Nigeria lost $100 billion in 10 years


The Food and Agricultural Organisation (FAO) has disclosed that Nigeria has lost over $100 billion since 2008 over its inability to produce, process, and export additional cocoa beans, palm oil, groundnuts, and cotton.

“It is estimated that Nigeria has lost $10 billion in annual export opportunity from groundnut, palm oil, cocoa, and cotton alone due to a continuous decline in the production of those commodities.

“Food (crop) production increases have not kept pace with population growth, resulting in rising food imports and declining levels of national food self-sufficiency,” the FAO report said.

The main factors undermining production include reliance on rain-fed agriculture, smallholder landholding, and low productivity due to poor planting material, low fertilizer application, and a weak agricultural extension system, among others.

The Agricultural Transformation Agenda (ATA), which the present Muhammadu Buhari-led government promised would be continued, set a cocoa productivity goal to double cocoa production in Nigeria from 250,000 in 2011 to 500,000 metric tonnes by 2015, but industry players claim the production has not improved.

Former Executive Director of the Cocoa Research Institute of Nigeria (CRIN), Professor Malachy Akoroda, said the goal was not backed up with sincere actions, describing the goal as far from realities.

The national output of cocoa will increase from 230,000mt to 714,000mt. This will be accomplished by increasing planted land area from the current 657,143ha to 905,000ha.

As part of the private sector-led solutions to the challenges of the industry, the association says it has been working to increase cocoa beans per hectare from 350kg to 789kg.

“The average cocoa farmer who has about 2.5 hectares who normally produces an output of 875kg and earns a gross revenue of N525,000 will now produce an output of 1,625kg and earn a more reasonable gross revenue of N975,000.

“The plan has interventions directed at providing support to cocoa farmers who want to establish new plantations or introduce complementary enterprises into his farm business for income generation opportunities,” the cocoa association revealed.


Brazil will inject $1.1b into Agriculture Sector


Mr. Ricardo Guerra de Araujo, the Ambassador of Brazil to Nigeria says that his country will soon inject $1.1 billion dollars into Nigeria’s agricultural sector.

He made this statement at a dinner to sensitize Nigerians to Agritech Nigeria, an agriculture programme organized by the Government of Osun State.

In his speech, he said that Brazil will help to transform Nigeria’s agriculture sector with the fund by establishing tractor assembly plants in Bauchi State.

According to him, mechanization of agriculture would enhance value addition, food system development and other opportunities for farmers. This will also reduce hard labour and labour shortages as well as improve the timeliness of agriculture operations.

“it will keep the youths busy because they will be employed, and create development in the area where the plant is established”, he said.

The ambassador said that the project is to be financed by the Brazilian  Exim- Bank and will come in three phases while the Central Bank of Nigeria would make available concessional resources through local banks.

He went on to say that the proposed term of financing is 13 years including 10 years of repayment and two years of grace.

Under this project, Brazil would bring agriculture equipment which would create jobs for the Nigerian youth thereby stabilizing the agricultural sector.



New method to transport farm produce introduced in Lagos

In a bid to ensure food security for Lagosians, the Lagos State Governor Akinwumi Ambode has declared the use of reusable plastics crates to aid transportation of farm produce rather than raffia baskets.

The Governor who was represented by the Secretary to the State Government, Mr. Tunji Bello made this known recently at an event held in Police college Lagos.

In his speech, the Governor said that this step was taken to secure agricultural produces.

Ambode noted that climate change was threatening the increase in agricultural output.

According to him “The greatest challenge to achieving a sustainable reduction in food shortage, therefore, remains our ability to mitigate the effects of climate change.”

“One of the measures we are putting in place is the encouragement of the use of reusable plastic crates in place of raffia baskets for the carriage of perishable farm produce; this is expected to commence state-wide next year.” He added

On her part, Executive Director of the British-American Tobacco Nigeria Foundation (BATNF), Ms. Abimbola Okoya, also explained that a higher percentage of agricultural produce was perishable and so measures needed to be taken to ensure significant risks were minimized.

“Small-scale farmers have low volumes of marketable surplus and their farms are mostly located in remote areas with poorly developed infrastructure and transportation.” She said.


