Market and Trade Data
Nigeria No. 1 Market for U.S. Wheat; Potential for
Other Grains and Feeds
By Michael David
also . . .
FAS Report NI6007
sales at 3.2 million metric tons, Oil-rich Nigeria, with
its 132 million residents, became the top market for
U.S. wheat exports in calendar 2005, with the promise of
continued strong market share next year.
The world’s leading importer of hard red winter wheat is
forecast to import 4.3 million metric tons of wheat in
marketing year 2006/07 (July 2006 - June 2007). Nigeria
will be buying about 90 percent, or 3.8 million tons, of
that wheat from the United States.
Canada, the European Union, and Argentina provide the
principal competition in this market — trailing with
total market sales of 500,000 tons.
The rising level of U.S. wheat exports to Nigeria has
been boosted by a relatively stable exchange rate,
competitive wheat prices, high crude oil prices, and
modest economic growth. With favorable conditions
continuing, industry sources expect annual U.S. wheat
sales to Nigeria to exceed 5 million tons within the
next 3 years.
Between 1995 and 2005, per capita wheat consumption in
Nigeria more than tripled — from 6 to 20 kg (1 kilogram
= 2.2046 pounds). And demand has not topped out — wheat
imports are expected to be up another 500,000 tons in
marketing year 2006/07.
New mills are coming online in Nigeria, while existing
millers are expanding to meet new demand for bread,
pasta, and baked products. Bakery operations are being
modernized and expanded to satisfy this growing demand,
especially for bread.
Cassava Mandates for Wheat Flour
Nigeria’s government directed millers to alter their
production of wheat flour to include 10-percent cassava
flour by July 1, 2006. The government introduced the
mandate to increase grower income from this Nigerian
staple. Cassava flour, derived from dried cassava
tubers, is widely used in foods across the country.
Although mills have tried to comply, there is a shortage
of cassava flour. To meet the spirit of the mandate,
millers set up a $3.9 million fund to encourage cassava
growers and processors. While millers will follow the
mandate when they can, there are concerns over the
undesirable changes in shelf-life, color, odor and taste
that cassava brings to bread.
Nigeria’s overall milling capacity is around 6.1 million
tons per year, up from 4 million tons in 2002. Though
most production is for bread flour, Nigeria’s ban on
importing cookies, crackers, and pasta in 2004 and an
increasing consumer fondness for pasta have led to
expansion of local production rapidly.
Wheat Crop Falls Short of Other Grains
Nigeria’s total grain production in marketing year
2006/07 is forecast to rise 5 percent, given good
weather conditions, and several government initiatives
(low-interest loans, protection from imports, and
subsidies for inputs like seeds and fertilizers) that
improve productivity and income. However, Nigerian
farmers continue to face low productivity due to a lack
of basic farm inputs and inadequate training in the
latest technology; farmers are also often at the mercy
of Nigeria’s volatile market.
Domestic wheat production is forecast at 60,000 tons,
the same as marketing year 2005/06. Production is not
expected to increase much beyond this capacity due to
unfavorable growing conditions.
In addition to human consumption, wheat for feed use is
forecast at 130,000 tons, up from 125,000 tons in
marketing year 2005/06. The scarcity and high cost of
corn is encouraging poultry feed producers to switch to
soft wheat, mainly from Argentina and Kazakhstan.
Prospects for Rice
While wheat is the headliner for U.S. exports to
Nigeria, other grains have potential for increased
sales. With promotional activities that target the
growing number of middle-to-high income consumers, U.S.
milled parboiled rice could easily compete for a share
of the top niche segment of the Nigerian market now held
by Southeast Asian countries. Industry representatives
estimate that with appropriate market support, U.S. rice
sales could increase from 12,000 tons to 100,000 tons
Domestic rice production continues to trend up, forecast
at 2.8 million tons in marketing year 2006/07, 100,000
tons more than the year before. The government has taken
several steps to achieve self-sufficiency, including
incentives and a 100-percent duty on rice imports,
designed to protect fledgling rice producers.
Despite the high duty, rice imports continue to rise
because local output is inadequate. Another aspect of
the market is large-scale cross-border smuggling that is
encouraged by the high duty.
There is one sanctioned way to get around the
100-percent tariff — develop a business relationship
with the two import companies that hold licenses to
import 100,000 tons of brown rice a year at a 20-percent
Breweries, Poultry Feed Fuel Demand for Corn
7.35 million tons, the Nigerian corn production forecast
for marketing year 2006/07 is up from 7 million tons
last year. This increase is based on early rains, not
improved inputs or cultivation techniques. Most of the
crop is destined for human consumption, fueled by
increased brewery demand. However, feed utilization is
also increasing, thanks to rapid growth in the poultry
industry. Total feed usage is expected to be 810,000
tons, up from 800,000 in marketing year 2005/06.
Sorghum Best Crop for Nigeria
Sorghum, Nigeria’s most widely cultivated grain,
accounts for 45 percent of crop acreage. Production in
marketing year 2006/07 is forecast at 10.6 million tons,
up slightly from the year before, mostly due to improved
local seed varieties.
Sorghum enjoys a large and growing domestic demand based
on its extensive use as food in all parts of northern
Nigeria and in brewing homemade beer. The use of sorghum
in animal feed is also trending upwards because of tight
The author is an agricultural specialist with the
Office of Agricultural Affairs in Lagos, Nigeria.