Worthy Cassava transformed into lucrative cash crop

(Reuters) – The seeds of prosperity for some rural Africans may lie in a crop that has sustained them with calories for centuries but has generated virtually no wealth for their poor countries.

Cassava – with its starchy root used to make tapioca – thrives in Africa’s tropical climates, through drought or deluge, but maize and other crops have had distinct advantages over the hardy tuber. Until now.

Cassava can remain in the soil for a couple of years but its main drawback has been that it has to be processed within 48 hours of harvesting or it spoils.
An unlisted Dutch-based company called DADTCO has developed a processing method for cassava and dispatches a mobile unit with the equipment to rural villages, so farmers don’t have to harvest their crop until it arrives.

The implications could be revolutionary on a continent where much economic activity still centres on small-scale farming.
The potential has already been spotted by global brewer SABMiller which has started making beer from cassava in northern Mozambique.
“This creates we believe a fly-wheel for commercial cassava production in Mozambique,” Mark Bowman, the brewer’s managing director for Africa, told the Reuters Africa Investment Summit in April.

“In the short term 1,400 or 1,500 farmers benefit directly. We expect we can grow that up to 6,000 farmers as the product grows,” he said.
DADTCO chief executive Peter Bolt told Reuters that similar projects are being rolled out in Zambia, Ghana and South Sudan with more to follow.
“Our target is to roll out in 26 or 27 sub-Saharan African countries in the next couple of years,” he said in a telephone interview from his Netherlands base.

More than beer
And it’s not only brewers that are focusing on cassava.
Unilever, the Anglo-Dutch consumer goods giant, is targeting the root to make sorbitol, a key ingredient in toothpaste and other products.
Unilever and some of its business partners are currently in talks about investing in a starch complex to process cassava into starch or sorbitol in Nigeria, which is the world’s biggest producer of the root and a big market for Unilever’s 3 billion euro a year Africa business.

“We are already in exploratory talks to source 100,000 metric tonnes (110,231 tons) of cassava per year for processing in Africa into sorbitol for use in our oral care products like toothpaste,” said Frank Braeken, Unilever’s executive vice president for Africa.

It remains to be seen how far the “cassava revolution” can go but it surely raises new hope on the economic and food security fronts for the world’s poorest continent.

When it comes to pure sustenance and survival, cassava is hard to beat because of its durability, even if maize and other staples generally have higher starch contents.

According to the International Institute of Tropical Agriculture, 37 percent of Africa’s dietary energy comes from cassava and per capita consumption on the continent is close to 80 kgs per year.

But instead of being grown primarily for household consumption, expect more cassava to be stored in the ground for eventual sale.
Almost like money in the bank.

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Delcidio do Amaral

Brazil corruption probe widens; Senate leader, BTG Pactual CEO arrested SAO PAULO/BRASILIA, (Reuters) – The chief executive of Brazil’s biggest independent investment bank and the leading senator in the governing coalition were arrested yesterday on suspicion of obstructing the country’s most sweeping corruption investigation ever. The detention of such prominent power brokers on orders from the Supreme Court raised the stakes dramatically in a bribery scandal that started with state-run oil company Petrobras and now threatens the heights of Brazilian banking and politics. The arrest of Andre Esteves, the billionaire CEO and controlling shareholder of BTG Pactual SA and Brazil’s most influential dealmaker, sent the bank’s listed shares into a dive that wiped out a fifth of its market value and raised red flags at the central bank. Brazil’s Congress also ground to a halt with the arrest of ruling Workers’ Party Senator Delcidio do Amaral, a veteran lawmaker who has run the economic affairs committee and who has been key to President Dilma Rousseff’s unpopular austerity program. Brazil’s currency fell as much as 2 percent as the scandal threatened both the country’s sixth-largest bank and the president’s sputtering efforts to pass a new budget and avoid another credit ratings downgrade to junk. Brazil’s central bank said it was monitoring the arrest of Esteves to see whether it would impact operations at BTG Pactual and trigger regulatory action. Banking analysts warned that BTG Pactual, the largest independent investment bank in Latin America, could struggle to navigate Brazil’s worst recession in a quarter century without its wunderkind founder at the helm. Clients withdrew funds equivalent to less than 1 percent of assets under management at BTG Pactual, which was less than had initially been expected by some, said a source with knowledge of the bank’s strategy. The six-year-old BTG Pactual, which manages about 230 billion reais ($61 billion), tapped less than 5 percent of its about 40 billion reais in cash reserves to cover those redemptions, said the source, who requested anonymity because of the sensitivity of the issue. SHOCKWAVES IN CONGRESS The political gridlock that has obstructed economic policy this year is likely to worsen with the jailing of Amaral, one of about 50 Brazilian politicians under investigation for their alleged roles in a vast kickback scandal at the oil giant known as Petroleo Brasileiro SA. Amaral’s arrest was the first ever for a sitting senator in Brazil and it sent shockwaves through the capital. Congress suspended its sessions as senators met to discuss how to handle the arrest. After a heated debate in which some government supporters defended Amaral, the Senate voted 59-13 to uphold the top court’s decision to order his arrest. Supreme Court Justice Teori Zavascki said he authorized the arrest after prosecutors presented a taped conversation in which Amaral tried to bribe Petrobras’ former international director, Nestor Cervero, out of taking a plea bargain that could implicate the senator and other politicians. Prosecutors alleged that Amaral conspired to help Cervero flee authorities. They also said the senator offered a monthly stipend to the former executive’s family, financed by Esteves, who had obtained a copy of a plea bargain based on Cervero’s testimony. Cervero was received a 12-year sentence in August for corruption and money laundering in connection to bribes paid on two drillship contracts. Another defendant in the case testified that Cervero had passed bribe money to Amaral skimmed from Petrobras’ controversial 2006 purchase of a refinery in Pasadena, Texas. Amaral’s lawyer, Mauricio Silva Leite, dismissed the accusation that his client obstructed the Petrobras investigation, saying it was based on the word of a convict. He also criticized the Supreme Court for ignoring the senator’s immunity as an elected official. SHARES DIVE BTG Pactual confirmed the arrest of its chief executive and said the bank was available to cooperate with the investigation. Esteves’ lawyer, Antonio Carlos de Almeida Castro, told reporters that the banker “certainly” had not acted to obstruct the investigation. The bank’s listed units, a blend of shares in its investment banking and private equity divisions, tumbled as much as 39 percent to an all-time low on the Sao Paulo stock exchange before paring losses to 21 percent. Court representatives said Esteves had been arrested temporarily for five days, with a potential extension of five days. Amaral was arrested for an indefinite period. Esteves, 47, has drawn on powerful connections in politics and global finance to steer BTG Pactual through turbulent times as Brazil’s economy plunged into a sharp recession. BTG Pactual’s major deals with Petrobras have drawn the attention of investigators, including the bank’s stake in Sete Brasil Participacoes SA, a supplier of oil-drilling platforms that has been swept up in the probe. BTG Pactual also bought half of Petrobras’ Africa unit in 2013. Last quarter, credit to oil and gas and infrastructure companies, which are the most impacted industries in the widening graft probe, accounted for about 16 percent of BTG’s loan book. That is the largest exposure among Brazil’s listed traded banks, according to Thomson Reuters data. Brazil’s central bank said in a press statement that it was monitoring the arrest of Esteves, adding that BTG Pactual has solid liquidity indicators and continues to operate normally. The net worth of Esteves was last estimated at $2.2 billion by Forbes Magazine.


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