Steady import level fails to impress investors in local wheat production

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Nigeria is one of the African countries that will not make significant contribution to the forecast of an all-time high of 49.3 million tons in total wheat imports to Africa between 2019 and 2020, yet this will not translate to increased demand for investors in local wheat production.

Nearly all of the projected increase in Africa’s import will be concentrated in two countries facing reduced production prospects this year – Algeria and Morocco, the Food and Agricultural Organisation’s Biannual Report on Global Food Market says.

Nigeria’s wheat imports within 2018 and 2019 marketing year were forecast at 5.4 million metric tons, up four percent from the import figure of 5.2 million metric tons. In the same year, wheat accounted for N362.4 billion, marking 42.5 percent of the N852 billion agricultural goods imported into Nigeria.

Demand for Wheat in Nigeria is 4.7 million metric tons but local production drags at 60,000 metric tons, leaving a deficit of 4.64 million metric tons.

Imports by Algeria are forecast to rise by 10 percent to 7.7 million tons while Morocco’s imports could surge by as much as 42 percent to reach 4.7 million tons based on an anticipated 25 percent drop in domestic production.

“Wheat shipments to most other major destinations in Africa are likely to remain steady at around the 2018/19 levels,” FAO said but stakeholders in wheat production consider it inconsequential as a combination of uncompetitive pricing, poor production conditions and quality variation constitute setback.

Analysts believe current times are not the best to invest in local wheat production because the local market hardly benefited from huge industrial demand. Producers have had to rely on open markets to recoup their investments.

“Until it is reduced, nothing will come out of a steady level of import. We Read More...

Huawei set to launch own mobile operating system amid sanctions from Google

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Amid intense rift with the United States, Huawei said it will roll out its own mobile phone operating system “very quickly” if its smartphones are cut off from Google’s Android software.

Huawei currently the world’s second-largest smartphone maker is facing the prospect of being shut out of the world’s most popular smartphone operating system after being placed on a “banned entity” list.

Huawei, which last year sold 200m phones, promised its customers that their current phones would continue to work, and have access to Google’s Play Store to buy apps. These phones are certified so that Google can provide them with updates and downloads without going through Huawei

Google had announced that they will be blocking Huawei devices from accessing their services. The US government temporarily eased some of the restrictions on Huawei which means for the next three months, the company is allowed to purchase US-made goods and provide software updates to existing Huawei handsets.

What does this means?

About a quarter of all phones sold in the UK are made by China’s Huawei and based on the Android operating system owned by Google. Globally, Huawei had nearly 19 per cent of the smartphone market in the first quarter of this year, according to Canalys, making it the second-biggest seller behind Samsung.

This move means Google is no longer going to provide technical support and collaboration for Android and Google services to Huawei. Also, Android updates only come to the open-source version a lot later than the licensed one. This is particularly concerning when it comes to security updates.

Also its future smartphones may lose access to apps including YouTube, Gmail and Maps, and to the Google Play store and to security updates. This is likely to have a severe effect on their attractiveness to … Read More...

Consumer goods firms settle for “half-loaves” as cash margin shrinks

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Players in the consumer goods space opted to trade more cash for credit in the first three months of 2019 in a bid to enjoy better customer patronage and bolster their shrinking revenue base.

In the first quarter of 2019, efficiency of consumer gods firms in generating cash from sales dipped, according to data compiled from company financials, as the manufacturers settled for ‘half a loaf’ in getting their products off the shelves into households.

Analysis of the operating cash of ten (10) players including Cadbury, Nestle, Vitafoam, Nascon, Dangote Sugar, Dangote Flour and Champion Brewery among others, revealed that cash flow to revenue turned negative to -37.54 percent in the first quarter of 2019 compared with 21.40 percent a year before, signalling worsened cash efficiency.

