Agriculture
China low price offering for Nigeria Cassava chips frustrate contract
—-high interest rate killing sector
—-transportation, port charges, high cost of shipping
—-non disbursement of $40m Afrinexim loans
By Omoh Gabriel Business Editor
The price tag on Nigeria cassava chips by China has made it difficult for Nigeria cassava chip exporters to execute the contract the federal government entered into with China for the export of cassava chips from Nigeria to China. China importers it was learnt are offering Nigerian exporters $250 per tonne instead of $400 it goes for in Europe and $350 in Israel. Business advisory services officials at the Bank of Agriculture have advised Nigerian cassava chips exporters that if the contract price is less than $400 per ton the business will not be viable. Vanguard gathered that the Bank of Agriculture team suggested that exporters should explore European markets that offer $400 or Israel that offers $350 as against China offering of $250. The contract for the export of cassava was negotiated by the Obasanjo regime in his cassava initiative and is being undermined by the Chinese.
This aside, indications are also that the desire of the federal government to develop a viable value chain in the agricultural sector is being hampered by the current regime of interest rate of 22 per cent among other factors. Operators in the cassava end of the value chain especially cassava chips processors are labouring in pain as a result of high interest rate and the farm gate price of raw cassava tubers. They also said that high cost of internal logistics (transportation), high cost of shipping, hurdles in documentations with customs, finance needed for capacity building, are among the numerous challenges facing value added production in the country.
According to submissions by various stakeholders at meetings with government functionaries, bankers and export financing agencies, which Financial Vanguard sighted cassava chip processors the challenges of the cassava industries are that in Nigeria most cassava peasant farmers do not make profit and in actual fact are suffering. Processors said that the Bank of Agriculture does not pay attention to them and it has been difficult for them to access credit facilities and the bank claims of financing eight thousand cassava farmers last year planting season was a gimmick.
According to their submission to government for the average cassava farmer it cost two hundred thousand naira per hectare from clearing to harvesting of cassava. Nigeria peasant farmers currently plant cassava varieties that yield twelve tonnes to fifteen tones per hectare saying that in their calculation they operate at a loss. Their submission at the stakeholders meeting also pointed out that agriculture in Nigeria currently employs seventy percent of the nation’s population and contributes only 0.5 percent to non oil export. This they argued is what is playing out in the level of poverty in the country. They said that earnings of Nigerian farmers as compared to other nations with less employment in agriculture and high export contributions or earnings i.e. South Africa are very low.
Their situation they said is further worsened by the activities of middle men, Cassava merchants, who buy from the farmers at a cheap rate and sell to processors at a high rate pinning the cost differential on high transportation cost from the farms to the factories. They said that last year, a pick up load of cassava raw tubers from different locations in Nigeria, which does not meet the correct measurement of 2.5 tonnes was going from fifty thousand naira to sixty five thousand naira depending on location. According to them the international commodity market price of cassava chips is fixed. Nigeria has other competitors in cassava products such as Thailand, Vietnam, Brazil etc. To be cost effective they said that processors want to buy cassava raw tubers for N8,000.00 per ton knowing fully well that the international market price for cassava chips is fixed. They said that when processors are processing, they work with the ratio of four tons of raw tubers to produce one ton of cassava chips with diameter 3mm to 5mm (peeled). They claimed that the cost of transportation of a thirty tonnes truck from Lagos to Sokoto is about N300, 000.00 this is further compounded by the high shipping cost in Nigeria as compared to the rest of the world.
Also cited as hampering the bid to increase non oil export through cassava chips export is the bottle necks in customs, bribery, and fumigation. They claimed that government officials make exporters to buy materials that will be used for fumigating the containers and the documentation hurdles that follow.
Counting their woes they said that lack of adequate finance to build capacity is also hampering cassava chip production in Nigeria. As a result of lack of financing producers are not able to meet production targets, buy more machineries and mop up dry cassava chips around Nigeria i.e. states like Taraba, Nassarawa, Benue, Kogi sokoto.
