Nigeria: CBN Restricts Official Forex for Corn Imports
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Corn production in Nigeria has risen to the highest level since the nation’s independence in 1960. The production of Corn increased by 16 percent in 2021 over the previous year, according to the United State Department of Agriculture. The rise came a year after the Central Bank of Nigeria (CBN) halted Government-supplied foreign exchange for the importation of Corn in a bid to cut imports and boost domestic production. The Government did not stop importers from sourcing dollars from the black market. The figure was also coming at a time of growing concerns about global food scarcity due to Russia’s invasion of Ukraine.
Corn, one of the most popular food crops in Nigeria, is widely consumed by millions of Nigerians and is also used for the production of animal feeds. However, local production has for years lagged consumption, a situation that has fueled importation with implications for Nigeria’s currency and job creation. Corn accounts for the majority share of Nigeria’s coarse grain production. FAS Lagos forecasts Nigeria’s MY2022/23 Corn production at 12.5 million metric tons (MMT), a roughly 8 percent increase compared to 11.6 million tons (MMT) MY2021/22.
The Federal Ministry of Agriculture and Rural Development (FMARD) is driving Corn production through its Agriculture for Food and Job Plan (AFJP), which is a component of the National Economic Sustainability Plan (NESP). The AFJP is geared towards creating 5 to 10 million jobs in agriculture through providing training (good agronomic practices) and loans at zero interest rates to the beneficiaries. In 2021, the scheme was able to support about 1.2 million farmers across the country. Most farmers are into grain cultivation – Corn, rice, and sorghum. FMARD is poised to increase the number of beneficiaries to 5 million by the end of 2022.
According to the Nigerian Meteorological Agency (NiMet), rainfall characteristics (onset and cessation dates, length of season, rainfall amount) in 2022 are anticipated to be normal or near normal in most parts of the country. These are pointers to a good harvest in 2022. In Nigeria, 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 three months of planting. Government military actions against the bandits and terrorists in both northwest and northeast continue and are helping farmers return to their fields.
In August 2021, 1.75 million internally displaced person returnees in the northeast returned to their communities. The Government is making land accessibility possible to attract previously displaced farmers back to farming – to actively engage in crop production. The availability of early maturing Corn has made it possible for farmers, especially in the south and north central, to plant two crops per year – early and late Corn.
Nigerian Corn Trade
In 2019, Nigeria was Africa’s second-largest Corn producer after South Africa and the 14th-largest producer globally. Yet, its local Corn demand continues to surpass supply, thus creating an annual demand gap of about 4 million metric tons annually. Post forecasts imports for MY2022/23 at 100,000 metric tons (MT), a reduction from 200,000 metric tons (MT) recorded previous marketing year. Key importing private companies is Olam and Flour Mill of Nigeria. These major flour millers have other sources to generate forex to pay for imports amid the CBN restriction on official forex for Corn imports.
FAS Lagos projects MY2022/23 Corn exports at 50,000 metric tons (MT), same as the USDA figure in the previous year. Nigeria bans the export of Corn. However, informal trade exchanges between Nigeria and Sahel countries occur routinely. Traders are capitalizing on exports despite constraining factors such as high transportation costs and insecurity.
Other sources: PREMIUM TIMES
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