Nigeria’s soybeans price surges as Saudi Arabia demands million tonnes
Saudi Arabia’s recent expression of interest in importing one million tonnes of soybeans annually from Nigeria has significantly impacted the local soybean market.
This development is part of Nigeria’s strategy to diversify its economy, which has been heavily reliant on oil and gas exports.
The Nigerian Minister of Agriculture and Food Security, Abubakar Kyari, announced this potential trade partnership as a means to earn foreign exchange amidst severe dollar shortages that have adversely affected the country’s economy.
Demand and scarcity
The announcement from Saudi Arabia has led to a surge in demand for soybeans within Nigeria.
Prior to this interest, the country was already experiencing an increase in soybean production; however, domestic demand was outpacing supply due to various factors.
The USDA reported a significant rise in soybean production over the past four years, but challenges such as security issues in northern states have hindered further growth.
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These security challenges include conflicts between farmers and pastoralists, which have disrupted agricultural activities.
As traders and merchants reacted to the news of Saudi Arabia’s interest, there was a “mad rush” for soybeans in Nigeria.
This rush has created intense competition among buyers, driving prices up dramatically. For instance, the price of a 100kg bag of soybeans rose from N40,000 last year to over N100,000 currently. Such price hikes indicate not only increased demand but also limited availability of the commodity.
Impact
The rising cost and scarcity of soybeans have had ripple effects across various sectors that rely on this oilseed. Poultry farmers are particularly affected as soybean meal is a key ingredient in poultry feed rations. With soaring prices, many farmers are forced to seek lower-quality substitutes like peanut cake or palm kernel meal, which may not provide the same nutritional benefits for livestock.
Moreover, manufacturers of infant food products that utilize soybeans for their high nutritional value are also feeling the strain. The increased costs associated with soybeans affect their production capabilities and ultimately lead to higher prices for consumers.
Households that depend on soybeans as an affordable source of protein are similarly impacted by these price increases. Historically promoted by organizations like the International Institute of Tropical Agriculture (IITA) for its nutritional benefits, soybeans have become integral to many diets in Nigeria.
Given these developments, stakeholders within Nigeria’s agricultural sector are calling for research into new soybean varieties that can be cultivated during dry seasons to help meet growing demand.
The current situation regarding Saudi Arabia’s interest underscores the need for strategic planning and investment in agricultural infrastructure to ensure that domestic production can keep pace with both local consumption and international export opportunities.
