Nigeria to continue relying on grain imports despite imposed restrictions

Image Source: World Grain

NIGERIA – Nigeria to continue relying on imports of grains i.e. wheat, corn, rice to meet its national requirements in Market Year 2020/21, according to a Global Agricultural Information Network (GAIN) report from the US Department of Agriculture (USDA).

This dire situation is triggered by COVID-19 restrictions, currency devaluations, insecurity, and climate change, further contributing to the country’s lower grain production in the out-year.

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The report has further highlighted that despite the country trying to meet the local demand through imports, Nigeria’s ineffective trade policies are constraining local food supply chains, elevating food inflation and increasing pressure on food security.

Nigeria’s agricultural policy prioritizes domestic food and agricultural production through protective trade policies amid low productivity.

Earlier in August 2019, Nigeria’s President Buhari ordered that borders with the country’s neighbours be closed mostly to prevent imported food from entering Nigeria.

One year later, in September 2020, President Buhari called for a ban on dollars for food imports and adding fertilizers in the restricted items.

This action is, as highlighted by the report is forcing importers to source dollars at higher rates through the parallel markets adding to the cost of the grain to consumers.

With food inflation skyrocketing coupled with heightening unemployment, and lowering household incomes, consumption of grain is expected to reduce during the period.

Other than barring of imports, the country’s revenues are declining due to falling oil prices which has in turn constrained farmers’ access to funds, including the availability of Anchor Borrowers Program (ABP) funds.

Wheat production to decline by 8%

Domestic wheat production is forecast to fall 8% to 55,000 tonnes in the period under review.

In Nigeria, farmers do not live on wheat farms and wheat is usually planted in November and harvested in April. The COVID-19 lockdown across the country that began on March 30, 2020, restricted access to wheat farms and in turn resulted in higher post-harvest losses, the USDA said.

Wheat imports are expected to total 4.9 million tonnes in the 2020-21 marketing year, a decline by about 6% following government’s foreign exchange restrictions.

Consumption of the grain on is forecast at 4.5 million tons (MT), a decline by 8% compared with the previous year.

Corn imports to rise by 25%

For corn, USDA expects the country’s production to decline 13% to 9 million tonnes.

Supply shortfalls due to COVID-19 pandemic lockdown, currency devaluations, increasing insecurity and flooding events are expected to pressure the GON to increase corn import approvals during the marketing year.

Post forecasts the periods Imports at 500,000 tons, about 25% increase compared to 400,000 tons recorded each of the last two marketing years.

According to the Nigerian poultry industry, it would need to import 5.6 million tonnes of corn to meet the feed demand in the 2020-21 marketing year.

The USDA said Nigeria is challenged by lack of storage capacity and import suspension put in place in July 2020. The USDA’s current corn import forecast is based on the approved import volume.

Rice consumption to reach 6.8m tons

Rice production is expected to total 7.8 million tonnes in the 2020-21 marketing year, a 3% dip compared with the previous year.

COVID-19 measures restricted access to rice farms during the March-April planting period.

Nigeria’s rice imports are expected to increase slightly for the 2020-21 marketing year to 1.75 million tonnes, which compared with 1.2 million tonnes exported in 2019-20.

This is as Nigerian rice consumers still prefer parboiled long grain rice from Thailand and India, which continues to enter the Nigerian market through grey channels and are freely sold in the dominant traditional open-air markets and street/corner shops.

Rice consumption is projected to reach 6.8 million tons, 6% higher than USDA official forecast of 6.4 million tons the same year.

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