According to Yinka Ademuwagun, research analyst at Lagos-based United Capital Plc, consumer goods firms are embarking on aggressive credit strategy to retain their customers and boost top-line growth knowing fully well that customers’ wallets are stifled.

“Consumer goods are facing a hard time. Any firm that can’t sell cheap or on credit in this current weak consumer wallet will suffer. That is why most of them are extending credit.”

Of the ten players covered in the analysis, only Nigerian Breweries recorded better cash margin of 8 percent in the review quarter as cash flows from operating activities of the beer maker outpaced top-line growth.

The operating cash margin measures how firms are able to generate cash from every naira sales they make. It is obtained by dividing a company’s revenue or sales over a period by how much operating cash the said firm was able to make in the same period.

A higher figure shows that a company was able to convert a higher proportion of its sales to … Read More...

Mojito, Long Island Iced Tea, others top choice of cocktails at events

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Nigerian’s love for leisure and entertainment are drawing in Mojito, Long Island Iced Tea, Strawberry Daiquiri, Kiwi delight and Irish Empire as top choices for cocktails at wedding ceremonies, birthday parties and business events.

A cocktail is an alcoholic drink, mixed either with one type of alcohol with juices, as soft drink and other fruits or as multiple alcoholic drinks with juices or ice tea. The cocktail business is under the industry of event management and hospitality. And usually you see bartenders who help to mix cocktails.

According to cocktail vendors and bartenders, the preference for these is due to its sweet and unique taste.

Ayoade  Adesanya, a partner and chief executive officer, Aplusdrinks, said “They are in high demand due to the unique and nice taste it gives.”

Akintunde Shenbanjo, chief executive officer, Chill Park Cocktail & Drinks said that whenever he has an event, his customers would check for his menu list for these drinks and most of the time they would prefer  Mojito and  Long Island Iced Tea and if the drinks are not on the menu, they request for it.

Bartenders say the prices of these drinks usually range from N1, 000-N4, 000.

Cocktail is also any beverage that contains two or more ingredients if at least one of those ingredients contains alcohol. It is said that cocktail was derived from the French word “coquetier”, referring to an eggcup-type measure.

Mojito consists of five ingredients that include sugar or sugarcane juice, lime juice, soda water, mint and white rum. It is best served and consumed in Collins glassware garnished with a sprig of mint and lemon slice.  Although there may not be a very clear history of origin but it is believed that it is one of the first cocktails Read More...

Food prices decline in Q1 2019 on weaker purchasing power, natural conditions

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Prices of twenty-four commodities including rice, tomato, yam tuber and maize, declined marginally for two straight months to March 2019, on weaker purchasing power and natural factors.

For instance, the one dozen of medium-sized Agric eggs trended southwards from N469.8 in January to N459.8 in March. 1Kg of Brown Beans declined to N368.1 from N382.7

Also, 1Kg of fresh Catfish (Obokun) declined from N1073.5 to N1065.1, 1Kg of Irish potato fell from N290.6 to N278.9 and 1Kg of Onion bulb inched lower from N257.9 to N231.9.

Mogaji African Farmer, Consultant Farmer, X-ray Farms consulting agreed with the NBS data and attributed it to low demand from consumers and low food production.

“Prices are reducing but marginally and I guess that people are not buying because the purchasing power of people is dropping. One of the things I noticed during Easter was that prices of food items did not really go up,”

“There were fears of political unrest and crises as a result of elections that made farmers feel that they may not sell, and most microfinance banks did not give out loans to them because they did not want to take that risk. Every election year, there is always a decline in production and productivity,” Mogaji further said.

The country’s per capita income has been on a decline since 2014. According to the International Monetary Fund (IMF), per capita income data in Nigeria declined to $1,994 in 2017 from $3,268 in 2014.

“There has been a lot of investment in agriculture, in the Northern part of the country which has made a lot of irrigation systems to be revived so there is a lot of supply of food and it is coming down here. And also purchasing power has been weak, so people have Read More...