Market News

Nigeria's planned duty-free window for food imports to benefit millers and farmers: sources - S&P BLOBAL

JULY 10, 2024

Nigeria plans to suspend duties, tariffs and taxes to import wheat, maize, husked brown rice and cowpeas through land and sea for 150 days to bring food inflation under control, the Ministry of Agriculture said.

The Central Bank of Nigeria announced the plan to suspend duties as food inflation reached 40%, the highest level in 25 years, the government said July 8. According to market sources the government policy will provide support to farmers and local millers by enhancing the local supply of grains and raw materials for a small period of time. "The government doesn't want to keep the borders open, and 150 days is significantly enough to store required raw materials for the next season, which will start in February," they added.

The federal government recently announced that it will import 250,000 mt of wheat and maize from the private sector. Another Nigerian miller said: "imported grains will be used as raw materials for agricultural purpose rather than for local consumption". In the case of rice, they will import husked brown rice, as it is cheaper in the market, and these semi-processed grains will be supplied to the millers in the country. A source from Nigeria reported that "the government is importing the raw materials/semi processed grains, so that the local millers can mill it and farmers can use the grains for next season's sowing. This gives opportunities for all".

"Even if the import duty and ban are lifted, there will be less imports from other countries such as India, Thailand, etc., because of high prices and long transit period," Tijumon Cherian, sales manager at WACOT Limited, told S&P Global Commodity Insights. He added that as the import ban is lifted, rice will be reaching from Cotonou, Benin, which offers more competitive prices because of the exchange rate.

"If borders are opened and imports restart, the inflation will come down because of the high supply, and all the buyers, millers, and farmers will benefit with this," another local miller said.

Platts assessed Parboiled rice 5% STX to Cotonou on CFR basis at $611/mt, and Russian wheat 12.5% protein quality on FOB basis at $218/mt on July 9.


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