Some cassava peasant farmers allow their cassava crops to stay over two years and above as a result of no buyers, no access roads to their farms to evacuate the products and the tubers rot away. Some dry their cassava in certain areas i.e. Akwanga, Nassawara State and use as fire wood as a result of no buyers.
These they said were some of the challenges faced by cassava chips processors and exporters and the main reason why Nigeria after signing a contract with China to export 3.2 million metric tonnes of cassava chips annually is yet to execute the contract. Cassava chips processor said that the offering price of the Chinese with which the federal government signed a contract for cassava chip export is a big issue, when compared with the Nigerian cassava raw tuber price processing and exporting. BOA at the stakeholder’s consultation forum informed that if the contract price is less than $400 per ton the business will not be viable. The team suggested that the exporter explore European markets that offer $400 or Israel that offers $350 as against China offering of $250.
They said that they were taken aback on the mere fact that the credit line open for them by Afrinexim bank has not been disbursed. Explaining the rationale for approaching Afrinexim for credit facility officials of the ministry of Agriculture said “The main reason of going to Egypt for the Afrinexim for the loan facility by the Ministry is as a result of the high cost of lending by Nigerian Banks, twenty two percent per annum, how do processors and exporters survive? However, two options were opened to the processors, exporters either to access the $40million loan directly with the Afrinexim Bank or go through the Bank of Industry and Bank of Agriculture.
Only Thai Farms International Limited at the meeting opted to deal with Afrinexim Bank Egypt directly. The representative of Flour Mills Nigeria disappeared after a while on sighting Bank of Agriculture and Bank of Industry complaining that they are slothful in their dealing and commercial banks are better off. Other processors, exporters present at the meeting said that the Bank of Agriculture had already taken their applications. The ministry promised to look into the request that the use of rail way lines to convey products from locations to the ports will be cheaper and promised that to liaise with the Federal Ministry of Transport to work it out. The use of Flour Mills Nigeria Limited They were also promised that government will look into shipping cost, bottle necks of other agencies i.e. customs, inspection, quarantine; their ministry will liaise with the agencies involved.
Vanguard learnt that a Private meeting sections was held between the banks (BOI, BOA), some ministry officials and Afrinexim representative, The Federal Ministry of Agriculture Officials, Afrinexim Egypt representative, likewise the processors, exporters,
The exporters at the meeting include Thai farms, Sajaab farms, Flo Mulvina Nig.
The exporters’ presentations were on their success in dry chips export to countries like Israel and china. Basically their presentations were skewed towards the numerous challenges they faced in the course of exportation. The summary of their challenges include: Fluctuating prices of cassava tubers; Competition with garri producers Overarching bureaucracy at the ports; Low demand price for chips in the booming Asian countries; Need for support in increasing their own production channels; Logistics problems
Mr Ada Osakwe, Chief Awoniyi briefed the meeting of their trip to Egypt to secure $40 million loan and what was discussed and agreed. Processors who had put in their applications were said to have made the following request to have their own farms apart from out growers attached to them, Trucks, more machineries, advance drying techniques among others. A time frame it was learnt was picked and processors, exporters were made to know that the bank of Agriculture will put in their own charges. Since cassava chips has the drying season as its season in the world for mass production Bank of Agriculture agreed to submit the loan request to Afrinexim on time and once given the green light will release money to processors, exporters. Bank of Agriculture also promised that by April this year they would have attended to all who put in their applications.
According to the processors up till now, nothing has happened, their books has not been Okayed by Afrinexim Bank Egypt. The cassava processors alleged that officials in the Federal Ministry of Agriculture and Rural Development overseeing the Bank of Agriculture are not doing anything about it and Processors/ exporters are left to their faith. The said that it was also agreed that once these front line processors, exporters are given the money applied for and they are judiciously utilised, repaid others processors, exporters will come on board. But this is yet to happen as the books of Bank of Agriculture is not properly kept and it is affecting processors, exporters denying them from accessing the loan, since they are passing through the Bank of Agriculture.
The cassava bread intervention they claim has suffered the same fate.
