The wheat value chain continues to play key roles in providing employments for the active segment of the population while strengthening the nation’s food security position.
The jobs and the affordable meals that are being delivered to the local markets through the bold developmental actions pursued by the local wheat millers couldn’t have come at a better time as Nigeria’s unemployment situation and inflationary trends grow agonizingly worse.
Data released by the National Bureau of Statistics (NBS) indicates that unemployment, underemployment and youth unemployment/ underemployment, reached 33.3 %, 22.8 %, 42.5% respectively in the 4th quarter of 2020 in the country.
Meanwhile, the increasing dietary shift to more affordable wheat derivative foods such as bread, semolina, pasta and noodles has led to expanded production, processing, warehousing, distribution/ logistics, fleet management, last-mile and retailing activities in the wheat value chain, consequently lifting the employment generating capacity of the value chain from 10 million to 12 million.
Coming at such a crucial time when the impact of the COVID-19 pandemic incessantly weakens the economic contributory latency of other sectors, the robust activities being generated along the wheat value chain are a rare lift for Nigerian households.
The wheat value chain does not only provide jobs for the population, it also ensures the population has consistent access to affordable quality foods.
In the past year, the prices of Rice, Garri, millet and Beans, which are notable national staples, have risen sharply by 21.1%, 114.1%, 57.2% and 66.6%, respectively, while the prices of wheat derivative foods have been largely cushioned from the adverse inflationary trend by local millers.
The flour milling companies, under the aegis of the Flour Milling Association of Nigeria (FMAN), and the bakers, intentionally absorb the extra cost of production occasioned by the tough operating environment, in order to keep feeding the population.
Take for instance bread, a widely consumed staple food produced from wheat. The wheat millers continue to ensure that while other food commodities increased in price by 50% and more in the past year, bread is shielded from such debilitating trend, increasing by just 28.5% and the average daily production output of 10 million loaves is maintained. To this end, bread has traditionally become the cheapest carbohydrate option available for Nigerians.
The availability of quality flour brands at competitive prices helps the bakers to maintain production level, forgo downsizing and help meet customers demands, despite the adverse effects of the COVID-19 outbreak. Bakers, therefore, understand the importance of the millers’ intervention efforts.
How did the flour millers achieve such an important economic balancing act? The flour millers intentionally track commodity prices in the carbohydrate food staple space to keep the price of inputs for bread production competitive. The same goes for every other wheat derivative food such as semolina, noodles and pasta, which the flour millers intentionally ensure are kept within affordable price boundaries of the consumers.
A global consulting firm, KPMG, attests to the important roles played by flour millers in feeding a national population that has over the years been priced out of the other staple foods due to continuous food price inflation, a spike in unemployment rate and a declining income level.
In a report themed ‘Wheat-based consumer foods in Nigeria’, KPMG underscored the fact that the flour milling businesses that operate in Nigeria have been a source of “low-cost convenient staple and baked foods” for the teeming population.
This also explains why 45% of the food variants served in Nigerian homes are produced from wheat. As more foods are being served to nourish, sustain and strengthen the Nigerian populace, by direct correlation, more jobs are also being created by the wheat millers and the wheat value chain.
Speaking on the employment-generating and food security roles played by the wheat value chain, Mr Ashish Pande, Managing Director of Crown Flour Mill (CFM) Limited, a subsidiary of Olam, an agribusiness conglomerate, said: “Presently, the wheat value chain accounts for over 10.5 million jobs generated annually in Nigeria. This of course has placed the wheat value chain at the centre of the various economic development agenda of the Federal Government of Nigeria.”
To reiterate the nutritional and economic contributions of flour millers, Ashish expatiated further, “Presently, the wheat value chain adds N2.3 trillion to Nigeria’s GDP annually, being the average yearly spend on wheat derivative foodstuffs; and accounts for 75 million of the daily food portions in Nigerian households.”
He said, “To scale up its contributions, the milling association continues to invest N500 million annually in seed trials, research, training of smallholder wheat farmers and reimbursing the various farming research institutes in the country to ensure that the current local production levels of wheat improve significantly. While these efforts have ensured that we keep providing affordable and quality food for the growing Nigeria population, it has also deepened the rate of jobs generated for the young and active of the population.”
