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Local industry analysts have called on the Federal Government to take swift and deliberate action to cushion the effects of the disruptions in the global wheat market on Nigeria’s wheat value chain.
The analysts made the call in a recently published review of the global wheat market following the war between the two top wheat exporting countries – Russia and Ukraine. According to the analysts, the multifaceted value chain crises, including the shortage of foreign exchange, mounting freight charges, and hike in the price of diesel, worsened by the war, continue to take a heavy toll on the wheat value chain.
Flour millers have continued to battle with the rising cost of production and low local wheat production. The rising costs have passed down to bakers as well as raise the hardship and cost of living index of the hard-pressed local consumers who continue to bear the burden of the increase in the prices of wheat derivative foods and household staples.
The experts said the millers and bakers have come under intense cost pressure as the price of the all-important grain continues to skyrocket in the international market and freight charges have spiralled out of control.
The review showed that the price of wheat in the global market shot to $1,000 per bushel in March 2022 from $761.25 in January. On top of that, the millers are expected to spend more on shipping the commodity from the exporting countries as their combined freight bill prediction jumped from N21.6 trillion in 2019 to N28.8 trillion in 2021.
According to the report, “the demand for the wheat-based products, being fairly price-elastic, implies that the burden of every new rise in costs is primarily absorbed by the millers and bakers. The upward trend in the global wheat and freight costs continue to frustrate the millers who have for long borne the cost burden to keep the retail price stable and avoid passing on the costs to the poor consumers.
