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Nigerian millers see more demand for U.S. wheat

21 June 2012, 11:01

 Kansas City - Nigerian flour millers, key buyers of U.S. wheat, continue to need more U.S. supplies despite efforts by the Nigerian government to reduce reliance on foreign wheat imports, top Nigerian milling executives said on Wednesday.

"We are not expecting a drop in the amount of U.S. wheat we need. In all, the wheat we are needing should be increasing," said Benson Osaretin Evbuomwan, director of Honeywell Flour Mills, which has an annual milling capacity of 600,000 tonnes.

Honeywell is a large user of hard red winter wheat, the top U.S. class of wheat.

Evbuomwan is one of seven representatives from the top milling and food companies in Nigeria who are visiting key U.S. wheat growing states this week, including top winter wheat producer Kansas. The team is surveying the current year's hard red winter and hard white wheat crops.

James Ogunyemi, quality control manager at Flour Mills of Nigeria, the country's largest and the world's second-largest miller, also made the trip. He said he was impressed with the quality of the wheat in this year's crop, which is being harvested now.

"What we've seen so far will be suitable," he said.

Ogunyemi estimated that Nigeria's wheat imports will rise to 4.5 million tonnes this year.

For the 2011/12 marketing year, which concluded May 31, Nigeria imported 3.35 million tonnes from the United States, making Nigeria the third-largest wheat buyer, behind Japan and Mexico, according to U.S. Wheat Associates.

Flour Mills of Nigeria does so much business with the United States that it operates its own export elevator in Corpus Christi, Texas, importing soft red winter, hard red winter, hard red spring and Desert Durum wheat.

Flour millers in Nigeria are struggling now with a call by the government to reduce their use of imported flour and make greater use of domestic cassava in bread flour - the government wants up to 40 percent of the flour made with cassava.

To further discourage imports, Nigeria will implement in July a higher duty on imported wheat flour and wheat grain.

Flour millers have widely resisted the change, saying they will have to retrofit their plants and charge more for their bread products.

Evbuomwan said industry leaders were continuing to talk with government leaders about the viability of the plan.

"At 40 percent we're not getting good bread," said Evbuomwan. "We think 40 percent is not realistic. There needs to be more discussion."

Even with substitution of some cassava for wheat, demand for bread and growing demand for higher value products like instant noodles will result in more wheat imports, he said.

"We're going to need more wheat," said Evbuomwan. "Business with the U.S. in terms of wheat, we see it growing, not declining," said Evbuomwan.

The Nigerian representatives met with U.S. wheat players about efforts to develop genetically modified wheat and said they were expecting biotech wheat that could resist disease or yield more by 2020.

Market concerns remain as some consumers are cautious about the safety of genetically modified crops, but with education and communication, a GMO wheat should be accepted by the time it comes to market, said Evbuomwan.

- Reuters

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