• Thursday, March 28, 2024
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Why FX ban on starch, ethanol importation matters

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Despite being the world’s largest cassava producer, Nigeria is among the top global importers of cassava by-products such as starch, flour, and ethanol.

The country has failed to take advantage of its cassava production as it spends millions of dollars yearly importing these cassava by-products thereby putting pressure on Nigeria’s foreign exchange reserves.

Also, importing thousands of jobs it could have created if entrepreneurs are tapping into the opportunities in crop production.

A 2017 sectorial report by the Manufacturers Association of Nigeria (MAN) showed that the country imported a $654 million (N235.4 billion) worth of cassava by-products that year.

The breakdown shows that Nigeria’s demand for starch is put at 600,000MT and supply is 24,000MT with imports accounting for 576,000MT (96 percent) yearly.

Also, local demand for HQCF is put at 504,000MT and supply is 60,480MT, with importation accounting for 443,520MT (88 percent) yearly.

Similarly, ethanol demand is put at 350 million MT and local supply is 10.5 million MT, while imports accounted for 339.5 million MT (97 percent) yearly.

Experts say the recent Federal Government’s FX restriction to importers of starch, ethanol, and HQC will spur massive investment in the cassava downstream value chain.

Also, they stated that with such investments, the country will create jobs for its teeming youth population.

Nigeria is the largest producer of cassava in the world with about 46 million metric tonnes and an average yield per hectare between 10.6 to 15 metric tons.

“Nigeria mostly operates in the upstream cassava sector rather than the downstream, which limits advantages the country can get,” AfricanFarmer Mogaji, CEO, X-Ray Farms Consulting Limited, said.

“We need to start harnessing the potentials in the cassava by-products and I believe with the recent FX restriction we would start seeing investments in the downstream,” Mogaji said.

Cassava has major industrial products like industrial starch, ethanol, flour, glucose syrup, sweeteners amongst others.

These products are also raw materials for numerous industries with limitless domestic and export market potentials.

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Starch is used in many areas across food and beverage firms for the production of caramel, biscuits, bread, and confectioneries. It is also used in pharmaceuticals and in non-food industries such as battery firms, gum, and super glue, among others.

Tapping the investment in the cassava downstream value chain is Union Dicon. The company is showing massive interest in starch, having acquired 15,000 hectares of land in Ebonyi to produce cassava, starch, and other food products.

Nigeria industries have continued to import starch, flour and ethanol in large quantities as they claim that not much local starch and flour meet their standards, saying that the market has failed to constantly supply high-quality starch and flour.

“Nigerians are ignorant about the opportunities in the cassava value chain. Nigeria currently imports over 95 percent of industrial starch used in the country,” said Segun Adewunmi, president, Nigeria Cassava Growers Association (NCGA).

“Currently, industrial starch sells for over N200, 000 per ton which means we can generate N10 trillion annually from cassava production,” Adewunmi said.

He said many cassava processing industries in the country have collapsed due to inadequate, irregular, unaffordable all-year-round supply of cassava.

The biggest challenge confronting farmers is low yield per hectare.

“Farmers are not getting the yield they are supposed to get and this makes them not break even. If the production of cassava is not attractive, farmers will not expand their production areas,” said Abdulai Jalloh, project leader, African Cassava Agronomy Initiative.

He said that some of the limiting factors to increased productivity in cassava production are poor weed control and high cost of farm inputs.

Research across the globe shows that some countries have started using micro-nutrients to upscale cassava yields to about 100 metric tonnes per hectare with starch content of cassava up-scaled to 38 percent in Indian and 40 percent in Malaysia.

Jalloh stated that if Nigeria must take advantage of the high potentials in cassava production; farmers need varieties with high starch content, adding that the government must initiate policies that would boost cassava production in the country.

Cassava requires less labour than all other staple crops. However, it requires considerable post-harvest labour because the roots are highly perishable and must be processed into a storable form soon after harvest, experts say.

 

Josephine Okojie