Nigeria’s poultry farmers output to drop as CBN bans FX for maize importers

Output in the poultry industry will likely drop this year owing to the recent FX ban imposed by the Central Bank on importers of maize.

The move came at a time the country is experiencing a shortage in maize supply owing to the intensifying effects of climate change experienced in 2019 and the 2020 COVID-19 disruption of the food supply chain.

As a result, there has been a sudden and speedy rise in the prices of maize – a key input in poultry feeds.

Poultry farmers who spend 70percent of their production costs are already struggling to survive owing to the negative impact of the virus and the shortfall in maize supply.

“It has been a difficult moment for poultry farmers since the pandemic and with this action by the CBN to halt access to FX for maize importers, I do not think the poultry industry will survive,” Ibrahim Ezekiel, national president, Poultry Association of Nigeria (PAN) said in a response to questions.

“Our production output is already declining as many poultry farmers are still trying to recover from the initial loss owing to the pandemic,” he said.

He stated that the poultry association is only requesting for a short window to import maize due to the scarcity and sudden surge in prices.

Nigeria had since 2016 impose FX restriction on importers of some 41 items, which maize was included.

But the government in 2016 gave a window for the importation of maize owing to armyworm invasion that led to a sharp drop in the country’s production and since then importers have been importing the crop into the country especially through other West African countries.

Now, the country is faced with a similar situation as 2019 maize production has been estimated to decline by 25percent.

The apex bank says it is enforcing the ban to increase local production, stimulate a rapid economic recovery and safeguard rural livelihoods, which had been negatively impacted amid the COVID-19 pandemic.

But industry players in the poultry subsector have criticized the decision saying that the industry which is already on the brink of collapse will not survive the current market situation if the country fails to open a temporary window.

Alfred Mrakpor, chairman, Poultry Association of Nigeria – Delta State chapter said the poultry industry is in a dire situation as a result of the scarcity.

“The rising cost of maize is threatening livelihoods of small businesses in Nigeria. It is not only poultry farmers’ investments that are threatened but other players in the value chain, thus plunging the economy into deeper crisis,” Mrakpor said.

Nigeria, Africa’s second-largest maize producer after South Africa, is churning out 10.5 million metric tons of maize per annum with a demand of 15 million metric tons, leaving a supply-demand gap of 4.5 million MT annually, data from the Federal Ministry of Agriculture states.

Currently, a metric ton of maize in Africa’s most populous nation is currently sold for N160,000 as against N100,000 sold pre-COVID-19, indication a 60 percent increase in price.

However, maize farmers are commending the CBN for the immediate ban on the importation of maize into the country.

“This is a good move by the apex bank as this will now create more market for maize farmers in the country,” said Tunji Adenola, former national president, Maize Association of Nigeria.

“It will spur investments in the maize value chain as more investors will focus on the subsector,” Adenola said.

Similarly, Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited, says that the situation will be tough for poultry farmers and the country at large but it is for a better tomorrow owing to the FX volatility.

“We cannot continue to export maize to the detriment of our own farmers. We know the situation is difficult at the moment but it will only be for a short term,” Balogun said.

“It is short term thing for a long term gain. We need to bear the pains now for the long term gain especially with the negative impact of the pandemic and FX volatility,” he added.