Africa snaps up Canadian wheat

Africa snaps up Canadian wheat

Engin OZER Engin OZER
27/04/2018
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27.04.2018 - Pretoria / The International Grains Council is forecasting that demand will be up five percent in Nigeria for facilities like this in Bauchi province in 2017-18. It predicts it will be up six percent in Sudan, 30 percent in Kenya, 60 percent in South Africa, 70 percent in Ethiopia, 20 percent in Angola and 30 percent in Tanzania. 

 Countries such as Nigeria and Ghana are part of a growing trend in sub-Saharan Africa, where wheat sales are booming.

 Wheat demand is exploding in sub-Saharan Africa, and Canada is getting more than its fair share of the action.The International Grains Council said in a recent report that the region is "propelling year-to-year growth” in global wheat import demand.

 The IGC is forecasting that demand will be up five percent in Nigeria in 2017-18, six percent in Sudan, 30 percent in Kenya, 60 percent in South Africa, 70 percent in Ethiopia, 20 percent in Angola and 30 percent in Tanzania.

 Bruce Burnett, director of markets and weather with Glacier MarketsFarm, said it is a region that should be closely monitored.

 "The African countries are starting to really take substantial tonnage,” he said.

"It is an interesting trend.

 He attributes the surging demand to a combination of population growth and steadily improving economies.Nigeria is Canada’s largest wheat customer in Africa. It imported 407,300 tonnes of Canadian wheat through the first seven months of the 2017-18 crop year.

 "With the recovery in oil prices the economic growth (in Nigeria) is strengthening considerably,” said Burnett.Cam Dahl, president of Cereals Canada, believes Nigeria could import one million tonnes of Canadian spring wheat in 2017-18.

 He said wheat demand is growing rapidly in West Africa, and there is an especially good opportunity for Canadian spring wheat, ironically because of the spread of Black Sea wheat into the region.

 "What we’re finding in countries like Nigeria is they can use a blend of CWRS and Black Sea wheat and produce the quality of flour they’re looking for at a cheaper price,” said Dahl.The blend is cheaper than the U.S. hard red winter wheat-based blend they were previously using.

 "In Nigeria we have almost completely pushed out the U.S.,” he said.

 It is the same story in Ghana, which has imported 203,100 tonnes of Canadian spring wheat through the end of February.

 "It’s a shift in the market and it’s a shift in focus and it’s a growing opportunity,” said Dahl.

 That’s why Nigeria and Ghana have become regular stops on Canada’s annual new crop missions. Kenya is on the list for future trips. It imported 104,700 tonnes of Canadian wheat through the first seven months of 2017-18.Burnett believes there is more growth potential in some African markets than there is in many Asian countries, where there have already been many years of exponential growth.

 "There’s a fairly sharp increase in activity there in countries you wouldn’t expect,” he said.

 "I don’t think there’s very many people out there that would pick Ghana as a big customer for Canadian wheat.”

 To put it in perspective, Ghana has bought the same amount of Canadian wheat as the United Kingdom during the first seven months of the 2017-18 marketing campaign. Nigeria’s purchases are nearly double the U.K.’s.

 The IGC listed a variety of reasons for expanding import demand in the various African nations.

 Wheat is generally more affordable in Nigeria’s urban areas than locally grown staples such as cassava, millet and yam. As well, wheat is being used for humanitarian aid in that country.In Kenya and Angola there is increased milling capacity to meet surging demand.

 South Africa’s imports are way up because drought destroyed last year’s wheat crop.

 Ethiopia’s demand is on the rise due to increased government tendering to rebuild its wheat stocks.

producer.com


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