Thursday, 9 July 2015

Domestic Cassava Demand Expected to Reach $8.5bn by 20120

Photo caption: A cross section of participants at the national stakeholders’ meeting organised by Cassava: Adding Value for Africa Project Phase II, in Abeokuta, Nigeria.

The Project Coordinator, Cassava Transformation Project at the International Institute of Tropical Agriculture (IITA), Dr Richardson Okechukwu has said that the domestic demand for cassava in Nigeria is expected to hit 8.5 billion dollars by the year 2020. 
The expert in cassava production who spoke during a national stakeholders’ meeting organised by Cassava: Adding Value for Africa Project Phase II, in Abeokuta, Nigeria, noted that there has been significant increase in import substitution and export opportunities for a range of cassava end products such as flour, pellets, starch, sweeteners and ethanol, adding that industrial use of cassava is expected to grow by five times.
According to him, “There has been sizable import substitution and export opportunities for a range of cassava end products like flour, pellets, starch, sweeteners, ethanol, and snacks. More investors are coming into Nigeria to establish large cassava processing factories. More Chinese are coming into the industry and they are buying cassava roots in larges scales, particularly in the middle belt areas of Nigeria where there are few processors. So there is going to be increase in demand of cassava roots. Domestic cassava demand is expected to reach $8.5bn by 2020 andIndustrial use of cassava expected to grow by five times.”
In her keynote address entitled ‘Profitability and Growth of Cassava Business in Nigeria,’ a former Managing Director of UAC Foods Mrs Folusho Olaniyan, said that Nigeria accounts for about 21 percent of the total global cassava production, adding there is a need to open up the cassava industry in the country for real dynamic growth.
According to her, “Nigeria is the world’s largest producer of cassava at an estimated 54 million tonnes in 2013, accounting for 21 percent of the total global production. To open up the cassava industry for real dynamic growth, local and international companies need more awareness on financial benefits of using cassava-based raw materials in snacks and biscuits production, beverage, seasoning, and pharmaceutical industries.”
She pointed out that Nigeria has suffered serious naira devaluation which has affected its economy; however SMEs in the cassava starch value chain will not be affected unfavourably, since the fall in naira has made imported starch uncompetitive.
“Based on the assumption that the lowest selling starch house sells starch at N145, 000 per tonne while, highest sells at approximately N169, 000 per tonne. Net profit for lowest selling house is seven percent while net profit for higher selling starch houses is capped at 15 percent. With the drop in the value of the naira, a rare and reasonable opportunity has opened up for starch manufacturers to increase their profit margins now that imported starch price may become uncompetitive.”
Highlighting the need to strengthen smallholder farmers’ participation in the cassava industry, she said that smallholder farmer groups will have the opportunity to attract investors if they operate transparent farming models that are measurable.
“Investors are required to restructure smallholder farmer groups to operate like profitable business ventures that will have the ability to attract funding and partners within and outside Nigeria.”
Rounding off her address at the stakeholders’ meeting, Olaniyan, however recommended thatfarmers and SMEs in the cassava value chains should look inwards and discover cost saving measures, and alternative selling channels which will lower their cost production and improve profitability.
In his remarks, a representative from MATNA Foods, Olumida Adaralewa said that raw material, power, seasonal fluctuation, and pricing have been a major challenge to cassava processors. He decried the unchanged importation of flour which has continued to stifle local production. He however pointed that mechanisation is key to boosting cassava production, hence the need to put structures in place to achieve that.
Similarly, the Managing Director of Oamasal Nigeria Limited, Mr Femi Salami pointed out that there is a need to sustain the cassava policy stipulated by the Federal Government’s Cassava Transformation Agenda. He however pleaded that funds should be made accessible to farmers and processors.

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