Similarly, Professor Adetunji Kehinde, provost of the College of Agriculture, University of Osun, provided an insight into the robust activities that keep turning out the impressive job creation rates in the wheat value chain.
He said, “Like other agro-products, the wheat value chain has created and is still creating employment at the pre-production (procurement of loan for land, labour, and training), production (seed procurement to field management till harvesting time), harvest (methods, tools, labour, and transport) and postharvest (handling, storage, processing, and milling), preservation, packaging, distribution and marketing levels. The wheat milling industry is one of the most important drivers of employment in the food sector.”
Considering the contributory role that the wheat value chain plays in employment generation and food security, all hands must be on deck to support flour millers, in their current efforts to strengthen the all-important value chain.
Formulating and implementing a developmental agro and financing policy framework that would ensure that flour millers continue to access wheat would help maintain the key roles of providing affordable staple foods and employment for the Nigerian population. This should be the focus of the Federal Government and relevant agencies and key stakeholders, especially at this challenging period.
Profit Takers Drag ASI to 37,847.07 Points, Market Cap to N19.725trn
By Dipo Olowookere
The All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited depreciated by 1.81 per cent or 698.23 points on Tuesday to finish at 37,847.07 points as against 38,545.30 points it ended a day earlier.
This was majorly caused by the actions of profit takers, who pounced on the market to offload some stocks that have gained in the past few trading sessions.
This also affected the market capitalisation of the stock exchange, which reduced by N364 billion to finish at N19.725 trillion compared with N20.089 trillion it ended on Monday.
Business Post reports that the market breadth closed negative yesterday with 17 price gainers and 23 price losers led by Airtel Africa, which lost 10.00 per cent to close at N678.00.
Mutual Benefits Assurance went down by 7.32 per cent to trade at 38 kobo, Cornerstone Insurance declined by 7.27 per cent to 51 kobo, Learn Africa depreciated by 648 per cent to N1.01, while Ikeja Hotel fell by 6.19 per cent to 91 kobo.
On the other side, Fidson shook off the bad performance of Monday to close as the best-performing stock by rising by 10.00 per cent to N5.06.
Vitafoam gained 9.68 per cent to trade at N13.60, Red Star Express appreciated by 9.55 per cent to N3.67, Veritas Kapital improved by 9.09 per cent to 24 kobo, while Courtville gained 5.00 per cent to quote at 21 kobo.
The most traded stock of the day was Transcorp as it sold 42.4 million shares valued at N37.2 million. Vitafoam traded 20.1 million equities worth N271.6 million, Dangote Sugar exchanged 17.6 million stocks for N312.1 million, FBN Holdings sold 12.4 million equities valued at N88.5 million, while Access Bank traded 11.5 million shares for N98.4 million.
At the close of business, investors traded a total of 218.3 million stocks worth N2.7 billion in 3,524 deals compared with the 209.2 million equities worth N1.8 billion transacted in 3,390 deals on Monday, indicating increases in the trading volume by 4.33 per cent, trading value by 54.59 per cent and the number of deals by 3.95 per cent.
In terms of the performance of the sectors yesterday, the energy and consumer goods sectors appreciated by 0.05 per cent and 002 per cent respectively, while the industrial goods, insurance and banking counters depreciated by 1.13 per cent, 0.39 per cent and 0.07 per cent apiece.
Local Currency Gains N1.67 Against Dollar at I&E
By Adedapo Adesanya
The Naira strengthened against the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange market on Tuesday.
Business Post reports that during the session, the local currency appreciated by N1.67 or 0.4 per cent to close the session at N410/$1 in contrast to the previous session’s N410.67/$1.
It was observed that the domestic gained this strength despite coming under a significant FX demand pressure at the market segment.
Yesterday, the I&E recorded a turnover of $169.07 million, 79.5 per cent or $74.9 million higher than the $94.17 million recorded on Monday.
At the parallel market, the value of the Naira paired with the American Dollar remained unchanged yesterday at N500/$1.
