The foreign exchange scarcity has pushed up the price of imported seeds by 50 percent, thereby creating a $429.2 million (N332.8 billion) opportunity for local seed companies willing to expand capacity and introduce new improved seed varieties to make profits.
Domestic seed demand currently stands at 394,294 metric tonnes (MT) as against the local production capacity of 93,306.54 MT, leaving a demand-supply gap of 300,987.9 MT, according to the National Agricultural Seed Council (NASC).
In monetary terms, Nigeria’s production capacity is valued at $564 million, according to NASC, while the demand-supply gap is $429.2 million, according to BusinessDay’s calculations of the percentage of the gap to the total value.
“The continuous surge in the prices of imported seeds is an opportunity for local producers who are willing to scale production and introduce new improved seed varieties as farmers are looking for ways to reduce their production costs,” Antony Job, an independent plant breeder, said in a telephone response to questions.
“The local seed companies must come up with new seed varieties that can compete with the imported ones. With this, they can create new market opportunities and reduce the demand for imported seeds, thereby reducing pressure on FX,” Job said.
According to him, the opportunities are more in the vegetable value chain where the country still imports about 90 percent of its seed requirements.
“Currently, no local seed company produces hybrid seeds for vegetables in the country. This opportunity can allow them to invest in vegetable hybrid seeds,” he said.
Nigeria has local seed companies such as Premier Seeds Nigeria Limited, Maslaha Seeds Nigeria Limited, West African Cotton Company Limited, Notore Seeds Limited, Candel Seeds Limited, and Alheri Seeds Nigeria Limited, among others.
The number of seed companies in the country increased from five in 2011 to more than 314 today, according to data from NASC.
BusinessDay findings show that the prices of these seeds have gone up by between 20 and 50 percent owing to the country’s FX scarcity, a situation experts say would threaten the country’s crop production capability in the coming planting season.
“Most of the seeds in the market today are imported. With the scarcity of foreign exchange, the price of seeds has gone up by between 20 and 50 percent, depending on the varieties,” said Abiodun Olorundenro, operation manager at AquaShoots Limited.
He said Nigeria ought to be self-sufficient in seed production by now, considering the number of research institutes and schools of agriculture in the country.
He said the increase recorded in the price of farm inputs, especially seeds, would affect the prices of food items across the country.
A BusinessDay survey at some seed distributors in Lagos shows that a 5grams bag of Diva F1 (tomato seeds) sells for N7,500 as against N5,000 in January. The 5grams bag of Padma (tomato seeds) sells for N7,000 as against N5,500 at the beginning of the year.
Ansal F1 5grams bag of tomato seeds from Bayer sells for N20,000 as against N10,000 in January.
A 50grams bag of Avenir F1 (pepper seeds) sells for N50,000 as against N41,000 in January, while a 50grams bag of Antillais (pepper seeds) sells for N30,000 as against N22,000 in January.
An 11.1 kg of Dupont pioneer hybrid maize seeds now sells for N65,000 as against N45,000 a few months ago. Tokyo F1 5grams cucumber seeds now sell for N6,000.
Read also: Market Inferno: Fire destorys seeds worth over N150m in Nasarawa
AfricanFarmer Mogaji, chief executive officer of X-ray Consulting, said, “Local seeds producers and the research institutes can produce enough seeds without the country having to import, if they can be adequately funded.”
“Local seed companies require long-term funding to invest in research and development, and money deposit banks don’t give such loans,” he said, noting that globally, governments create special loans for seed companies.
In 2021, the federal government signed the Plant Variety Protection into law to accelerate investment in the industry and give farmers more access to quality seeds.
But not much progress has been made since the law was signed as breeders still do not get adequate compensation for their work. “It is still at an infancy stage as it is supposed to make commercialisation of seeds. Breeders are still not compensated for their work,” Job said.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
