NIGERIA – Crown Flour Mills, Nigerian subsidiary of multinational food and agribusiness company Olam International, has received approval from the Federal Ministry of Industry, Trade and Investment to import 500,000 mt of wheat from India.
The milling company has further secured the support of the government on its request, as the ministry has also on its behalf written to the High Commissioner of India in Abuja to consider the business’ importation request.
In the light of the cordial relationship between both countries and the Federal Government’s endorsement, the Indian High Commission has further officially communicated the ministry’s request to the Directorate General of Foreign Trade in India.
Speaking about the move to booster its wheat supply chain, Ashish Pande, the Managing Director, CFM, said, “As a highly productive company and contributor to Nigeria’s food security agenda, we strive consistently to provide affordable and healthy food for the populace.
“The disruption to the global wheat supply chain and challenges on the local front call for urgent alternative actions. The endorsement by the Federal Government will help us proceed to the next level of the arrangement to bridge the local wheat supply shortage.”
Successful completion of the project will be supported by the recent US$200m loan financing issued to CFM’s parent company Olam Agri, the food, feed, and fibre agribusiness subsidiary of Singapore-based Olam Group.
Olam to strengthen food security with US$200m financing
The financing packaging has been issued by the International Finance Corporation (IFC), the largest global development institution focused on the private sector in emerging markets to enable Olam Agri deliver millions of tons of staple foods to developing countries, potentially feeding over 40 million people at a time of heightened food insecurity around the world.
The loan will be used to finance the purchase of wheat, maize, and soy from Canada, Germany, Latvia, Lithuania, the United States and other leading commodity suppliers for delivery to the company’s processing operations and customers in developing countries that rely heavily on imports of these staple foods.
These include Nigeria, Bangladesh, Cameroon, Chad, Egypt, Ghana, India, Indonesia, Pakistan, Senegal, Thailand, and Turkey.
The project is part of IFC’s global efforts to address food insecurity, especially for poor and vulnerable populations that have been hit hard by food inflation.
Food prices have risen significantly over the last two years, driven by the impacts of COVID-19, adverse climate events, and the war in Ukraine.
The number of food-insecure people in the world has been rising every year since the beginning of the pandemic, with more than half of countries globally experiencing a worsening situation.
An estimated 928 million people were severely food insecure in 2020, according to the Food and Agriculture Organization of the United Nations, an increase of 148 million from 2019.
The situation has been exacerbated by the war in Ukraine, which has impacted exports from the Eastern European country and Russia, which collectively produce a large share of key food commodities including wheat and maize as well as energy, fertilizer, and key components of fertilizer production, resulting in rising production and transportation costs.
Poor climate conditions and droughts in key producing countries including Argentina, Brazil, and the United States have worsened the outlook, driving calls for action from the public and private sectors.
The loan to Olam Agri will further support flows of key food commodities to developing countries, which have been reliant on sourcing from the Black Sea region.
The goal is to help ease food price inflation particularly in fragile, conflict-affected, and poorer countries that are net-food importers, which are among the worst affected, and where food purchases comprise an outsized share of disposable incomes.
“This facility further supports us to continue to supply staple crops and ensure food security to some of the most populous countries in Asia and Africa most at risk of global food inflation.
“We’re delighted to continue our long-standing partnership with IFC, aligning with Olam Agri’s focus on better access to food and nutrition for the most vulnerable and on strengthening global food security,” said N. Muthukumar, Chief Executive Officer, Operations at Olam Agri.
On the local front, CFM continues to play its role in the development of the wheat value chain in Nigeria through various intervention initiatives and massive investments under the auspices of the Seeds for the Future Programme as an organization and through the joint efforts of the Flour Milling Association of Nigeria (FMAN), Wheat Development Programme.