BMI View: One of the last acts of the outgoing administration has been to revise the target for a ban on rice imports from 2015 to 2017. While not a hugely surprising or significant move in itself, it is emblematic of the gap between the government's ambition and its delivery on agricultural policy. Nigeria continues to import as much as two - thirds of the rice it consumes and is even more reliant on wheat and sugar imports to meet burgeoning domestic demand. However, it would be churlish to deny the genuine progress that has been made under the Minister of Agriculture, Akinwumi Adesina : the cocoa sector has received much needed attention in the form of improved seedlings and distribution of key inputs , while we see sturdy foundations for growth in livestock, sugar and rice production , even if the results will be reaped by the new administration.
|Agribusiness Market Value|
|BMI Market Value By Commodity (2011-2019)|
Cocoa production growth to 2018/19: 53.9% to 381,600 tonnes. Global prices will remain sufficiently elevated to stimulate investment from government and private sector bodies.
Corn consumption growth to 2019: 1.5% to 7.9mn tonnes. Weaker demand from the livestock industry will hold down consumption growth.
BMI universe agribusiness market value: increase of less than 0.1% year-on-year (y-o-y) to USD5.97bn in 2015; forecast to grow by 35.6% from 2014-2019.
Real GDP growth 2015: 3.9% y-o-y (down from 6.3% in 2014).
Consumer price index (% y-o-y ave) 2015: 10.0% (up from 8.1% in 2014).
The latest reports from Bloomberg suggest that farmers in the south west of Nigeria are seeing yields dropping by as much as 40% in the early stages of the mid-crop harvest. However, the outlook in the south-eastern cocoa-growing regions is reported to be much more positive due to plentiful rainfall. We have revised down our forecast for 2014/15 cocoa output to 225,000 tonnes, below the International Cocoa Organization's expectations of 235,000 tonnes, as this latter figure was released before the full impact of the drought emerged.
Around 1.1mn birds across more than 300 farms in 18 states have been exposed to the bird flu virus in Nigeria, the Agriculture Ministry said in March. The disease outbreak has now been running for several months. Tens of thousands of birds have been destroyed by order of the veterinary authorities, with tens of thousands more dying of the disease. The disease has affected farms in states as far apart as Kano in the north and Lagos in the south, although the authorities report that the number of new cases is on the decline.
Plans are in motion to construct an 'ultra modern' poultry facility in Anambra State. A memorandum of understanding was signed in April 2015 by the state's governor, Willie Obiano, and local agribusiness company Lynden Integrated Farms, with the latter contributing 90% of the finance for the USD61mn project, which is due to be completed within fifteen months, according to reports in local media. Within three years, the farm is expected to have the capacity for 400,000 broilers and will employ 200 people.
The presidential election campaign is estimated to have delivered a spike in rice consumption in H115, as rival candidates sought to gain the support of voters with gifts of rice in the run-up to the poll in April. The USDA revised up its 2015 forecast from 6.1mn to 6.5mn tonnes and we have followed suit. We expect this to be a temporary blip and that demand will fall back to around 6.2mn tonnes in 2016.