₦airaland Forum

WINNING IN PRICING FOR HIGH-QUALITY CASSAVA FLOUR (HQCF) USAGES TO THRIVE IN NIGERIA

At the industrial usages level in Nigeria, High Quality Cassava Flour (HQCF) is majorly competing with Wheat flour and Corn starch/flour. And because of the wide usage of wheat flour, it poses more challenges to the proliferation and embracement of HQCF as an industrial raw material. Also complicating this is the excessive increase in the price of HQCF, which has further pushed it backward in its market competition with wheat flour. With the sponsored bill for cassava flour inclusion at the senate, which has passed through the second reading, there is hope, that wider usage of the flour will soon suffice. Should the products of HQCF-origin, like cassava-based bread becomes widely embraced, the economic impacts would be felt not only positively in Nigeria, but also adversely on the economy of western nations that have been benefiting massively in the importation of wheat and wheat flour to Nigeria.

However, until the price of High-Quality Cassava Flour (HQCF) in Nigeria market becomes significantly lower than that of wheat flour with at least 10-15%; to be economically attractive enough, its high-volume industrial usages and willful embracement, especially at bakery and confectioneries will still be scratching the surface. The current market price of 50kg of wheat flour is averagely Sixty-four thousand, five hundred naira (N64,500) and that of HQCF 50kg is averagely Seventy thousand naira (N70,000). That is a whopping 8.5%. Successful trial productions of HQCF-based bread at 20% inclusion and positive feedback from its organoleptic assessment and testimonies from some bakers who are already using the combination, all have help strengthen the confidence in this economic exploration but the issue of pricing is still a major hurdle remaining to be crossed.

Beginning from sometime in 2023 or thereabout, the rising cost of cassava tubers due to inadequate availability has consistently made the comparative pricing management between HQCF and wheat flour so difficult for the industrial stakeholders. At some point in 2024, the situation got so bad that the raw material cost became as high as 80% of the total production cost. When this was combined with the high factory energy cost, the eventual cost of finished product became even higher than that of the wheat flour. At that time, that the tail began to wag the dog instead of the other way round, many producers just shut down their factories and 'begin dey look'. One has to really commend the doggedness of some HQCF processors in, who still strive against all odds to keep on with production. I know many of them, who barely make meagre return, to keep on with operations in order not to fail supplying the end-user companies already committed to them.

Aside the high cost of energy that has forced many factories in Nigeria out of operation, inadequate availability and rising/unstable pricing of cassava tuber is a major challenge affecting production of cassava derivatives for industrial usages in Nigeria. And of serious concern is how this pricing challenge has been hindering the economic focus to make High Quality Cassava Flour (HQCF) an industrial raw material substitute at a reasonable economic volume. Government policies, industrial interventions and supports to stakeholders at different levels to surmount the challenges are all duly noted and truly, we are seeing some signs of hope as the rate of cassava cultivation since 2024 has significantly improved. But it is not yet Uhuru.

Yes, I do agree that it is a work in progress, but the truth is that the competing factors, locally and internationally are not also relaxing on their oars. Majorly are the business entities benefiting from the importation and usages of wheat grain (+wheat flour) for our local production. One should rather focus on the home threatening factors, and hope that the government will one day be able to muster enough courage to decisively challenge foreign influences that have been killing our home efforts on this endeavour. The 2024 tariff reduction on importation, in which wheat flour was included was a major setback to the prior achievements on the HQCF usage journey. Except if that move is made to be short-term food security intervention as promised, one can just assume that the Nigeria government is planting groundnut with one hand and as well beckoning squirrel with the second hand.

We need to take note of how big the gap is, else we may not be able to give the impact its appreciable economic measurement. Apart from the fact that locally produced HQCF is meant to be an import substitution to wheat flour; even if not entirely, there were information that Nigeria imported about twenty-seven thousand metric tons of cassava flour amounting around thirty-eight million dollars in 2023 to take care of the local demand gap. This is huge, and from my findings, it used to be more than this in the past. Many of us might feel bad about this sad reality, knowing fully well that Nigeria is said to be the largest producer of cassava tubers globally, but the sincere question that also deserve a reasonable answer is whether we have enough local capacity to satisfy this local demand, bearing the aforesaid raw material and operational challenges.

The answer is neither here nor there. In terms of numbers of processors and installed capacity, I can tell you that the country has that. I can count close to fifty established HQCF processing facilities with impressive installed capacity across the country today and many more are still springing up. Sadly, less than 50% of these facilities are currently operating and even those operating are struggling to operate at 50% of their installed capacity. Major among their challenges are the issues of raw material and energy challenges as earlier mentioned.
It was said that sixty-three million metric tons of cassava tubers was produced in Nigeria in 2023. If the production rises to seventy million metric tons in 2025, I am so confident that the system would absorb it all. The industrial usages have been rising steadily and the domestic food usages of cassava tubers has been suffering the pressure of increasing demands of the tubers for the growing industries. Account of usages also needs to take cognizance of cassava chips ‘unofficial’ exports to neighbouring African countries through land boarders. This on its own is equally very massive and it has been increasing since the last three years.

