Nigeria’s wheat imports in marketing year (MY) 2018/19 are forecast at 5.4 million metric tons (MMT), up 4% from the previous year, primarily due to stagnated production, according to Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).

Compared to 2017/18 import figure of 5.2 million metric tons, the report attributed the increase to millers’ greater access to foreign exchange to pay for the wheat imports.

The increase comes as Nigeria struggles to expand wheat production, which has been stagnant at 60,000 tonnes in the last three years.

“Despite growing demand for wheat and higher prices, insecurity (arising from Islamist group Boko Haram) continues to limit access to farmland in Nigeria’s main wheat production areas,” the USDA said.

“The average production cost of wheat hovers at roughly US$420 per tonne, selling at US$600 per tonne in the Sahel region.

High production costs are leading farmers and private sector investors to prioritize production for export, where they can obtain higher returns.”

Declining local production

Nigeria, which is Africa’s most populous nation is said to be experiencing a decline in local production while demand for the commodity is significantly increasing, necessitating imports.

Between April and June last year, official data showed that Nigeria imported 1.36 million metric tons of wheat compared with 1.04 million tons in the first three months of the year.

The data published by the National Bureau of Statistics indicated that the shipments coming from U.S., Russia, Canada and Germany cost 114.8 billion naira (US$315.7 million) compared with 87.4 billion naira in the first quarter.

Local production is constrained by the high cost of inputs such as fertilizer and the lack of access to storage facilities.

Nigeria is the world’s number ten buyer of wheat and last year, it spent US$4.4 billion on imports and based on the federal government’s goal to cut on import bill, it plans to reduce the shipments by 60% by 2025, according to the agriculture ministry.

Wheat production stood at 60,000 tons at the end of the 2016-17 season, according to data from the U.S. Department of Agriculture.

The U.S. is the biggest exporter of the grain to Nigeria, with 3.3 million tons arriving in 2017, followed by Russia with 1.7 million tons, according to Nigeria’s agriculture ministry.

The report meanwhile, said that Nigeria’s rice imports in MY 2018/19 are forecast at 2.5 MMT, up 25% compared to the MY 2017/18 figure of 2 million metric tons.

SOURCE: https://brandspurng.com/2019/01/11/nigerias-wheat-imports-to-rise-4-with-stagnant-production/