While revealing Afrinexim partnership profile with Nigeria, Mr. Adomakoh listed
Successful projects like the Indorama fertilizer plant and Notore’s cocoa processing
Plants and advised that to succeed in these projects there must not be an overarching government influence on the cocoa and starch exports of the past.
Some farmers’ associations in Lagos State have predicted further drop in the price of the commodity ahead of the yuletide following Governor Babajide Sanwo-Olu’s slash in the price of Lagos rice.
The farmers made this known in separate interviews with journalists on Sunday in Lagos. Mr Sanwo-Olu recently slashed the price of Lagos Rice from N64,000 to N57,000 per bag, which the farmers described as a good development.
The vice chairman of the All Farmers Association, South-West and Lagos State chapter, Sakin Agbayewa, commended the state government for the strategic move.
Mr Agbayewa said the development would likely bring about competition in the sector, thereby crashing further the price of the commodity.
“And hopefully, we want to believe that with this competitive price and competition, maybe in one week or two weeks, the price of rice will further drop.
Presently, the price of foreign rice is between N52,000 and N56,000, and that depends on where you are buying it. If you are buying it very close to the border, it comes at N52,000.
If you are buying it from the main market, it sells between N54,000 and N55,000 per 50kg bag, and the extra cost comes off as transportation costs,” Mr Agbayewa said.
According to him, if foreign rice sells between N52,000 and N56,000, the consumers may be buying rice that has been stored for over three to five years or even expired.
“It is a good buy, I would prefer the Lagos rice at N57,000 than buy cheaper rice with lower quality,” he said.
On his part, the chairman of the Rice Farmers Association of Nigeria, Lagos State chapter, Raphael Hunsa, commended the Lagos State government for the initiative.
“The government is always on top in terms of policy decisions that affect the people.
The Lagos State Governor Babajide Sanwo-Olu dropping the price of rice is a great move.
If production is low, definitely the demand will be high, and subsequently, the price will be high too,” Mr Hunsa said.
The Lagos State government pegging a bag of rice at N57,000 this season is most beneficial to Nigerias.
“We, however, urge the government to continue to support rice farmers to increase our production, and subsequently, the price of rice and other staples will continue to drop.
This Christmas is now at our door, and everyone will celebrate well with this drop in price,” Mr unsa said. NAN
The National Agricultural Land Development Authority says its ongoing Renewed Hope mega farms estates in Kwara and Ekiti will lift no fewer than 100,000 people out of poverty. It said the project would also create 12,000 direct jobs, 30,000 indirect jobs. The executive secretary of NALDA, Cornelius Adebayo, said this on the sidelines of an event organised by the organisation at CoP30 and MoU signing ceremony in Belem, according to a statement on Thursday. He identified the estates as one of the organisation’s flagship projects under the Renewed Hope Agenda of President Bola Tinubu. He said they were large-scale agricultural settlements covering between 5,000 and 25,000 hectres.
Mr Adebayo said the pioneer estates had begun in Ekiti and Kwara with over 1,200 hectares and 1,050 hectares under cultivation. He said the agency’s carbon-credit initiative is not only a climate solution but also a socio-economic reform that empowers farmers. Mr Adebayo explained that under the Mega Farm Estates, each farmer is allocated five hectares of farmland. He said that this would enable them to earn sustainable agricultural income while also benefiting from a share of carbon credit revenues generated through structured tree-planting and estate-wide reforestation. “Our goal is to move Nigerians from a low-income bracket to a true middle-class economy by combining agricultural productivity with carbon-credit earning, farmers can become independent, prosperous and globally competitive.
These estates are fully mechanised, equipped with complete infrastructure such as roads, irrigation systems, processing hubs, housing, and energy systems to function as full agricultural settlements. As part of their sustainability framework, each estate will receive comprehensive perimeter fencing, along which NALDA will plant thousands of climate-resilient trees capable of generating significant carbon credits over time. This ensures that beyond food production and job creation, farmers within these estates can earn additional income from carbon markets, allowing them to transition from low-income status into the middle-income economy,” he said.