The roles of rural grassroot smallholder cassava farmers should not be overlooked. It is their consistency that has been keeping the annually production from Nigeria on top of other producing countries. While a large-scale cassava farmer may choose to run away from cassava cultivation after one or two failure, rural grassroot farmers would keep trying year in, year out. They may not be cultivating more than two to three acres per person, but the fact that they are many across every part of the country, the impressive volume they are turning out means a lot in determining availability of cassava tubers each year.

Thus, stakeholders must find ways to meaningfully keep encouraging them with necessary input supports and training needs. Support through cluster farmland tractorization and provision of basic inputs like high yielding stem cuttings and herbicides would go a long way. Necessary training supports on cultivation protocol to achieve optimum yield could then be provided and coordinated through the central processors that the farmers are attached to. This support and encouragement will attract more players to join the league of cassava farmers. It is through advancing the course of the rural smallholder cassava farmers that a sustainable growth in annual production would be achieved.

As you are rightly thinking, raw material should not be a challenge, after all Nigeria is the largest producer of cassava tubers globally and we still have large expanse of arable land to cultivate more. Yes, it is so. But the truth of the matter is that the cost at which a ton of cassava tubers is currently being produced in Nigeria is so higher than what it supposed to be. With the high cost of farm inputs and other variables, it is only by achieving optimal yield of up to 20 tons and more that cassava production would become reasonably profitable. Even at such profitability, are the farmers willing to be reasonable enough in their pricing of tubers to favour the production economics of the processors?

Price control might have its own traditional bottlenecks that could be frustrating its excellent execution but in my own opinion, pricing of a product of serious economic interest like cassava should not be totally left for the market to always dictate. This will keep causing market instability, as the excessive fluctuation would make many players to rush into cassava cultivation at some time and many also would be running out at another time. In my own opinion, the Economics of Production Pricing -led approach, backed with MoU between a processor and his attached cassava farmers is still the best way to go on this.

With favourable pricing system and more people are being encouraged to go into cassava farming to keep increasing the annual production, there is a promising future for price comparative advantage for cassava derivatives, not only in Nigeria but also at the global market. it must also be made a point of duty for all processors to engage in cassava production. The recent experience has shown that even if the annual production keeps increasing by 15-20%, the growing industrial demand plus the domestic consumption as a major traditional food staple would not allow the market to witness any major market glut in any nearest of time.

It is in growing more and more cassava tubers every year, with optimum yield; that can only be achieved by strict adherence to good agronomic practices as applied to cassava production, that sustainable production of cassava derivatives at good prices could be achieved. When the availability of the raw material at good price is combined with efficient factory operations, there is no way that the finished products would not be able to measure up, competitively in local or global market. The challenges of high energy cost and its inadequate supply at the farm areas where processing facilities are sited, which is the major hinderance to efficient operations is being tactically tackled by individual processors at different levels. We have observed efforts ongoing by some of the established processors in putting in place alternative energy sources to complement supply from the national grids.

Financing the installation of industrial capacity bio-digester plant and solar energy generation system requires huge capital but it is a way to go, if one has means of financing it. Apart from its advantage of steady supply, the associated cost of its usages and operations is far lower from cost of running diesel generator. Processors are enjoined to embark on these forms of alternative energy supplies as capital projects even if it means seeking external financing. In the Nigeria Cassava Processing Business terrain, access to adequate supply of raw material at a good price is the number one strength. Access to effective and efficient technology is the next. Then comes the pursuant of alternative cheaper energy source to support the supply from the national electricity grid. If you have a big purse, it is advised you take the whole at the same time. Else, take each step serially at a time.

In addition to the usage of High-Quality Cassava Flour as a composite flour in bread and confectioneries production, HQCF is popularly used as a filler and binder in production of cubed seasoning brands, as a major ingredient in production of spaghetti, macaroni and noodles and many other food products. The industrial grade cassava flour also enjoys wide industrial usages in production of paper, paint, soap, and many other non-food products. The annual industrial demand for cassava flour in Nigeria is estimated at about 750,000 metric tons and we are barely producing only about 10% locally. This is an indication that there is still enough room for more local participation.

It is through intensive cassava farming to meet up with the raw material needs that many of us need to and must endeavour to take part. Even if it is only one acre, there is nothing stopping every one person out of a thousand of Nigeria population to take part in cassava farming. It is not only about choice, but should be taken as a national call to support the economy of the country. We are already aware that a thriving cassava derived product substitution strategy in Nigeria will impact the markets of several grain producing countries around the world and their resistant reactions in this regard is envisaged and understandable. Only a patriotic and nationalistic agenda on industrial cassava utilizations from a government who is deliberately focused, with forceful and strategic approaches would help achieve this National Economic Freedom.

When the government makes the right policies in this direction, stand by it to be excellently executed and we Nigerians as a people embrace the process and its products wholeheartedly, that is when we are all ready for the economic freedom that we all desire.

KAZEEM LAMIDI is of Industrial Cassava Stakeholders’ Association of Nigeria (ICSAN). To know more about ICSAN, visit www.icsan.com.ng. For details on how to become a member of the Association, simply click https:///LMWjhttKoPtynjw87. You can also like and follow the Association Facebook page by clicking https://www.facebook.com/share/1CtfR925AV/.

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