The Nigerian government is expected to be under pressure to dust off its cassava flour policy as India, the second-largest producer of wheat, has banned the export of the grain, sending global prices to new peaks.
The rise in wheat prices is coming amid an already tight supply of the commodity that has hit Nigeria, Africa’s biggest economy.
Futures traded in Chicago rose as much as 4.12 percent to $12.47 a bushel on Monday, their highest level in two months, according to future quotes on the CMEgroup website. Wheat prices have risen more than 60 percent year to date, mainly driven by the Russian-Ukraine war.
India has filled a gap in the international market created by the decreased output induced by the war in the Black Sea region, which accounts for almost a third of the world’s wheat export.
Industry sources and analysts say the ban by India would send the global prices of the grain to new heights, and could compel the Nigerian government to back to the abandoned policy on cassava flour, a close substitute for wheat.
“With India enforcing an export ban on wheat, prices of wheat will further surge and this is bad for Nigerians and Africans,” Ayo Olubori, former chairman of the National Cassava Processors and Marketers Association, said in a response to questions.
“It will force the Nigerian government to rethink the cassava flour inclusion policy it abandoned as it hopes to control inflation and alleviate the suffering of its citizens,” he said.
He lamented the neglect of the cassava flour policy, saying “Imagine the jobs that would have been created if the policy was sustained? We would have had a thriving industry that would have been exporting cassava flour and earning forex.”
Ayodeji Ebo, managing director and chief business officer of Optimus by Afrinvest, called on the country to start looking inwards and leverage its opportunities as a top cassava producer.
“We need to start looking inwards by revisiting the cassava flour inclusion policy. This will enable us to reduce our wheat imports dependency and control inflation,” he said.
Efforts at boosting the country’s local wheat production in recent years have been hampered by the Boko Haram insurgency in the North-Eastern region, as farmers in Borno, the country’s major wheat-producing state, had abandoned their farmlands and fled to other regions for safety, while some stay at the internally displaced persons’ camps.
Amid the current global wheat crisis, analysts say the Nigerian government is faced with choices – to either invest massively in wheat production or to look for cheaper alternatives like cassava and orange-fleshed sweet potato (OFP) as substitutes for wheat.
The former will take time as the country has not been able to significantly increase its wheat production, despite millions of naira invested across the value chain in recent years.
The United States Department of Agriculture estimates Nigeria’s wheat production at 90,000 metric tonnes in the 2021/2022 season, the most recent data on the country’s wheat production.
This figure represents less than 20 percent of total annual demand, estimated at 5 million metric tonnes by the Nigerian agricultural ministry in 2018. This means Nigeria is left with the option of looking at cheaper alternatives.
Kenya, Egypt, the Democratic Republic of Congo and Cameroon are already blending cheaper alternatives such as sorghum, OFSP and cassava into their loaves of bread, pastries, and pastas as wheat prices continue to surge.
“Currently no flour miller in the country is including cassava in their flour as we speak. The cassava flour has been abandoned since Buhari’s administration. What we do is to buy cheaper wheat from the Black Sea region and blend it with quality wheat from the United States and Canada,” said Jude Okafor, national publicity secretary of Association of Master Bakers and Caterers of Nigeria.
“Our local production is still low, and we need to start looking at alternatives such as cassava flour and the orange-fleshed sweet potato flour to help control the price,” Okafor said.
“As we speak, there is going to be another round of price increase in bread because there is a daily increase on the prices of flour, and bakers cannot carry the extra cost but pass it to the consumers. This constant increase has forced many bakers to close up,” he added.
Inflation in Africa’s most populous country accelerated to 16.8 percent in April, the highest in eight months. Food inflation hit 18.37 percent, the highest in seven months, with analysts expecting more acceleration in May on the back of the further surge in wheat prices.
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“If we fail to start looking at other cheaper alternatives, the implication is that the demand for FX will further increase and inflation will further accelerate.”
The Nigerian government had in 2002 kicked off the flour initiative when it mandated flour millers’ to substitute five percent cassava flour in wheat flour meant for baking bread and production of other confectioneries to reduce its wheat importation.
In 2007, the policy, which was already gaining momentum, was abandoned after the Obasanjo-led government left office, thus bringing the whole policy process to a halt.
After five years of being abandoned, in 2012, former President Goodluck Jonathan re-introduced the cassava flour inclusion policy to encourage the substitution of high-quality cassava flour for wheat flour and the inclusion rate increased steadily from 10 percent to 40 percent by 2015.
Nigeria currently imports 98 percent of its wheat needs and the grain is the second most imported item in the fourth quarter of 2021, accounting for 6.69 percent of total imports for the period.
“If we had continued with the policy when it was initiated, we would have doubled our cassava production by now. But because we failed too, turning to cheaper local alternatives right now means prices of the tuber will surge and prices of garri and fufu will also increase,” Olubori said.