Nigerians spend N132 bn on Palm oil Importation

Despite difficulties in accessing foreign exchange by palm oil importers, a total of 650,000 metric tons of crude palm oil valued at N132.1billion ($439.1 million) has been imported to meet Nigerian industrial and domestic needs.

The commodity is among the products banned by the Central Bank of Nigeria (CBN) from sourcing forex at the interbank market.

The product was ferried from Indonesia, Thailand, and Malaysia between 2017 and August 2018 as annual consumption reached 2.7 million tons.

It was revealed that despite the 35 percent duty paid by manufacturing firms and other importers to bring the product into the country, importation of crude palm oil has increased by 50,000 metric tons from 300,000 tons in 2017 because of the 1.73 million tons deficit being experienced in the country.

The imports were 16.7 percent higher than what obtained last year because of high demand as Thailand palm oil price crashed from $732 per ton to $567 per ton in the first week of October 2018.

New Telegraph gathered that the country required 2.7 million tons to meet its consumption as local production had remained static at 970,000 tons since 2015.

In July this year, Lagos Port Complex, MV Tina Theresa discharged 5,700 tons at the Apapa Bulk Terminal Limited (ABTL), while MV Champion Cornelia offloaded 4,999 tons at Josepdam in Tincan Island Port.

Also in March 2018, 55,699 tons were imported as Susan Victory and Desert Spring offloaded 45,000 tons of the commodity.

It would be recalled that the Senate had, in February this year, called on the Federal Government to ban the importation of palm oil in order to protect local production.

The lawmakers feared that importation of palm kernel and allied palm products was a threat to government’s campaign on diversification of the economy through increased agricultural production and exports.

Meanwhile, the World Economic Forum (WEF), in its forecast, said that palm oil market would expand to an estimated $88 billion a year by 2022 as Indonesia reduced its export tax for crude palm oil between 0 and 22.5 percent to attract importers from Nigeria and other countries.

Also, Indonesia has imposed a $50 per metric ton levy on crude palm oil export and a $30 per metric ton levy on processed palm oil products.

Indonesian Vegetable Oil Refiners Association (GIMNI) explained that the growth in export of palm oil and processed palm oil products to major markets would continue because of the country’s long-term target of producing 40 million tons of crude palm oil per year from 2020.

Nigeria, which was the largest producer of palm oil in the world with a market share of 43 percent in the 1960s, now has a world share of 2.9 percent, with Indonesia leading with 33 million tons; Malaysia, 19.8 million tons; Thailand, two million tons; Colombia, 1.108 million tons and Nigeria, 970,000 tons.

Hurricane Michael threatens crops and livestock in South-East America

As Hurricane Michael made landfall Wednesday, farmers in the Southeast were still recovering from the devastation caused by Hurricane Florence just weeks ago. Michael, which brought 155-mile-per-hour winds and could dump several inches of rain on the region, was threatening crops and livestock from the Florida Panhandle to North Carolina.

Pecan, cotton and peanut harvests were at risk as the dangerous storm plowed its way through Florida, Georgia, Alabama, and the Carolinas. In 2016, Hurricane Matthew caused the loss of 10 percent of the Southeast’s pecan trees, which blew over in the wind. With Michael’s excessive rain and winds, unharvested peanuts could rot in the ground and cotton bolls could be stripped from the plants.

“The track of the hurricane is almost like you could name it the ‘Southeast Cotton Industry Hurricane,’ because it’s coming into Panama City, and there are about 140,000 acres of cotton in the Florida Panhandle,” David Ruppenicker, CEO of Southern Cotton Growers, told CNBC.

Although farmers in the region were reportedly working around the clock to harvest as much as possible before the storm arrived, much of the season’s crop remained in the ground. As of October 7, only 58 percent of Florida’s peanut crop had been harvested, and just 28 percent of Alabama’s. In Georgia, just 15 percent of cotton and 33 percent of fall vegetables had been harvested when the storm hit.

Michael was also endangering dairy and poultry operations in its path. Power outages from storms can be life-threatening to animals in confined farm operations.

