Written by Kazeem Adedoyin
It is known that the Global market price of 1Metric Ton of CRUDE OIL is around $586.
The Global market price of 1 Metric Ton of PALM OIL is around $3,550, Global market price of 1 Metric Ton of COCOA is around $2,181 And Global market price of 1 Metric Ton of Cassava Chips is configured at $1,300.
Note: I tried to use same Unit of measurements (i.e MT) and currency ($) to bring these four commodities into similar comparative perspective. All necessary conversions have been factored in, though may not be 100% accurate.
While countries like Ghana and Malaysia are doing very well; earning lots of forex to grow their local economy from Cocoa and Palm oil respectively, it is so sad that Nigeria that used to be a strong player on these two commodities is completely missing out of these global fortunes. And with the Cassava, where Nigeria is the number one global producer, we are also unfortunately not doing up to our expectations in its global trading.
Cassava is currently traded across the world largely in form of chips, starch including flour. Among these three derivatives, Cassava chips has the largest volume of trade, with China being the major buyer. China alone is responsible for the importation of close to 65% of Cassava chips traded globally.
China consumed a lot of Cassava chips annually mostly for as industrial feed for ethanol, biofuel and animal feed manufacturing. More than 75% of China's annual demand of Cassava chips is largely serviced between Thailand, Vietnam and few other Asia countries. While it is understandable that the choice of larger supply from neighbouring Asia countries could be as a result of close trade ties and proximity, it is quite a reason for concern that name of Nigeria does not appear among the five largest exporters of Cassava chips globally despite being the largest producer of Cassava tuber in the whole world. The little breakthrough that Nigeria has made in this International trade is mostly towards Europe, especially to countries like Netherland, Germany and Belgium. Though, Nigeria has been exporting Cassava chips to China also, the volume traded is not at all commensurate with the heavy demand of the country.
More reason to worry now is the fact that China is even turning its search for Cassava chips in Africa towards countries like Kenya. According to Ali Olieva who is the Engagement Manager with TRIDGE (a global sourcing hub of food and agricultural products), 'China has increased its demand for dried Cassava from Kenya. The requirements for the Cassava chips are a starch content of over 65% and moisture, fibre and silica levels under 14%, 5% and 3% respectively. The demand has led to increase in Cassava farming in the Western, Central and Coastal regions of Kenya. Kenya production volume in 2021 was 900,000 Metric tons.
Nigeria is the largest producer of Cassava tuber in the world. China is the largest importer of Cassava chips in the world. Nigeria has a very strong relationship with China; with Nigeria being mostly at the receiving end. I do not see any reason why Nigeria should not benefit more from exporting Cassava chips to China than any other African countries. I will not over-flog this trade imbalance as the fault of China though. I strongly believe that China will definitely trade with Nigeria on this very commodity if we only we are ready and decisive in doing what is right and follow it through. The Chinese Ambassador to Nigeria Cui Tianchun recently remarked during the Nigeria - China Cultural Week that Nigeria has continue to be the China's number one Trading partner in Africa and urged that Nigeria should produce more commodities to be exported to China to ensure balance of trade.
Cassava chips is one key commodity in which Nigeria has a lot of edge to balance trade with China to a large extent. And I strongly believe that if we follow through with the right policy, standardization and concerted export supports, this will largely make a difference on our economy and also directly touches the lives of Nigeria Cassava growers in a positive way. Mr. Obiora Madu who is the DG of African Centre for Supply Chain recently said that Chinese Importers are pricing Nigeria Cassava chips cheaply because of its low grade. The Chinese are offering Nigerian exporters $250 per ton instead of $400 it goes for in Europe and $350 in Israel. At this price, the business would not be viable considering the cost of logistics and production.
A friend recently shared an order from a Canadian Exporter (to China) with me. A full year order of 250,000 tons of Cassava chips every month. That is an average of 1,000 40ft container on a monthly basis.The quality conditions are 67% starch content (minimum), 14% moisture content (maximum), 5% fibre content. No mold, no termites and insects. The order is quite big indeed and the conditions are not unsurmountable. But, this is only if we have a well organized system on ground that will cater for this order. Unfortunately, no. That is why we would not blame China if they are turning their attention towards places like Kenya and Ghana.
The first question we need to ask ourselves is if we have the capacity to meet such order and the attached conditions. Presently, I will say no. The reason being that our Cassava chips Production at the moment, which is largely operated at manual farm place levels is not yet deliberately targeted at export markets. In terms of volume, our production is not even enough to satisfy our local Industries demand. The annual local demand for Cassava chips in Nigeria is around 1,500,000 tons. The deficit is mostly serviced through the usage of raw tubers. This supply limitation is simply because Cassava chips production in Nigeria is yet to attract enough attention of Commercial Processors who uses modern machines that guarantee maximum outputs, efficiency and quality production. Nigeria indeed grow lot of Cassava but efforts to grow Cassava varieties that will yield Cassava Chips with high starch is still at the minimal. International exporters price Cassava chips base on starch content, dryness and neatness. You can as well imagine the level of infestations and contamination of our own Cassava Chips that is mostly dried on rocks and bare floors. Again, Cassava chips that is not properly dried is prone to mould infections during storage, which will eventually causes poor grading.
Cassava chips market is a very huge both locally and abroad. The business outlook is very attractive and so promising to improve the economy of Nigeria. Direct Investment of large Commercial operators with the right machines and good Production environment will enable production of larger quantity of high quality/well graded Cassava chips. This is a business that should get good attention of the government and organized Investors.
Our government need build on our close relationship with China to drive our Cassava Economy. We need to decisively look at policies that would particularly drive our Cassava value Chain relationship with China. Efforts should be made to facilitate supply of high efficient drying machines that would guarantee optimum quality outputs at minimal operational costs from China. Our international trade department should pursue brokering deals with Chinese counterparts to secure large orders that will guarantee steady and continous operations in established Cassava chips factories. Efforts should be made by the government to give export waivers and subsidy where necessary to easy and encourage exports of Cassava derivatives to Asia and Europe. Imagine if Nigeria is able to produce Cassava chips in excess capacity and shipped in large quantity to China and Europe on a yearly basis. You can imagine its impact on the economy. You can imagine its impacts on Investors in this business. You can imagine the ripple effects on the livelihood of our rural farmers.
The global market price of Cassava chips is far more than that of crude oil. We produce more than enough Cassava tubers annually which is largely under-utilized Industrially and we even have the capacity to double or triple this annual Cassav Production.
Cassava Economy; if well organized, focused and supported will definitely revamp our economy. We just have to leverage our international trade Competitive edge.
