From Okwe Obi, Abuja
A miscalculated bet on the rising cost of beans has turned sour, leaving local speculative traders in a mess as prices of the commodity unexpectedly crashed, wiping out anticipated profits.
The traders’ speculation, which was supposed to be a lucrative storage strategy by stockpiling beans in large quantities at the beginning of the year and hoping to sell later with huge margins, has backfired as the commodity’s price has continued to plummet. They are now scrambling to recoup their losses.
Between January and February, the cost of beans was very high, as a mudu was sold for N3,000 to N3,200. Traders, who had predicted that the cost would continue to spike, bought and stored bags of beans, anticipating a more favourable period.
But what they envisioned has not yielded any positive result as the price of beans has continued to drop drastically.
A current market survey revealed that a mudu of beans in some markets in the Federal Capital Territory (FCT), Abuja, is sold for N1,800 to N2,000 as against the initial price of N3,000.
A storage trader, Amaka Innocent, lamented that she got a loan to buy beans ahead of time. But with the current price, she would find it difficult offsetting her debt.
“Last year, beans were very expensive. People bought beans for N4,000 to N3,500. I had hoped that the price would continue to go up. So, I took a loan from my cooperative, bought and stored. But the current market survey is saying otherwise.
“Wholesalers sell beans for N2,000 and even N1,800. I am at a loss here. How do I repay my loan? It is not funny. I am hoping that the price would go up to enable me get back my money.
“This time, I am not even looking for profit. If I can get the money I collected, I would be very happy,” Innocent said.
Also, a trader at the Garki Modern Market, Peter Chukwudi, shared the pains of Innocent.
Chukwudi said he had thought that there was going to be a scarcity of beans due to how the price was skyrocketing and the high demand. His anticipation has been dashed going by the current reality.“I, also, thought that there was going to be a scarcity of beans this year. I bought five bags from Zuba, and the beans market along Keffi road, in Nasarawa State, hoping to reap bountifully. Only for me to see that the price had dropped.
“Even if I sell at the current price, I will not gain half of what I spent. Yes, you may say the reduction will favour consumers, but it is not in the favour of traders. And with the reduction, farmers will be sceptical about planting beans this year.
“They will not prioritize beans cultivation. With that, the cost of beans will increase maybe next year or the end of the year.”
In addition, a farmer and member of the Small Scale Women Farmers Organisation in Nigeria (SWOFON), Nkechi Nicholas, predicted a reduction in beans farming in the next planting season.
Nicholas said: “Well, farmers will cultivate what will bring in income. There might be a reduction in beans planting this year if the trend continues.
“You are aware that most farmers rent the pieces of land they are farming on. If they are not gaining, it will affect them negatively.
“But I urge farmers not to give up because of the crash in the price of beans. If it does not favour you this season, it would favour you tomorrow. That being said, we still call on the government to help us subsidize the cost of pesticides and other inputs to keep us in farming.
“Insecurity is still on the increase. Farm inputs are expensive. We need to remain in farming.”
Weighing in on the market, President of All Farmers Association (AFAN), Arc Kabir Ibrahim, attributed the reduction to the low purchasing power.
Ibrahim argued that beans were not part of the import waiver by President Bola Tinubu, last year.
According to him, most households cannot afford a mudu of beans, adding that it led to price reduction.
But he said that before August, the prices of beans and other commodities would jump up.
Ibrahim said: “There has been a general trend of all commodities. Both those who have enjoyed small importation and that window of zero tariff and the limited purchasing power of the people.
“Most people are not able to buy foodstuffs. The trend may not continue because around August, prices might go up. Even the importation window did not include beans, even though we have had a deficit of almost 500 metric tonnes that we need to bridge that gap.
“Whatever it is, I think it is a welcome development. The farmers may not be happy, no doubt about it.
“The current price of beans is like eggs. There was a time we had this increment.
Some farmers will have to sell according to the market price, instead of losing everything.
“A lot of things depend on value addition. If we are able to add value to some of these things, they will not perish like that. That is what happened in the developing and developed world.
“But in Nigeria, we do things carelessly. For the beans issue, I do not think we can scientifically give a reason for the reduction, except the market forces are reducing the prices.”