Grains are a staple in most African diets and a popular import in the form of rice, corn (maize), and wheat flour. Despite the fact that many African nations grow and export wheat flour, the top wheat importing countries in Africa continue to import wheat flour from the United States, Europe, and other areas of the world. Concerns with wheat produced in Africa, include volume, and pest control issues at all stages of farming, including storage. As a perishable and edible product, storage and preservation of imported wheat flour are particularly important factors to consider. However, most African farmers lack the support, training, and infrastructure to implement these necessary protections for the wheat crop.
Despite being a perishable food item, wheat flour has a long, stable shelf life, which makes it a popular item for consumers. For this reason, it’s no surprise that wheat is one of the top three grains imported into Africa each year. Although the African climate is suitable for growing wheat and organizations like the East African Grain Council (EAGC) promote the sale and import of wheat to other African countries, most African nations still rely heavily on imports from other regions of the world for their primary food supply.
Wheat Flour Data and Price
According to World Grain, wheat production around the world is expected to be slightly less than previous years, at just over 740 million tonnes. The number reflects the slight decrease in wheat production in Europe, which was boosted by the .2 million ton increase in US grain production. The US grain market is strong with prices of the African-imported Hard Red Winter wheat up $9 per ton. Though Russia has cut into America’s strong market share in Africa in recent years, poor weather conditions, specifically dry weather, have led to a decrease in production. The dry weather conditions are also affecting the crop in other European countries, including Germany and Poland.
Nigeria Imports the Most Flour from Abroad
In summer 2018, US Wheat Associates, the United States organization governing the trade and export of American-grown wheat, summarized a visit between United States farmers and African millers from Nigeria, South Africa, and other African nations. The report noted that Hard Red Winter (HRW) is the standard type of wheat in most African countries, and it’s used to make both flour and instant noodles. US Wheat revealed that Nigeria is a primary consumer of US Wheat purchasing approximately 1.18 million tonnes in the 2016/2017. The wheat is purchased by Nigerian milling companies and processed in Nigeria for sale. The USDA reports that the Sub Saharan region of Africa spent an astounding $6 Billion USD on imported wheat in 2011.
The US has invested significant resources into the Nigerian market through training. In June 2018, executives from leading Nigerian flour mills attended training sessions in Kansas and Texas with US farmers. Though the US market share was 90% in 2011, it dropped to just more than a third of that (35%) by 2017. Russia has gained significant market share in the region. To maintain cost and quality, Nigerian flour mills typically mix imported grain from America with cheaper, lower-quality grain from Russia. In addition to Nigeria, US Wheat has also tapped into the South African market. After a five year drought, South African millers imported US wheat in that same year.
It may seem surprising that Africa, which has the climate to produce a wealth of crops, including grains, imports the majority of wheat from abroad. One reason seemed to be quality and price. While particular about the quality of wheat, the benefit of exported wheat is that is readily available at a very affordable price. In Nigeria, exports quote the local production at 60,000 tonnes, which is far less than the 5.4 million tonnes that Nigeria is expected to import this year, according to the US Department of Agriculture (USDA).
The Wheat Import Industry Supports the Local Economy
In 2014, Nigeria suffered a debilitating recession due to the price drop in crude oil, Nigeria’s primary export. Prior to the recession, surplus from the oil trade was an important source of funding to build and maintain local infrastructure, including roads and ports. In the wake of the recession, Nigerian leaders returned to agriculture trade, in the hope that reviving the trade would generate much-needed revenue to revive the economy.
The wheat industry in Nigeria has netted significant profit, which leading flour mills in Nigeria have used to rebuild infrastructure in the country. A key problem facing Nigerian trade is the condition of roads, particularly those in Lagos, near ports and on the local trade route. After reporting record profits despite the Nigerian recession, Dangote Flour Mills and Flour Mills of Nigeria worked with the Nigerian Port Authority (NPA) to reconstruct Wharf Road at the Apapa port in Lagos. Construction of the $12 million USD project was carried out by Dangote Flour Mill’s construction team.
Wheat Price Increase in 2017
Due to poor weather conditions in Europe, wheat prices steadily increased over the summer and spiked in August. The US market saw an increase in prices of $9 and $7 per ton for Hard Red Wheat and Soft Red Wheat, respectively which brings the total price per ton to $254 and $230 per ton respectively. In comparison, French prices remained around $207 in July, while prices for Russian grain hover around $211. After spiking in September, US wheat prices dropped in September 2018.