Both Florence and Michael hit at a time when low commodity prices and retaliatory tariffs from President Trump’s trade war threaten the livelihoods of even the most prosperous farmers.

“We started off the year with very good prices and a pretty good crop,” Wayne Boseman, president of the Carolinas Cotton Growers Cooperative, told Politico. “Now the hurricane is taking away the crop, and the trade war is taking away the price. That combination is putting a lot of farmers in severe financial constraints.”

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Why are Soybeans Valuable?

Soybeans are an edible legume native to Asia and are an important source of protein in many modern diets. Chinese farmers first domesticated soybeans around 1100 BC. Since that time, cultures around the world have cultivated the crop as a food source.

In the 1920s, the A.E. Staley Manufacturing Company began crushing soybeans and produced two new products: unrefined soybean oil and defatted soybean meal. The former soon became an important ingredient in margarine and shortening, while the latter became a staple in livestock feed.

How Are Soybeans Grown?

Soybean plants grow in any climate with a warm growing season and ample water and sun. Farmers plant seeds in rows, and in four to seven days they sprout into plants. The planting season in the United States is between May and July, and harvesting occurs around September when the crop has fully matured.

Soybeans grow in very similar conditions to corn, so many farmers grow both crops on the same acreage.

At the beginning of the planting season, farmers choose which crop to plant. To make this decision in an economically rational way, they compare the new crop futures prices for each of the two commodities. December is the new crop month for corn, while for soybeans it’s November.

The corn-soybean spread is the number of bushels of corn needed to buy a bushel of soybeans. When the ratio is below 2.2:1, corn is historically expensive, while a ratio above 2.4:1 signals historically expensive soybeans.

What Drives the Price of Soybeans?

The price of soybeans is usually highly correlated with the price of other grains, such as corn and wheat. Many of the economic and trade factors that move soybean prices affect agricultural commodities in general, including US Production, The US Dollar, Emerging Market Demand, Alternative Oils Ethanol Subsidies, and Health News


Moringa Tree gaining popularity in Ethopia


Increasing interest in the health benefits of Moringa is likely to see a boost in production in Ethiopia.

An article in Addis Fortune explains that there are 13 species of Moringa tree in the world, the most common of which are Moringa stenopetala and Moringa oleifera.

The leaves of the moringa tree are rich in protein, vitamins A, B, and C. The seeds have considerable oil content.

Moringa is processed into a powder that can be mixed with tea or other foods. In the UK, 200 grams of Moringa sells for about 191 Br (about US $10) but in Ethiopia, the price is around 50 Birr (US $2.50)

In Ethiopia, Moringa stenopetala is the most commonly grown species, known locally as Shiferaw or Aleko. In southern Ethiopia, the leaf of the plant is used as a substitute for cabbage in the local diet. It is also used as animal feed.

The Agric produce is one of the least traded commodities in Ethiopia and the level of consumption is restricted to a few areas of the Southern Region.

But this is set to change. Interest in the Agric produce is growing, both in Ethiopia and worldwide. Production is expanding from the Southern Region to other parts of the country. Moringa powder is increasingly available in city supermarkets in Ethiopia and there are plans to increase export with several investors interested in establishing value chains for the product, supported by the government of Ethiopia. Research is also being conducted on the tree and its nutritional value.


Fluctuation in futures market weighs on cocoa powder prices

Cocoa bean

As the United States’ top chocolate consuming holiday (Halloween) approaches and International Chocolate Day (Sept. 13) has just passed, the cocoa industry finds itself with plenty of supply, uncertainty about demand and a widely-fluctuating futures market. Meanwhile, the industry continues to grapple with sustainably sourcing cocoa beans often grown and harvested in poor regions under less-than-acceptable circumstances.

The International Cocoa Organization (I.C.C.O.) estimates global 2017-18 cocoa bean production at 4,645,000 tonnes, down 2% from the prior year. World cocoa bean grindings, an indication of demand, were estimated at 4,568,000 tonnes, up 3.9% from 2016-17. Carryover stocks on Oct. 1, 2018 (the beginning of the 2018-19 cocoa bean marketing year), were forecast at 1,757,000 tonnes, up 1.8% from 2017, with a stocks-to-grindings ratio of 38.5% compared with 39.3% the prior year.

