The Chairman, and Chief Executive of Dangote Group, Aliko Dangote, has said Nigeria should expect an outbreak of food scarcity in the next three months as adverse consequences of the Russian-Ukraine war begin to come home to roost.
The war impact which has begun with the sporadic rise in wheat pricing may soon spread to other foods including maize and other components of input for industrial food production, triggering low production and low supply, the business mogul said.
With Russia and Ukraine controlling about 30 percent of the world’s urea production and 26 percent of the world’s potassium supply, access to these input components will increasingly stifle for as long as the war persists and could cripple the goal to fortify staples from source.
“Not only wheat or maize will be affected but a lot of components because as we speak, potash and urea supply are held largely by Russia and Ukraine. There will be a scarcity of food because people will not be able to access fertilisers going forward. But we may not see the effects now but in the next two to three months, it will reflect,” Dangote said, speaking at the 4th annual food processing and nutrition leadership forum in Lagos.
“We need to sit with the government to look at what to do. We need to make sure we grow more. It is about food security,” Dangote said.
In Africa’s biggest oil-producing country, flour millers believe a shortage of wheat supplies from Russia would affect the price of products like bread, a common food in Africa’s most populous country.
The ripple effect will be faced by Nigerian firms operating in the food industry that are currently facing an uptick in production costs from exchange range volatility and supply chain disruptions.
Data gleaned from the National Bureau of Statistics (NBS) showed wheat is Nigeria’s third most consumed grain.
For instance, Nigeria imported N898.2 billion worth of wheat in nine months that ended September 2021.
The top origins of wheat in Nigeria in 2021 included the USA, N194.2 billion; Canada, N136.4 billion, Russia, N124 billion, Lithuania, N122.3 billion and Latvia, N115.9 billion.
The ripple effect will be faced by Nigerian firms operating in the food industry that are currently facing an uptick in production costs from exchange range volatility amid Covid-19 induced supply chain disruptions.
In the last twelve months, wheat-based products such as the popular pre-packed wheat flour and bread (sliced and unsliced) have witnessed a steady price increase across the country.
In January 2022, a 500g sliced bread was sold for N418.65, representing a 28 percent increase on a year-on-year basis. The 500g unsliced bread rose by 25 percent from N306.74 in January 2021 to N383.51 in January 2022, NBS data stated.
According to Boye Olusanya, chief executive officer, Honeywell Flour Mills, the reality is that Russia and Ukraine are first and fifth in wheat and if that volume which is almost one-third of the total wheat production in the world is taken out, there will be an immediate impact on pricing.
As of today, prices of wheat have gone down, he said, noting there is a lag in the system because of inventory control and inventory management.
Also, he explained that the impact of the war will not only reflect in the short term but could snowball lasting effect on production over a year to 18 months.
“It is something that we need to be sitting with the government to make discourse about what measures can we put in place to alleviate what is coming. If we don’t manage this well, there will be significant volume compression in terms of input materials that come in and then for the volume of food that is sold and if we realise how much we are a source of fortification, then there is a huge impact on health,” he said.
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