Business

Millers take delivery of N470.2bn wheat in six months

Despite the increase in the global price, a total of 2.6 million tonnes of wheat valued at N470.6 billion ($941.2 million) have been imported by Nigerian millers in the last six months.

 

Finding revealed that the price of the grain has gone up in major markets from $230 to $362 per metric tonne as consumers’ food preferences shifted towards wheat products. As of August 9, 2021, wheat quotes for the leading wheat producers rose significantly from between $236 per tonne to $318 per tonne.

 

In Argentina, price of the grain rose to $294/tonne; Australia, $294/tonne; European Union, $280/tonne; Russia, $268/tonne; Canada, $362/ tonne and United States, $318/ tonne. Meanwhile, since the beginning of July, 2021, price of the grain has grew by $48 per tonne in Canada.

 

Also in the United States, price of hard red winter variety has increased by $56 per tonne and in the EU by $43 per tonne.

 

In Australia, the price also grew by $35 per tonne due to  strong exports, while in Argentina, $27 per tonne and Russian prices grew by $34 per tonne, but remained at a competitive level. Last week, statistics by the Nigerian Ports Authority (NPA)’s shipping position revealed that five vessels arrived the port with 147,045 tonnes.

 

Two of the vessels were moored at Apapa Bulk Terminal Limited (ABTL) with Desert Hope laden with 47,898 tonnes and CMB Chikako, 54,001 tonnes. The statistic noted that Marvel and Tokyo Spirit arrived Greenview Development Nigerian Limited at the weekend with 24,535 tonnes and 8,511 tonnes respectively, while Ina Lotte, has started offloading 12,100tonnes at Standard Flour Mills (SFM).

 

In 2020, Morocco and Nigeria imported 4.9 million tonnes and 4.7 million tonnes respectively as consumer food preferences shifted toward wheat products. Flour Mills of Nigeria is the country’s largest flour miller, while other major importers include Dangote, Honeywell, Olam and Seaboard Group.

 

It was gathered that the importers are shifting from its major supplier, the United States to Russia where the price of the commodity has been falling since the beginning of the year due to low patronage by the traditional buyers.

 

 

Nigerian importers prefer Hard Red Winter (HRW), Soft Red Winter (SRW), Hard White Wheat (HWW) and durum varieties. Before the latest development, data released by the United States Department for Agriculture (USDA) revealed that some 936,000 metric tonnes of the grain brands were imported by Nigerian firms from the United States in 2020.

 

It added that the shares of wheat flour for the production of bread, semolina, pasta and others in Nigeria remained at 60 per cent, 20 per cent, 10 per cent and 10 per cent respectively.

 

According to USDA, Nigeria has the capacity to produce less than 1per cent or 55,000 tonnes of the 5.7 million tonnes needed for domestic and industrial consumption despite the Central Bank of Nigeria (CBN)’s policy to restrict forex for wheat importation into the country.

 

However, the Wheat Farmers Association of Nigeria (WFAN) has commended the Central Bank of Nigeria (CBN) for the restriction, saying that the move to deny importers forex would allow local farmers to increase production through the bank’s Anchor Borrowers Programme (ABP). National President of the association, Salim Muhammad, who explained that the country spent $6.1 billion annually importing wheat, said that the check on forex was an impressive policy.

 

He noted that the policy would enable government to unlock the unrealised potenhigher  tials in the wheat subsector.

 

Also, he stressed that the forex restriction policy would give relevant stakeholders the confidence to invest in the wheat sub-sector as the returns on their investments protected.

 

Muhammad said that this season, the association would engage 600,000 farmers, who will cultivate wheat on one hectare each with an expected yield of three metric tonnes per hectare, which would translate to 1.8 million metric tonnes or N214.03 billion ($455.4 million).

 

Meanwhile, the current deficit experienced in the country has hindered the Federal Government’s plans to cut wheat importation by 60 per cent by 2025 as the country failed to produce 1.5 million tonnes locally per annum.

 

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