New Food research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 07/19/2013 -- Although oil is by far the biggest foreign exchange earner for the Nigerian economy, cocoa has also made a significant contribution in recent years, bringing in 900mn USD in export earnings in 2012, according to the government. However, the short to medium term prospects for the sector have been darkened by the fall in global prices expected in 2013 and 2014 as global demand continues to flatline. Despite the government's desire to increase Nigeria's market share, a temporary setback to production could be disastrous for the sector. Meanwhile, rice importers have tried to beat government tariff hikes by buying in stocks before the new rules and smuggling is on the rise as criminal gangs take advantage of restrictions on rice and poultry imports.
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- Poultry consumption growth to 2017: 37% to 378,000 tonnes. Demand will continue to outstrip supply with smuggling increasing to meet consumer demand for frozen poultry.
- Rice consumption growth to 2017: 28.2% to 6.7mn tonnes. Tariff hikes imposed by the government are unlikely to have the desired effect as lower prices in the global market will combine with higher incomes to sustain steady growth in consumption of mostly imported rice.
- BMI universe agribusiness market value: 2.4% year-on-year (y-o-y) decrease to US$7.5bn in 2012/13, forecast to grow on average 2.5% annually between 2011/12 and 2016/17.
- Real GDP growth 2013: 6.7% y-o-y, up from 6.6% in 2012.
- Unemployment rate 2013: 23.6% (down from 24.4% in 2012).
- Inflation (annual average, % chg y-o-y) 2013: 9.1% (down from 12.2% in 2012).
Key Revisions To Forecasts
- Cocoa production forecast for 2016/17 revised down, to 273,000 tonnes (compared with a previous forecast of 331,000 tonnes). Significantly lower global prices in the early and middle years of our forecast period will put the brakes on the revival of the sector.
While the government has ambitious plans to increase production of cocoa significantly to almost 500,000 tonnes by 2015 and to 1mn tonnes by 2018, lower prices in 2013 and 2014 combined with low levels of fertiliser usage cause us to remain sceptical about the possibility of meeting these goals. BMI see LIFFE cocoa prices averaging GBP1,350/tonne in 2013 and 2014 before averaging higher in the following years. Cocoa production has been targeted for development by the government with the setting up of the National Cocoa Development Committee which has distributed millions of seedlings and improved access to fertilisers and other inputs. However, if farmers consider it wise to continue to grow other more profitable crops at the expense of cocoa - a move which is likely in the circumstances - then all of these efforts may be in vain.
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