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...