Nigeria Agribusiness Report Q4 2010
Business Monitor International, September 2010, Pages: 52
The Nigeria Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Nigeria's agribusiness service.
This report forecasts positive consumption growth across all agricultural sectors in the five years to 2014; growth in the consumption of pork, poultry, milk and sugar will benefit from rising living standards and by an expanding population. Strong production growth is also anticipated for most agricultural sectors, but especially for corn, sorghum, cocoa and sugar (see below). Insufficient investment continues to be one of the biggest problems in what is a high-potential agricultural industry. The Nigerian government has expressed a commitment to further agricultural development in the quest for improved food security and economic diversification. Despite this, actual investment has been low, especially when one considers agribusiness contributes almost 42% to Nigeria's GDP and provides employment to around 70% of the workforce. The problem is exacerbated by the apparent unwillingness of the private sector to fill the void; in this respect, Nigeria's difficult business environment remains a key challenge to increasing the level of investment.
Key Industry Forecasts:
- Grains Production Forecasts, 2009-2014: Corn: 22%; Sorghum: 24% - benefiting from improved acreage, high prices (in the case of corn), investment in higher-yielding seed varieties and demand from subsectors such as brewing and poultry feed.
- Cocoa Production Forecast, 2009-2014: 26% - driven by increased government investment, greater commercialisation, strong global cocoa prices and efforts to develop the cocoa processing sector.
- Sugar Production Forecast, 2009-2014: 42% - supported by government production incentives but coming from a low base.
- Livestock Production Forecast, 2009-2014: Poultry: 27%; Pork: 21% - fuelled by rising demand for meat, government support and improved farming techniques.
Key Macroeconomic Forecasts:
- Nigeria Real GDP Growth 2010 Forecast: 7.5% (up from 6.9% in 2009)
- Nigeria Unemployment Rate 2010: 15.5% (17.3% in 2009)
- Nigeria Inflation (annual average, % chg y-o-y) 2010: 11.8% (12.4% in 2009)
Key Trends:
There are signs that Nigeria's new government may be serious about helping the cocoa sector regain some of its earlier momentum. In July 2010, the country's new president, Goodluck Jonathan, established an inter-ministerial committee on Cocoa production and processing to explore ways of increasing the proportion of GDP which Nigeria gains from cocoa production. Meanwhile, under a new revival programme, which is being coordinated by the National Cocoa Development Committee (NCDC), old cocoa farms will be rehabilitated, agro-chemicals will be subsidised and new plantations launched. Furthermore, it appears that the industry is exploring new ways in which the consumption of cocoa-based products can be promoted among the local population. Underlying much of the new support being directed to the cocoa sector is recognition of the need to diversify the Nigerian economy; it is notable that oil continues to account for over 90% of Nigeria's foreign exchange earnings.
In spite of this new evidence of support for Nigeria's cocoa sector, we remain cautious when forecasting. It should be remembered that Nigeria's cocoa sector has seen the announcement of ambitious government-led growth programmes in the past. Such announcements were often not followed through, resulting in weak production growth and missed targets. Furthermore, numerous structural hurdles still need to be overcome if Nigeria is going to successfully compete against regional cocoa giants Côte d'Ivoire and Ghana in international markets. For one, Nigeria must secure better terms of trade with the EU for the export of processed cocoa.
Meanwhile, although plans to raise the level of domestic cocoa consumption could give the local cocoa processing industry an important boost, specific ideas about how to achieve this goal remain ill-defined. Nevertheless, although relatively low incomes for much of Nigeria's 150mn-strong population restrict the potential market for domestic producers, it is important to acknowledge that consumption dynamics in the country are changing. Over the long term, solid economic growth, a massive population and favourable age demographics mean that domestic demand could well become a major driver of local production growth.
Executive Summary
SWOT Analysis
Nigeria Agricultural SWOT
Nigeria Political SWOT
Nigeria Economic SWOT
Nigeria Business Environment SWOT
Industry Forecast Scenario
Nigeria Sugar Outlook
Table: Nigeria – Sugar Production & Consumption
Table: Nigeria – Sugar Production & Consumption
Nigeria Grains Outlook
Corn
Table: Nigeria – Corn Production & Consumption
Table: Nigeria – Corn Production & Consumption
Sorghum
Table: Nigeria – Sorghum Production & Consumption
Table: Nigeria – Sorghum Production & Consumption
Wheat
Table: Nigeria – Wheat Production & Consumption
Table: Nigeria – Wheat Production & Consumption
Nigeria Livestock and Dairy Outlook
Table: Nigeria – Poultry Production & Consumption
Table: Nigeria – Pork Production & Consumption
Table: Nigeria – Milk Production & Consumption
Table: Nigeria – Poultry Production & Consumption
Table: Nigeria – Pork Production & Consumption
Table: Nigeria – Milk Production & Consumption
Nigeria Rice Outlook
Table: Nigeria – Rice Production & Consumption
Table: Nigeria – Rice Production & Consumption
Nigeria Cocoa Outlook
Table: Nigeria – Cocoa Production, Consumption & Trade
Table: Nigeria – Cocoa Production, Consumption & Trade
Competitive Landscape
Table: Agricultural Commodity Producers & Traders
Table: Agribusiness Suppliers
Table: Integrated Agricultural Producers
Commodity Price Analysis
Grains Update
Corn
Table: Corn
Rice
Table: Rice
Soybean
Table: Soybean
Wheat
Table: Wheat
Softs Update
Cocoa
Table: Cocoa
Coffee
Table: Coffee
Milk
Table: Milk
Sugar
Table: Sugar
Downstream Supply Chain Analysis
Industry Forecast Scenario
Consumer Outlook
Food
Total Food Consumption
Table: Food Consumption Indicators -- Historical Data & Forecasts
Mass Grocery Retail
Table: Nigeria MGR Sales Value by Format -- Historical Data & Forecasts
Trade
Table: Nigeria Sectoral Trade Indicators -- Historical Data & Forecasts
Macroeconomic Forecast
Table: Nigeria - Economic Activity, 2007-2014
BMI Forecast Modelling
How We Generate Our Industry Forecasts
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