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Nigeria to import N319.8bn raw sugar from Brazil

CHALLENGE

Smuggling has impeded sugar production under backward integrated programme

 

 

There are indications that Brazil would supply 80 per cent or 1.44million tonnes of raw sugar valued at N319.85billion ($680.55million) to Nigeria in 2021. Nigeria is currently battling with sugar production deficit of 1.81million tonnes valued at $850.7 million as global price surges to $407 per metric tonnes.

 

Brazil’s production has already increased by more than 44.2per cent to meet demand from Nigerian and other buyers. It was gathered that high sugar price in 2021 would further encourage producers to keep maximising production to supply the deficit in  global market.

 

The Federal Government had targeted 800,000 tonnes of raw sugar production by 2022 but had not met five per cent of the target as at December 2020. It was revealed that Nigeria had a deficit of 1.81million tonnes following massive smuggling through the porous borders.

 

Nigeria has capacity to produce only 75,000 tonnes; it needed 1.88million tonnes as against 1.89 million tonnes in 2020 to meet consumption. Sugar is not among the food products affected by foreign exchange access restriction by Central Bank of Nigeria (CBN) because of the incentive granted to local sugar firms under the backward integration programme of the Federal Government. Brazil exported $520.18million in 2018 and $545.75million in 2019 as demand continues to rise.

 

In December 2020, data from the Nigerian Ports Authority (NPA)’shipping position revealed that two vessels offloaded 91,710 tonnes of raw sugar at the Greenview Development Nigerian Limited Terminal of the Lagos Port Complex.

 

Cledi and Desert Victory berthed at the port with 46,000 tonnes and 45,710 tonnes of the commodity respectively, while a total of 194, 050 tonnes was ferried to the port by four vessels the port with Desert Hope leading with 52, 350tonnes; SBI Bravo, 49,000tonnes, Almasi, 46,400tonnes and Genco Provence 46,300tonnes.

 

Between 2016 and 2020, the National Sugar Development Council (NSDC), through the National Sugar Master Plan (NSMP), introduced a 10 per cent duty and additional 80 per cent levy for raw sugar; 20per cent duty and 85 per cent levy for refine sugar imports.

 

Also in 2019 and 2020, refined sugar attracted 10 per cent duty, 30 per cent levy raw sugar imports. In addition, part of the incentives to boost domestic production of sugar include a five-year tax for investors in the value chain; 10 per cent import duty and 50 per cent levy on imported raw sugar; 20 per cent duty and 60 per cent levy for imported refined sugar. I

 

t would be recalled that the Executive Secretary, National Sugar Development Council (NSDC), Dr Latif Busari, had explained that the country was currently producing only five per cent of its total demand, while it depends on importing the rest.

 

He said in Abuja at the signing of “Sugarcane Irrigation’’ agreement between BUA and Netafim that the country would be self-sufficient in refined sugar production by 2023.

 

Busari noted that the agreement would boost sugarcane farming, thereby, providing raw materials for refined sugar production.

 

He said: “We import raw sugar and our refineries which have a combined capacity of about three million metric tonnes refining capacity. Dangote, BUA and Golden Sugar import raw sugar, add a bit of value and in the process create some few jobs.”

 

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