor but pricing has moved downwards from the high levels achieved during the
first six months of 2015.
7.
The African sisal market is still firm and for the moment it is not possible to predict if the
decline in the Brazilian price could impact on the African market. As the fibre from each region is
used for completely different end uses, the African market could remain at the current high pricing
levels, but further increases are likely to be limited.
IV.
PRICE TRENDS FOR SISAL FIBRE
8.
The delegates reiterated the relevance of the Sub-Group in assisting producing countries arrive
at a common position in setting indicative prices. However, as it has been misconstrued as "price
fixing", the Sub-Group decided that it be reworded as "forecasting price trends".
6
CCP:HF/JU 15/Report
9.
The Sub-Group forecasted the following price trends:


Brazilian Type 3 fibres between USD 1 400 and USD 1 500 per tonne, f.o.b. Salvador; and
East Africa UG fibre between USD 1 900 and USD 2 150 per tonne, f.o.b. Although this is the
price range, there are some sisal sold particularly to the construction sector, which has attained
up to USD 2 300 per tonne.
V.
ANY OTHER BUSINESS, INCLUDING DATE AND PLACE OF
THE NEXT SESSION
10.
The Sub-Group recommended that its Twentieth session be convened at the site and
immediately prior to the Thirty-ninth session of the Intergovernmental on Hard Fibres, possibly in
2017.

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