Food and beverage companies operating in Nigeria can no longer import grains as a result of their inability to access foreign exchange.
These firms are forced to look inwards, thus making them to scramble for available grains in the market.
This is said to be one of the reasons for the shortage of grains and the high price of the agricultural produce.
Investigation proves that food companies were buying grains in large quantity from local farmers as opposed to what was obtainable in the past when they imported the agricultural produce.
This, according to officials of the Federal Ministry of Agriculture and Rural Development, has made it tough for households to get the commodities at cheaper rates, despite assurances by the Federal Government.
“If we had funds, it would have been very easy to build up our food reserves to meet the high demand from food and beverage companies because we often have bumper harvests,” an official at the ministry.
The source added, “But that is not the case because we don’t have enough grains in the 23 functional reserves across the country.”
In November last year, the Presidency raised the alarm about the massive exportation of grains from Nigeria and how it was affecting the country’s reserves.
It, however, stated that the FMARD had been asked to present a quick plan for the purchase of surplus grains to be stored in warehouses across the country.
The report indicated that the amount of food items stored in the national reserves across the country were extremely low and could not effectively address the rising prices of food in Nigeria.
According to the report, Nigeria’s store houses for food have the capacity to take over one million tonnes of agricultural produce but the reserves currently have only about 8,000 tonnes of food valued at N1.5bn.
Explaining further how the massive purchase of grains by food companies had impacted on the cost and availability of the commodities, another official at the ministry stated that forex scarcity and the various policies of government were also contributory to the food crisis in Nigeria.
The Project Manager, Micro Reforms for Africa, who doubles as the Abuja Liaison Manager for Fertiliser Producers and Suppliers Association of Nigeria, Mr. Gideon Negedu, told our correspondent that the high demand for grains in Nigeria was exerting pressure of food prices.
He, however, stated that food prices would crash soon once the various programmes being put in place by the Federal Government and private investors in the agriculture sector began to materialise.
“We know there are challenges, particularly with respect to food availability and cost, but I can tell you with all confidence that food prices are going to come down tremendously because the cost of production is going to fall seriously,” Negedu said.
The Coordinator, Nigeria Agribusiness Group, Mr. Emmanuel Ijewere, also said that food prices were high due to the pressure being exerted by high demand from both industrial and private consumers.
This, he said, was one key factor that prompted the high cost of agricultural produce, but noted that once the regulatory framework on fertiliser production and other initiatives in the industry began to take shape, food prices would come down.
“There is a new paradigm in Nigeria. We are creating a seamless opportunity for win-win outcomes to private and public sector investments in the agribusiness space. This will not only result in adequate fertiliser, but will make food affordable to many,” he said.