The Nigerian Wheat Market
Olatunde Takes
Wheat, a cereal grain which is a staple food in most countries worldwide; which when milled by flour millers is processed into flour which is used in producing final wheat-based products like Bread, Noodles, Pasta, Semolina and biscuits etc. Wheat is grown in dry season in the north-eastern part of Nigeria (Borno, Yobe and Jigawa states).Nigeria grows a specific class wheat, hard wheat specifically used for bread production however can be used for other wheat-based products.Wheat based products are one of the largely consumed staple foods in Nigeria. The entrants of noodles and pasta steadily gaining stronger competition against bread and other wheat based products in the country has resulted in increasing yearly wheat consumption by Nigerians; the growing population getting to acquainted with “on-the-go foods” such as (noodles and pasta) quick to prepare.
The Nigerian wheat market as a result of high cost of production, low seed varieties, insufficient funding and inadequate irrigation has made local wheat unable to meet up to its country’s wheat expectations. In 2018/2019, Nigeria wheat consumption according to FAS was recorded at 5.26 million MT which had grown by 2.56% from 2015. The Nigeria government intervened in the local wheat production and therefore wheat farmers production increased slightly from 60,000 MT to 200,000 MT in 2019/2020 which barely scrapped the surface of the yearly wheat consumption in the Nigerian market. Local wheat is also sold at a premium as compared to wheat imported from abroad even with tariffs imposed on imported wheat. Local wheat is sold at $500 which is at a premium of at least $100 to imported wheat from various regions. Nigeria with its growing population will further increase wheat consumption even more.
The Flour Milling industry is the major benefactor of wheat production and responsible for milling of wheat into flour. To close the gap on wheat consumption on a yearly basis, the flour Milling industry which comprises of (Flour Mills of Nigeria ,OLAM Crown Flour Mills, Honeywell Flour Mills, OLAM Dangote Flour Mills, DUFIL Pure Flour Mills, and BUA IRS Flour Mills etc) purchase wheat from abroad; Nigerian Milling industry import wheat from various country such as the United States, Russia, Canada, Australia, Argentina and the likes. Majority of wheat used for wheat-based products in the country are imported from abroad and minimal amount of local wheat grown is added to production/milling process.
The Central Bank of Nigeria(CBN) rolled out various initiatives like the Anchors Borrowers Program which help fund farmers of various crops including wheat. The Nigeria government through its initiatives invest more in areas of technical knowhow, seed breeding and better farming practices. In addition, the government is also looking into re-educating of all local farmers in Nigeria; agribusiness owners; Oxford, Babbangona have partnered with Flour Millers Association of Nigeria (FMAN) to empower 800 small-scale wheat farmers through its out-growers scheme to boost yearly wheat production.
In conclusion, the Nigeria government should emanante the United States and Russia wheat market as a case study as both nations grew to be one of the biggest exporters of wheat globally as a result of calcuated effort with immense funding in technical expertise and great seed breeding. Nigeria can turn around the narrative to their advantage and therefore save millions in foreign exchange spending from importing less wheat in the long term.