Current Wheat Prices
As of September, current US wheat prices were listed as $5.27 per bushel (about $193 per ton), 1 ton equals approximately 36 bushels). Wheat bushel prices did increase as was expected due to dry weather conditions, but steadily dropped in September. Though US wheat prices are considered expensive in Nigeria, and more costly than their Russian counterparts, on a world’s scale average prices per ton were the most affordable compared to other top wheat exporters. Canada had the highest average wheat price at $260 per ton, and Argentina was $25 more per ton than the US, at $198 per ton. Data for 2018-2019 shows Australia on track to claim the highest wheat price per ton.
Wheat Flour Importing Countries
Wheat flour is consumed all over the world and can be found in Asia, the Middle East, North America, Europe, and Africa. The bulk of wheat flour is imported to Asia and the Middle East to countries including Afghanistan (the world’s top importer of wheat), Iraq, Uzbekistan, Hong Kong, and Syria rounding out the list of the top flour importing countries in the world. Less popular wheat importing countries that import more than 1% of the wheat available in the world include Saudi Arabia, China, France, Ireland, and Mexico.
Top Wheat Importing Countries
According to the Observatory of Economic Complexity’s 2016 data, the five largest wheat importing countries are Afghanistan, Iraq, the Netherlands, the United States, and Sudan. In 2018, top wheat importers include Indonesia, Egypt, Algeria, Italy, and Japan, with Nigeria coming in at six. The five largest wheat importing countries in Sub Saharan Africa are Nigeria, Sudan, Kenya, South Africa, and Ethiopia. Despite not making the list of top importers in Africa, wheat is the top import of Eritrea.
5 Largest Grain Importing Countries
Wheat is just one of many types of grains throughout the world. In addition to wheat, The East African Grain Council cites maize and rice as other important grain products in the region. Other popular grain imports include oats, sorghum, malt extract, barley, buckwheat, and rye. Top importers of grain products vary according to the type of product. According to World Atlas, the top importers of wheat products in 2015/2016 were Egypt, Indonesia, Algeria, Turkey, and the European Union, which consists of Spain, Italy, Germany, France, the Netherlands and other European countries.
Top Wheat Exporting Countries
Top wheat exporting countries include Argentina, Australia, Canada, France, Russia and the United States. Of the exporting countries, Canada has the highest prices, and Russia the lowest. United States prices, though not as inexpensive as Russia, are typically on the lower end of the pricing spectrum compared to the other wheat exporting countries. Nigeria, and other top African exporters focus on importing wheat from the United States and Russia. As stated above, processing mills mix the higher quality US wheat with lower quality Russian wheat to stretch the value without compromising the finished product. In recent years, South Africa, also among the largest wheat importers in Africa, has shifted their focus to producing and consuming their own wheat.
Wheat Import in East Africa
Some of the top wheat importing countries, including Sudan, Somalia, and Angola are located in East Africa. Despite the fact that there is heavy grain production in the region, these countries continue to import grain outside of the region. In a February presentation at the GAFTA conference, the East African Grain Council (EAGC) outlined this challenge to the local grain market, and how the EAGC works to increase local sales of grain products among African countries. Indeed, some of the economic strain in the region could be alleviated by working to import grain from other African countries, rather than relying on grain from abroad.
Factors affecting the import of wheat from top grain producers in East Africa to high importing grain countries in Africa include structural challenges, informal trade, and trade subsidies. Many of the farms are dominated by small, local farmers and there is much variation and little standardization between farms. As a result, informal, unregulated trade of products between entities is quite common, ultimately reducing the revenue and income potential for farmers in the region. One of the largest structures that prevent grain import from Africa is trade subsidies for large foreign exporters, such as those in Asia or the EU.
Foreign trade isn’t completely without benefit for the African nations. The US market, which holds 35% market share of wheat imports in Nigeria, has provided training opportunities for Nigerian millers to increase the productivity of their crop. In fact, these hands-on training, lecturing, and networking opportunities may be one of the reasons that Africa imports flour abroad, rather than neighboring countries, which sometimes lack the infrastructure to store and transport the product.
Resources for Individuals Interest in Imported Wheat
The International Grain Trade Coalition (IGTC) maintains a list of organizations that monitor the trade of grains throughout the world. Joining a coalition, association, or organization in your trade sector is useful if you plan to enter the trade. It’s an additional place to gain trusted allies and business partners, as well as stay up-to-date on developments in the field of grain production and imported wheat. The following are a few organizations in Africa and abroad the represent the interests of the grain trade:
Associations in Africa
- Eastern African Grain Council (EAGC) – http://eagc.org
- South African Cereals and Oilseeds Trade Association (SACOTA) – https://sacota.co.za
- Grain and Feed Trade Association – https://www.gafta.com
Joining a professional association is not a substitute for joining a trading platform to sell your goods. Rather, it’s a place to learn more information and educate your team about the industry. Most associations hold annual conferences and produce quarterly and annual reports that contain valuable information about pricing and the state of the trading economy in the world.
The Market to Import Wheat Flour in Africa
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