Miller Magazine Issue: 156 December 2022

Nigerian bakeries are expecting a protracted Russia-Ukraine war. As a result, bakeries are exploring the options of blending wheat with cassava flour, millet flour, and sweet potato flour. Over the past decade, the government has pushed for cassava flour mixed in bread, hoping that the policy would significantly reduce wheat imports. Meanwhile, the government’s cassava flour blending policy is still in play. The policy calls for cassava flour blending up to 40 percent. However, millers do not support the policy because cassava flour does not blend well with wheat flour to produce good-quality dough. The Russia-Ukraine war has prompted Nigerian officials to collaborate with the private sector in diversifying the country’s wheat sources. The Ministry of Industry, Trade, and Investment approved Crown Flour Mill’s request to import wheat from India. The disruption of the global wheat supply chain and local pro- duction challenges pressed public and private stakeholders to seek alternative wheat sources. Nigeria wheat millers have di- versified their wheat sourcing so that they are not limited to spe- cific countries. For example, during the first half of 2022, Nige- ria’s wheat imports came mainly from North and South America. CONSOLIDATION IN THE FLOUR MILLING INDUSTRY In 2021, the flour milling sector experienced a major consol- idation. The largest flour milling company Flour Mills of Nigeria (FMN) acquired majority shareholding stake in its major compet- itor Honeywell Flour Mills. The deal helped FMN get bigger to reduce costs and reach more consumers. Currently, the compa- ny has an installed flour milling capacity of about 12,000 metric tons per day. It has the largest single-site flour mill located near Nigeria’s biggest port. Honeywell Flour Mills has about 2,500 metric tons per day flour milling capacity. The two companies offer similar products and have a combined market share of 70 percent. In general, the large flour mills owned by FMN, Honey- well, BUA and Olam are highly integrated efficient purchasing, transporting, and processing systems that strengthen their com- petitive advantages. CORN PRODUCTION Corn accounts for the majority share of Nigeria’s coarse grain production. Corn constitutes the staple meal for a significant num- ber of Nigerians and is the most critical ingredient in producing animal and aquaculture feed. Nigeria’s corn consumption occurs in the form of corn flour, confectionery, roasted corn, boiled, or prepared as porridge. Green corn is also boiled or roasted on its cob and served as a snack. Household consumption accounts for 10-15 percent of total consumption, while the remainder goes towards food manufacturing. Over 20 percent of Nigeria’s corn production goes into animal feed, especially for poultry feed. Corn production is rain-fed, and the planting season starts in mid-March through mid-June annually - March/April in the South and May/ June in the North. The crop matures within 3 months of planting. USDA estimates Nigeria’s 2022/23 season corn production at 12.1 million metric tons, a roughly 5 percent decrease compared to the 2021/22 figure of 12.5 million tons. Regional insecurity across Nigeria’s corn belt hampers corn production as farmers abandon their farms and escape to nonviolent areas in cities. RICE PRODUCTION Rice is an essential cereal in Nigeria. Currently, the country’s annual population growth rate is 2.6%, with a median age of 18. Nigeria imports rice due to a growing population and increasing demand – essential factors contributing to rice imports. USDA forecasts 2022/23 season rice rough production at 7.8 million metric tons, a 7 percent decrease compared to the previ- ous year and rice consumption at 6.9 million metric tons (MMT), a 5 percent decrease from last year. Nigeria rice farmers in the northern part of the country experienced insecurity and flood in- cidents this year. These threats negatively impacted upland rice cultivation. Nigerian rice milling capacity increased from 350,000 metric tons per annum in 2015 to more than 3 million metric tons per annum in 2021. The number of integrated rice mills jumped up from 10 to above 60 mills during the same period. The scarcity of rice paddy is a major challenge for rice milling companies across the country as most of these mills operate below 50% milling capacity. According to the Rice Millers Association, mill- ers are operating under a tight economic environment due to a lack of paddy, low milling capacity, high diesel cost, and lack of access to official foreign exchange to import parts and new equipment. COUNTRY PROFILE 89 MILLER / DECEMBER 2022 Wheat Production, Consumption and Imports in Nigeria (1000 Tons) 2020/2021 2021/2022 2022/2023 Production 55 90 110 Consumption 5550 5850 5850 Import 6586 6187 6000 Source: USDA Corn Production, Consumption and Imports in Nigeria (1000 Tons) 2020/2021 2021/2022 2022/2023 Production 12400 12745 12180 Consumption 12500 12600 13000 Import 300 200 50 Source: USDA Rice Production, Consumption and Imports in Nigeria (1000 Tons) 2020/2021 2021/2022 2022/2023 Production 8171 8341 7800 Consumption 7150 7250 6900 Import 2200 2200 1500 Source: USDA