Export product of Madagascar : Madamarket Export agricultural products

Madagascar’s exports are concentrated around a few product families
In 2016, the textile, which plays a driving and stabilizing role in the Malagasy foreign trade, regained 1st place among the products exported by Madagascar. Before Nickel dethroned textile exports in 2014 and 2015, they held this position until 2013. The textile industry, mainly produced by companies operating under franc status and thus benefiting from tax exemptions, now represents 23% (compared to 19% in 2015) of the total exported. These sales have indeed increased by 15.2% in value in 2016. Since the reintegration of Madagascar among the beneficiary countries of AGOA in June 2014, textile exports have resumed towards the United States. Despite a timid start, the extension of AGOA for ten years, promulgated by the US Congress in June 2015, has attracted more investors in the textile industry in Madagascar.

On the other hand, after a rise in power between 2012 and 2015, Nickel’s exports fell in 2016, particularly because of the fall in world prices. Thus, after occupying the first rank of products exported by Madagascar in 2014 and 2015, Nickel is now in 2nd place with 18% of the total exported (25% in 2015). Nickel is produced by the Ambatovy mine – a partnership between Canadian Sherritt, Japanese Sumitomo and Korea’s KORES. In 2016, the price of Nickel reached its lowest level in fifteen years, mainly because of the significant decline in Chinese demand. Thus, sales of Malagasy Nickel fell sharply (-26.9% in value and -11% in volume). Note that cobalt, also produced by Ambatovy, was down 13% in value in 2016 (-3% in volume) and now reaches 8% of the total exported. The other ores (titanium, chromium, zirconium, graphite, and ilmenite) account for 3% of exports. In total, mining products still represent a little less than a third of exports and could strengthen their preponderance thanks to a rise in world commodity prices. In addition, the Ambatovy mine (near Tamatave, in the east of the country) has not yet reached its cruising speed (Nickel production capacity: 60,000 tonnes / year, Cobalt: 5,600 tonnes / year). The same is true for the ilmenite and zirconium extraction project that QMM, a company that Rio Tinto owns 80% of, is carrying out close to Fort-Dauphin (in the country’s southeast).

In 2016, agricultural products accounted for 26% of exports, of which 18% were vanilla alone (compared to 9% in 2015), 6.8% were cloves (7.3% in 2015), and 2% were other products (cocoa, sugar, pepper, and coffee). Malagasy vanilla production accounts for about 80% of world production each year. As in 2015, vanilla sales doubled in value (+ 100%) in 2016. Since 2015, we have seen a spike in the price of this spice (+ 60% in 2015, + 246% in 2016), caused in part by a phenomenon of speculation. In addition, global vanilla production has been in a downward trend since 2010 (production decline in India and Uganda), while demand is up 5% / year on average. In 2016, inventory depletion among Malagasy traders led to a sharp rise in prices, even though the quantity exported fell by 41%. Despite an increase in volumes of 3%, clove exports – Malagasy production accounts for 40% of world production—fell by 7% in value, due to lower world prices.

Finally, among seafood products, shrimp exports (mainly from free enterprises) account for almost 4% of the total exported (3% in 2015), an increase of 30% in value in 2016. The Malagasy shrimp has acquired, over the years, various prestige labels (Red label, AB organic label) on the main export markets (France, Portugal and Spain).

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