Millers Seek FX For N2.2trn Wheat Import To Avert Food Crisis
The Scarcity of foreign exchange has compounded the woes of Flour millers who are shopping for dollars to fund N2.2 trillion importation of Durum wheat into Nigeria.
The flour millers under the aegis, Flour Millers Association of Nigeria (FMAN) are FMN Plc, BUA Plc, Olam, Dangote and Honeywell. FMAN is a sectoral unit of the Manufacturers Association of Nigeria (MAN) that is currently groaning under the hike of diesel price to N700 and the unstable supply of electricity.
Nigeria needs 5 million tonnes of wheat for consumption annually but has the capacity for meagre 420,000 tons and the FMAN has been responsible for the importation of 2 million tonnes valued at about N2.2 trillion to bridge the gap annually.
Flour from Durum wheat is highly sought for its numerous nutrients that makes it very good for the end products like bread and semolina.
This is exemplified in its importation into the country in Q4 2020 during which Durum wheat was the major agriculture import for the quarter.
During the period, durum wheat (not in seeds) worth N62.9 billion was imported from Russia, Lithuania (N55.3 billion), the United States (N54.6 billion) and Canada (N51.8billion).
Failure of FMAN to procure the forex to import the wheat species, operators in
the manufacturing sector said will put the industry that is currently starved of electricity from the grid, the alternative to diesel energy, under severe pressure.
The implication is that some food items made from flour that is the end product of wheat will disappear from Nigeria’s menu list, at least for some time.
Flour products are foods like semolina, semovita, couscous, spaghetti, bread and other Confectioneries. These are popular food items among Nigerians and are consumed in huge quantities.
The FMAN group is already in a tight corner over the Russian- Ukrainian conflicts which have made the region a no-go area for the Durum wheat that is sourced from Russia, Ukraine, Canada, Mexico, and the United States.
Russia and Ukraine together, account for nearly a quarter of global exports of wheat but the military crisis and the attendant sanctions by the United States (U.S) and many European Countries (EU) on Russian agric products have caused blockade which squeezed global grain supplies from one of the world’s biggest grain-producing regions, pushing wheat prices higher on world markets and fanning the threat of inflation.
FMAN’s National President, Salim A. Salim told insidebusiness. ng that sourcing for forex to import $6 billion worth of wheat to bridge the local supply gap is a big task, especially with the crisis in the foreign exchange market.
As of Friday, 11th March, the local currency, the naira traded at N581 per dollar at the parallel market, while it is N415.88 at the official rate.
Since the ban on the sale of forex by the BDCs, the naira had lost 15.01 per cent or N76 in value, declining from N505 per dollar to its current rate of N581/$1.
The Governor of the CBN, Godwin Emefiele on July 27th 2021 stopped forex sales to BDCs and channelled weekly allocations of dollar sales to commercial banks to meet legitimate foreign exchange demands.
Owing to the scarcity of forex and the low local supply capacity, Salim said the current trend on the international scene is a wake-up call for the government to evolve measures to assist farmers to increase their outputs.
He stressed that the inability of the local market to meet up with demands has caused Nigeria’s economy about N2.2 trillion in the importation of wheat annually, an import which can no longer be sustained post-COVID-19.
Salim, therefore, predicted severe pressure on the country’s food supply, especially now that the Russian-Ukraine conflicts has denied Nigeria access to 31 per cent supply wheat supply.
The Managing Director, Crosspost-COVID-19 Limited (CFM), Ashish Pande, who is a member of FMAN, said the local 420,000 tons production of wheat, according to the data by the Federal Minisof Agriculture and Rural Development, is still a far cry from the 5 million metric ton that is required annually.
With this figure, the national objective of attaining wheat production domestically is still to be met.
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