Steady import level fails to impress farmers in local wheat production
Nigeria is one of the African countries that will not make a 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 stakeholders in local wheat production are unimpressed, saying it will not amount to better demand.
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 notes.
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 says, but farmers in wheat production consider it inconsequential as a combination of uncompetitive pricing, poor production conditions and quality variation constitute setback.
They 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 want it reduced drastically before the year 2030,” Salim Saleh, president, Wheat Farmers Association of Nigeria, told BusinessDay.
“Agriculture needs a thorough team that can drive it. If we don’t have this team and we just allow the ministry to be under the leadership of a minister alone can determine the fate of over 200 million people,” he said.
Nigeria’s wheat imports within 2018 to 2019 marketing year were forecast at 5.4 million metric tons, up 4 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.
Wheat is an important commodity that is essential in flour, which is used in processing bread, biscuit and other food items generally consumed.
Nigeria’s wheat production yield has been a struggle between 2.1 and 2.5 tons per hectare.
A generally upward movement in international prices of wheat in 2018 has given way to a declining trend since March 2019. At the start of this year, wheat prices were affected by less than ideal weather during harvesting in Argentina and Australia.
Wheat woes were further compounded by reports of historically low winter wheat seeding in the United States of America and rising concerns over tightening exportable supplies in the Russian Federation.
These conditions combined to push February prices up to their highest level since October 2018.
But in March wheat prices started to drift lower, influenced primarily by continued large sales from Russia and a favourable outlook for crops to be harvested this year, especially among the major exporters. The benchmark United States of America wheat, Hard Red Winter, averaged $213 per ton in April, over 10 percent below its level at the start of the current year and also the same period last year, FAO says.
The forecast for global wheat production in 2019 is pegged at 767 million tons, nearly 37 million tons above last year’s output and, if confirmed, it would set a new record.