Nigeria: Commercial Market in the Making
By Barb Baylor Anderson
Nigeria faces its share of security challenges, from militant groups, bombings and abductions, to conflicts between local farmers and nomadic herdsmen.
Even so, the soybean area harvested in this African nation, along with soybean imports, are simultaneously increasing as food and feed demand rise. Nigeria is Africa’s most populous country, and its growing middle class is driving demand for animal protein.
“Nigeria already has a population of 203 million, and that is forecast to increase by 62.7 percent or another 132.4 million between now and 2040. That, and expected expansion in per capita income, promises to make Nigeria a major growth market for soybeans and soybean meal in the future,” says John Baize, international trade consultant.
Nigeria grows soybeans for domestic use traditionally in the northern part of the country, although more farmers are expanding production into the south. USDA’s Foreign Agriculture Service (FAS) forecasts Nigeria’s soybean production in the current marketing year will reach 1.15 million metric tons, up nine percent from USDA’s 2018-19 estimate of 1.05 million metric tons. Harvested area will be up four percent with yields set to climb almost five percent.
FAS officials also recently noted Nigeria has the potential to become a significant market for oilseeds, oil meals and oils for domestic and industrial consumption. FAS forecasts Nigeria’s soybean consumption this year could reach 1.18 million metric tons, up nearly 5.5 percent.
“Nigeria is the second-largest soybean market in Sub-Saharan Africa, so it is committed to soybean meal and oil as essential raw materials for their agro-industrial complex,” says Peter Goldsmith, University of Illinois ag economist and principal investigator and director for the USAID Feed the Future Lab for Soybean Value Chain Research (SIL). “Poultry and aquaculture production are growing rapidly and the need for feed far outstrips local supply.”
According to the American Soybean Association (ASA) World Initiative for Soy in Human Health (WISHH) program, the Nigerian poultry industry accounts for the majority of U.S. soy purchases in Sub-Saharan Africa. Recent estimates indicate current demand for soy imports is about 200,000 metric tons per year and will rise as Nigeria’s poultry industry grows.
FAS estimates Nigeria’s soybean imports may reach 85,000 metric tons in 2019-20, up nearly 31 percent from a year ago. Last year, Nigeria’s soybean imports came from the U.S., India, United Kingdom and Thailand. Nigeria’s soybean exports will total some 38,000 metric tons.
The ASA/WISHH program has worked to build demand for U.S. soy in Nigeria for a decade. WISHH and the U.S. Soybean Export Council (USSEC) organized a meeting with Nigerian poultry leaders earlier this year to transition U.S. international marketing management of the poultry sector from WISHH to USSEC. USSEC will manage commercial market development in that sector while WISHH will manage market development for aquaculture and human foods.
“ASA/WISHH’s work in Nigeria is a prime example of why visionary Illinois soybean farmers led creation of WISHH nearly 20 years ago,” says Daryl Cates, WISHH chair and soybean farmer from Columbia, Illinois. “WISHH started building demand and driving growth for U.S. soy in Nigeria in 2010, laying the foundation for poultry feed markets. As USSEC takes over that sector, WISHH will expand markets for U.S. soy in the aquaculture and food sectors.”
Michael David, HOMICS International LLC and USSEC consultant, says Nigeria’s government projects the poultry and aquaculture sectors will grow an average 20 percent per year between 2018–2025. “This creates a huge demand pull on soybeans as the preferred source of protein and essential amino acids,” he says. “Nigeria’s domestic production growth averages less than three percent per year, so the supply shortfall will continue to widen and Nigeria will increasingly depend on imports to satisfy growing demand.”
Growth in other market sectors also is anticipated. “Nigeria has a long history going back to the 1960s of promoting soybeans for human nutrition as well,” says Goldsmith. “So, consumer markets for soy-based milk, yogurt and flour are relatively strong.”
“If the current recovery from economic recession which started in 2016 is sustained, and Nigeria returns to its previous GDP growth path of 7-10 percent per year, import demand for soybeans and meal may expand to an estimated three million tons in the medium term,” says David.