Nigeria’s wheat demand surges as garri, rice prices spike

Nigeria’s year-on-year wheat importation has risen by 47.4 percent as prices of close substitutes – garri and rice spike at a faster pace, making semolina, pasta and noodles form a regular part of meals in most urban and rural households across the country.

Data from the National Bureau of Statistics (NBS) show that the country imported N258.3 billion worth of wheat in the first three months (Q1) in 2021 as against N127.9 billion in the same period in 2020, a 102 percent increase in value.

Going by the $227 monthly average price of wheat for the period per ton, according to the Food and Agricultural Organisation (FAO), with an exchange rate at N410 to a dollar, Nigeria imported a record 2.8 million metric tons (mmt) of the grains in Q1 2021 (N256.3bn divided by N410, which is equal to $625m). To get the volume of imports for the period, $625 million is divided by $227, which is equal to 2.8mmt, as against 1.9mmt in Q1 2020, a 47.4 percent rise in volume.

“There is a surge in the demand for semolina, pasta and noodles as consumers are consuming more wheat-based foods because it is cheaper when compared to rice, garri, and others,” according to AfricaFarmer Mogaji, CEO, X-Ray Consulting Limited.

“It is cheaper to buy semolina than to buy garri currently,” he notes.

“To meet up with the rising demand, flour millers are importing more wheat,” Mogaji explains.

Africa’s most populous country has seen prices of all locally grown staple foods spike in recent months without any sign of ending soon amid a weak consumer wallet that has reduced spending, thus forcing consumers to resort to cheaper commodities.

BusinessDay survey in Mile 12 Market in Lagos shows that a 60kg of yellow garri currently sells for N19,000 as against N9,600 sold in December 2020, a 97 percent rise in price.

While a 60kg of white garri currently sells for N18,000 as against N9,000 sold in December 2020, a 100 percent increase in price. Traders attribute the surge to the scarcity of cassava tubers in the market.

Prices of wheat-based foods are also surging but not as fast as its close substitutes.

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A 50kg bag of wheat flour now sells for N15,500 as against N12,800 sold in January, while a bag of a 10kg bag of semolina now sells for N4,200 as against N3,800 sold in January, a 21 percent and 10.5 percent increase in price, respectively.

“Prices of raw materials are rising from wheat to packaging materials and freights,” notes Lanre Jaiyeola, vice chairman, Flour Milling Association of Nigeria, in a telephone response to questions.

“FX has also gone up substantially. We got N365 to a dollar last year but now we are getting it for N510. All these are factors responsible for the increase in flour prices,” he notes.

He states that before the COVID-19 outbreak, it costs $25 to freight a metric ton of wheat but now it costs $36.

Nigeria imports 98 percent of its wheat and the grain is the third most imported goods in Q1 in 2021, accounting for 3.77 percent of total imports, mainly imported from Lithuania and Latvia – countries known for producing poor-quality wheat.

Nigeria, despite being a major market for a species of wheat known as ‘hard red winter,’ it locally produces 400,000 metric tons per annum, a figure that is 5.3 million short of total demand, according to data from the Flour Milling Association of Nigeria.

According to experts, there is also a growing demand for soft red winter for biscuits and cookies; hard white wheat for bread and noodles, and durum wheat for pasta in Nigeria.

Wheat production in Africa’s biggest economy has remained relatively low as lack of modern agronomic practices, unavailability of improved seeds, and high rate of insecurity across major wheat growing states continue to hamper the production of the commodity.

The national average yield for wheat still remains at one metric ton per hectare.

Salim Mohammed, national president, Wheat Farmers Association of Nigeria, says the domestic production of wheat has suffered from lack of policy support and the perception that Nigeria cannot competitively produce wheat.

Mohammed calls for more government intervention in the wheat value chain, noting that wheat should be given the same focus as rice since the country also spends millions of naira yearly in importing the grain.

He further emphasises the need for synergy among the agricultural stakeholders in the sector.