Miller Magazine Issue: 116 August 2019

NIGERIA 90 MILLER / AUGUST 2019 Nigeria’s traditional wheat-producing regions are located in the country’s northeast region and in the highlands. Wheat production in the northeast region (i.e., states of Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe) has been declining in recent years due to insurgencies. Sources comment that for pro- duction levels to increase, to come close to meeting local demand needs, this will require long-term pri- vate sector investment along with massive infrastruc- ture development and greater access to untitled (free) lands. The Nigerian government, along with humanitarian relief organizations, and non-governmental organiza- tions (NGO) routinely purchase local wheat at roughly $500/MT, paying a $100/MT premium. This wheat goes to Nigerians (living in camps) displaced by the Boko Haram insurgency. Wheat farmers are refusing to sell at the mandated $400/MT rate to millers, pre- ferring to sell to the institutional buyers and or export at premium rates. USDA forecasts Nigeria’s wheat imports in MY 2019/20 at 5.6 MMT. Russia, the United States, Canada, and Australia supply the bulk of Ni- geria’s wheat imports destined for milling. Sources indicate that the flour milled from local wheat is not economically suitable for the manufacture of bread, pasta, and noodles. Local wheat flour is, however, nonetheless used in the preparation more traditional/ customary meals in Nigeria and in the Sahel region. The market share of U.S.-or- igin wheat has been declining over the past decade; falling from a high of 91 percent in MY 2010/11 to a low of 27 percent in MY 2017/18. The drop in U.S.-origin wheat’s market share is due to increasing competition from cheaper priced wheat imports from Russia, Australia, Canada, and Argentina. MILLING SECTOR The country’s wheat milling capacity is at about 8 million tons. Major millers aim to operate at produc- tive levels, adjusting inputs to maximize profits. Flour Mills of Nigeria (FMN) is Nigeria’s largest flour miller; it is also the world’s second-largest flour miller. DUFIL, Nigeria’s noodle giant, acquired Standard Flour Mills, Pure Flour Mills, and Valleumbra Flour Mills, trans- forming it into a major HRW importer. Other major players include Dangote, Honeywell, OLAM Interna- tional (which acquired Crown Flour Mills and BUA), and the Seaboard Group. Seaboard’s Life Flour Mill in Sapele has 1,200 MT/day milling capacity, special- izing in bread flour and semolina. In 2018, Honey- well Flour Mills, one of Nigeria’s largest flour millers, commissioned a 350,000 MT/day mill near Lagos. A new flour mill, under construction in Port Harcourt, is slated for commissioning in 2019.