Mr Adebayo said the event provided a platform for Nigeria to share its contributions to global climate solutions, exchange knowledge with partners and strengthen collaboration on nature-based approaches that support mitigation, adaptation, and sustainable land use. He said that over the years the NALDA’s operational mandate was expanded to directly align with Nigeria’s climate commitments by integrating afforestation, reforestation, sustainable land management, and biodiversity enhancement into its plantation programmes. Mr Adebayo said that NALDA’s plantations across different ecological zones represented one of the most promising nature-based climate assets in Nigeria. “They hold the potential to generate high-integrity carbon removals, attract climate finance, and empower thousands of young people and rural farmers. Our presence at CoP30 is to spotlight these transformational efforts and outline the ambitious NALDA Plantation Carbon Roadmap,” he said. NAN
The director-general of the Pan-African Organisation for Small and Medium Industries, Henry Emejuo, says cassava remains central to Africa’s food security and industrial development. Mr Emejuo, who spoke on the sidelines of the just-concluded three-day Africa Cassava Conference in Abuja, described the crop as both an economic commodity and a daily staple across the continent. He said cassava’s versatility made it indispensable in households, as there was hardly a day when a Nigerian or African home did not consume a cassava-based product such as garri or tapioca. Emejuo said the crop also held significant industrial value, producing materials such as ethanol, high-quality cassava flour, sorbitol and healthy sweeteners used across manufacturing sectors.
He said the conference provided a critical platform for policymakers, scientists and industrialists to harmonise strategies that would deepen cassava utilisation and unlock its economic potential. The PAOSMI boss said:” Delegates from more than seven African countries spent three days examining policy, technical and scientific issues affecting the cassava value chain.” He described the conference as a success, saying the outcomes would guide countries in expanding the industrial use of cassava and in strengthening its role in driving economic development. Mustafa Bakano, national president of the Nigeria Cassava Growers Association, said deliberations from the meeting would address key challenges faced by smallholder farmers, including access to finance, farming practices, and industrial standards.
According to him, the presence of financial institutions such as the Bank of Industry offered stakeholders the opportunity to develop practical solutions to present to governments. Michael Kento, an assistant professor of Agricultural Sciences and Food Security at the University of Juba, South Sudan, described the conference as an eye-opener for his country. He expressed South Sudan’s zeal to learn from Nigeria’s leadership in cassava production, especially in extension services, processing, marketing, policy development and research. Mr Kento said Nigeria’s cassava success would translate to the continent’s success, and deeper collaboration between both countries would strengthen the subsector and improve food security, nutrition and industrial growth in South Sudan.
Emmanuel Bobobee of the Kwame Nkrumah University of Science and Technology, Ghana, said mechanised cassava production was key to transforming cassava into an engine for Africa’s next phase of industrial development. Mr Bobobee said his mechanical cassava harvester, already in use in several countries, could support large-scale production if adopted more widely. He added, ”The participation of seven countries demonstrates rising continental interest in cassava, and the crop should be placed at the centre of Africa’s fourth industrial revolution. Ghana and Nigeria share similar agricultural challenges, and both countries stand to benefit from sharing innovations and strengthening cross-border collaboration.*
The three-day conference brought together policymakers, researchers, industrialists and farmers to explore opportunities in processing, technology adoption, export and the development of cassava-based products across Africa. It ended with a dinner and the presentation of awards to distinguished players and partners in the sector.
-
News3 days agoNigeria to officially tag Kidnapping as Act of Terrorism as bill passes 2nd reading in Senate
-
News3 days agoNigeria champions African-Arab trade to boost agribusiness, industrial growth
-
News3 days agoFG’s plan to tax digital currencies may push traders to into underground financing—stakeholders
-
Finance1 week agoAfreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m
-
Economy3 days agoMAN cries out some operators at FTZs abusing system to detriment of local manufacturers
-
News1 week agoFG launches fresh offensive against Trans-border crimes, irregular migration, ECOWAS biometric identity Card
-
News3 days agoEU to support Nigeria’s war against insecurity
-
Uncategorized3 days agoDeveloping Countries’ Debt Outflows Hit 50-Year High During 2022-2024—WBG