Regionally, second-quarter cocoa bean grind (the most recent data available) showed mixed results. North America grind, reported by the National Confectioners Association, was down a disappointing 3.1% from the same period last year. But European grind jumped 7% from April-June 2017, and Asian grind surged 15% from a year earlier.

Cocoa powder prices in the United States have shown mixed price moves in 2018 with 10% to 12% natural powder up about 10% since Jan. 1 at 85c to 95c a lb, as quoted by Milling & Baking News. The price of black cocoa powder also was up about 7% so far in 2018. But prices for 10% to 12% alkalized and red alkalized (Dutch) both were down about 5%. Prices for all grades of cocoa powder were slightly below year-ago levels.

Trade sources indicate cocoa powder buyers mostly are well covered into 2019 and some even buying into 2020. With only a minimal carry in New York cocoa bean futures (about $100 per tonne from nearby December to May 2020 last week), and no indication of supply tightness, there has been little incentive to book too aggressively. At the same time, the flat price may have encouraged some booking as a move up in futures appears a bit more likely than a significant move down.


Palm mostly sideways as market looks for new leads

Malaysian palm oil futures were up slightly on Tuesday, as the market traded mostly sideways, looking for new catalysts.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.14% at 2,160 ringgit (US$521.74) a tonne.

Trading volumes stood at 42,844 lots of 25 tonnes each.

“Palm could have gone higher, but there’s a lot of liquidation in the nearby contracts rolling over to the forward months,” a Kuala Lumpur-based trader said.

The trader expects the futures contract to continue trading sideways until new industry data and forecasts are available.

Another trader said the market was waiting for new leads, while rising stockpiles continue to be worrisome, keeping the futures contract range-bound at 2,137-2,200 ringgit per tonne.

Malaysian palm oil inventories rose to a seven-month high of 2.49 million tonnes in August, official data from a Malaysian industry regulator showed.

Industry analyst Dorab Mistry also pegged Malaysia’s peak end-stocks at 3-3.3 million tonnes for the year, while estimating Indonesia’s inventories are currently close to 5 million tonnes and will keep rising.

In other related oils, the Chicago September soybean oil contract was last down 0.4%.

The Dalian January soybean oil contract and January palm oil contract were un-traded, as the Dalian Commodity Exchange was closed for national holidays in China.

Palm oil prices are affected by movements of other edible oils, as they compete for a share in the global vegetable oils market.


Ghana, Ivory Coast cocoa plan to have limited effect on world prices


Plans by the world’s top cocoa growers Ivory Coast and Ghana to harmonize bean prices are unlikely to have much effect on world markets because of differences between their marketing systems and minimal domestic processing, Fitch Solutions analysts said.

The two countries account for about 60 percent of global output but exert limited influence over international prices, which have stayed low in recent years due to overproduction.

In response, they struck a deal this month to coordinate their farmgate prices for the upcoming October-to-September growing season. The collaboration is meant to emulate the OPEC oil cartel.

But a report by Fitch Solutions, a unit of rating agency Fitch, said that would be difficult to achieve, citing wide differences in how Ivory Coast and Ghana export their crop, most of which leaves West Africa in a raw or semi-finished state.

“Though the countries’ influence on global supply and international trade is substantial … various structural barriers will inhibit their ability to manipulate the cocoa market,” the report said.

Talks between Ivory Coast and Ghana followed intense market volatility over the last two years. Ivory Coast was forced to cut farmgate prices sharply last season while Ghana incurred losses of at least 2 billion cedis ($410 million).

In order to effectively harmonize prices, Fitch Solutions said, one of the countries would need to overhaul its market structure, but neither side has indicated it is prepared to make wholesale changes.

Ivorian farmers sell cocoa to international producers such as Barry Callebaut through state-organized auctions, meaning local prices are relatively responsive to global prices changes.

In contrast, Ghana’s Cocobod buys the beans at a price set at the start of the season, which prevents farmers from selling to other buyers.

The African Development Bank last year agreed to provide $1.2 billion to finance the harmonization plan, which includes construction of modern storage facilities, farm rehabilitation, and disease control.