But against the Pound Sterling, the domestic depreciated by N3 at the black market to sell for N713/£1 compared with N710/£1 it traded a day earlier.
Also, the Naira lost N3 against the Euro at the unregulated segment of the market to trade at N595/€1 in contrast to N592/£1 of the earlier day.
At the interbank segment of the market, the Nigerian currency appreciated against the American currency by one kobo to quote at N410.19/$1 versus N410.20/$1 it traded on Monday.
Cryptos Languish in Bearish Territory
Five of the seven cryptocurrencies tracked by Business Post on Tuesday were in bearish territory amid a growing crackdown on the virtual asset in China.
In the Asian country, authorities in the southwest province of Sichuan recently ordered bitcoin mining projects to close.
The State Council, China’s cabinet, last month vowed to clamp down on mining and trading as part of a series of measures to control financial risks.
The world’s biggest cryptocurrency, Bitcoin (BTC) has lost over 20 per cent in the last six days alone and has shed half of the value it traded in April.
Yesterday, it dropped 0.8 per cent to trade at N16,474,637.69, Ethereum (ETH) lost 14.1 per cent to sell at N901,355.08, Ripple (XRP) dipped by 6.5 per cent to trade at N305.00, Litecoin (LTC) declined by 1.1 per cent to trade at N63,800.00, while Tron (TRX) depreciated by 19.6 per cent to sell at N25.60.
But the Dash (DASH) appreciated by 4.4 per cent to trade at N70,000.00, while the US Dollar Tether (USDT) gained 0.8 per cent to sell for N516.86.
Oil Falls as OPEC+ Mulls Raising Supply
By Adedapo Adesanya
Crude oil prices settled slightly lower on Tuesday as the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) discussed raising oil production.
Earlier in the day, the price of the Brent crude hit a two-year high of $75 per barrel but it later dropped to $74.85 per barrel, losing 23 cents or 0.18 per cent while the West Texas Intermediate (WTI) declined by 0.29 per cent or 58 cents to trade at $73.08 per barrel.
OPEC+ is discussing a gradual increase in oil output from August, but no decision has been taken on the exact volumes, an OPEC+ source reportedly said on Tuesday, according to Reuters.
The alliance is already returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to unwind last year’s record output curbs gradually as pandemic-hit demand recovers.
The group will have its next meeting on July 1.
Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel. The rebound has pushed up spot premiums for crude in Asia and Europe to multi-month highs.
On Monday, the market reacted positively over a pause in negotiations to revive the Iran nuclear deal after Mr Ebrahim Raisi won the country’s presidential election.
Although he backed talks between Iran and six world powers to revive a 2015 nuclear deal but flatly rejected meeting US President, Mr Joe Biden, even if the country removed all sanctions placed by the Donald Trump administration.
Removal of sanctions on commodities, including crude, could see an extra one million barrel flow into the market as it would be exempted from supply quotas.
Meanwhile, forecasters continue to see a higher oil price amid tighter oil supply and recovering demand which could push oil briefly to $100 per barrel in 2022.
US crude stocks were expected to have dropped for a fifth consecutive week, and this could lift prices.
The Energy Information Administration (EIA) said last week that US crude oil stockpiles dropped sharply in the week to June 11 as refineries boosted operations to their highest since January 2020, signalling a continued improvement in demand.
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Latest News on Business Post
- Profit Takers Drag ASI to 37,847.07 Points, Market Cap to N19.725trn June 23, 2021
- Local Currency Gains N1.67 Against Dollar at I&E June 23, 2021
- Oil Falls as OPEC+ Mulls Raising Supply June 23, 2021
- NASD Unlisted Security Index Extends Loss by 0.93% June 23, 2021
- Ecobank Promotes Employees for Better Efficiency June 22, 2021
- Kwara, Three Others to Receive ASR N10bn Health Intervention Fund June 22, 2021
- ECOWAS Court Restrains Nigeria From Imposing Sanctions On Twitter June 22, 2021
- NGX Delists Four Firms for Poor Corporate Governance June 22, 2021
- CBN’s Digital Currency Will Deepen Financial Inclusion—FDC June 22, 2021
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