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NigeriaDecides2023

We see opportunities in Nigeria and have positioned to support growth– USSEC CEO

The ‘Nigeria: Now Conference’ was recently hosted in Lagos by the U.S. Soybean Export Council (USSEC), bringing together, leading U.S. soybean industry leaders and exporters with key industry leaders from the Nigerian soybean value chain. At the event, JIM SUTTER, CEO of USSEC had this interview with BusinessDay’s CALEB OJEWALE, discussing the mission in Nigeria and what the two countries can achieve in the long-term. Excerpts:

In the last five years, what have shipments looked like in terms of soybean from the US to Nigeria? What has the trend been in those years?

Honestly speaking, shipments to Nigeria have been very small. Nigeria is not really a large importer from the United States today; however, we view these (current engagements) as long-term. We think that Nigeria will continue to grow in terms of demand for soy and then we think there will be imports from the United States (or other Origins).

Do you have any insights on what might be responsible for these little shipments considering the large market here?

There isn’t a lot of need for imports today, but as poultry demand increases, so does poultry feed, likewise increase in aquaculture feed demand. With these, Nigeria will need more soy.

As we’ve heard from the Poultry Association of Nigeria, as they look at the future, they believe there will be more (imports) as their feed demand grows. Current production is four million tonnes and projected in four or five years to be about six million tonnes but soy demand (for poultry alone) will grow by two times its current demand.

In China where we’ve done a lot of work over the years (and celebrating our 40th anniversary of working there), when we started doing work there, they produced 10 million tonnes a year and exported maybe three million tonnes. However, (at the time) we thought China had the potential to really grow their internal demand and will eventually become an importer. China today is the largest importer by far in the world even though they’ve doubled their production.

They’ve grown their production from 10 million tonnes to 20 million tonnes, but they’ve also grown their import significantly because of domestic demand. I could see that same thing happening in Nigeria. So Nigeria produces some soy today that is enough to supply their domestic feed needs, but in the future, I see those domestic feed needs really growing.

Maybe domestic production of soy will double or triple, but I think Nigeria will also need to import and that’s what we’re trying to get ourselves positioned for

Maybe domestic production of soy will double or triple, but I think Nigeria will also need to import and that’s what we’re trying to get ourselves positioned for. Such that when they need to import, the industry here knows who we are, knows the suppliers from the U.S, and knows the farmers. So we’ll be a partner and hopefully, we’ll be the partner they choose to import from.

While we’re waiting and hoping for that future, at present we’ve had issues around payments especially access to foreign exchange. From your experience in other markets, have you had places where they had similar challenges? How did they navigate this?

Several markets today are struggling with the fact that the dollar is so strong and economies are in different conditions around the world. We have certainly seen times when the strength of the dollar or foreign exchange issues in a country limit their ability to import so I don’t think Nigeria is unique in that. From what I’m gathering and what I was reading in BusinessDay, the leading presidential candidates have different policy (proposals) in terms of the availability of Foreign Exchange.

When Governor Ayade was speaking this morning, he mentioned prioritizing funding of imports for protein products, like soy, because of the protein deficiency problem here in Nigeria. That is a very serious problem, it is real and it’s hurting the children of Nigeria and I think politicians will become more aware of that.

Using the Chinese example where they grew local production on one hand and became even bigger importers, what do you think Nigeria can learn from what they did?

Virtually all the domestic production in China goes to producing human-used utilized products. So, Tofu, soy milk and other types of human direct consumption, that’s what they use those products for. On the other hand, they’ve grown their meat consumption, which has driven the demand for imported soy to meet their meat production. I think that Nigeria could certainly see the same sort of thing happening.

The other place where there’s probably an opportunity for more soy to be used and more protein to be used is in the dairy industry. Around the world, in places where dairy is becoming more efficient, they’re using more of protein products and soy is a great way to do that.

Nevertheless, the two biggest in Nigeria would be poultry and aquaculture. But then I also think a growing human consumption market and some utilization in Dairy (will boost demand).

Looking at this from a bilateral perspective, do you think there’s any sort of engagement that needs to happen between the Nigerian and the US government, to ensure that it’s seamless to get these shipments into the country and also for payments to be settled without the usual foreign exchange challenges?

I think it’s important that there will be engagement between the Nigerian government and US Government, first to make sure that there’s a good understanding of the specification of the product, the trading rules that this will be done under, and sanitary regulations.

On the foreign exchange situation, there is the USGS program and other financing programs that may be available to importers. I think that is an opportunity and certainly, our US government would be happy to engage with the Nigerian government if they don’t know about it and if they are unaware of how it works.

When people talk about importing grains from the US, they think; ‘is it GM or not GM’. How does this play out in soybean; do they get to decide which one they are bringing into the country?

The US grows both GM and non-GM, and I like to use the phrase that the US is an excellent supplier of choice. We’ve got farmers and exporters that will export GM soy or that will export non-GM soy. So it’s entirely up to the buyer what they want and it really is a matter of choice and also a matter of economics because one is more expensive than the other.

It is also important to say that the GM soy has been on the market over the last 25 years, and has literally fed trillions of meals to people and livestock with no food safety issues. So I think GM has been proven to be safe, but it really comes down to a personal preference issue and an economic one. Of course, we would be able to supply whatever the buyer wanted to buy.

Read also: Technology, youth inclusion, policy key to food security in Nigeria – Muda Yusuf

Any other thoughts you’d like to add?

I am so impressed with the way the Nigerian industry thinks strategically and thinks about how we need to collaborate and work together and it’s refreshing to me to see people from different segments of the industry. They come to a conference like this and while they may even compete with one another in the market, when they’re sitting, they are talking about how to work together to make things better in the future. That is really refreshing.

What would be your major takeaways following the interactions and listening to stakeholders in Nigeria?

Currently, we do a lot of education about the poultry industry, nutrition and about how to really make sure producers are being as efficient and as effective as possible. How to formulate feed and in general, production practices.

I think there’s a continued need for this, and I would want to get some of our team around the world that work on that, and make sure they’re engaged here and doing that work.

We also have a part of our team that works on market access issues and one of the things they do is try to bring different parts of the industry together to make sure there’s a common understanding and there aren’t going to be any trade issues.

I think there’s a need to continue to do that here (in Nigeria), because as I mentioned there seems to be this spirit of collaboration. But it is important to continue working to make sure everybody understands how the market works and how contracts flow. I think that would be beneficial as well.

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