Required Report - public distribution

**Date:** 4/16/2004

**GAIN Report Number:** NI4006

NI4006

**Nigeria**

**Grain and Feed**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Jamie Rothschild

U.S. Embassy, Lagos

**Prepared by:**

Ali Michael David

**Report Highlights:**

Despite a tripling of ocean freight rates, U.S. wheat exports to Nigeria
in MY2003/04 grew 20 percent over a year earlier. The increase in U.S.
wheat exports to Nigeria is fueled by increased consumption of bread,
pasta and biscuits. A recent study conducted by FAS Lagos revealed that
Nigeria\'s rice imports includes virtually all parboiled rice shipped to
Cotonou. Benin Republic is a market for regular milled white rice.
Prices of corn are up to \$250/MT, forcing feed manufacturers to switch
to sorghum and millet.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Lagos \[NI1\]

\[NI\]

Table of Contents

[Executive Summary 3](#executive-summary)

[WHEAT 4](#wheat)

[Production 4](#production)

[Consumption 4](#consumption)

[Trade 5](#trade)

[Policy 5](#policy)

[SORGHUM 6](#sorghum)

[Production 6](#production-1)

[Consumption 6](#consumption-1)

[Trade 6](#trade-1)

[Rice 7](#rice)

[Production 7](#production-2)

[Consumption 7](#consumption-2)

[Trade 8](#trade-2)

[Marketing 8](#marketing)

[MAIZE 9](#maize)

[Production 9](#production-3)

[Consumption 9](#consumption-3)

[Trade 9](#trade-3)

[Marketing 10](#marketing-1)

# Executive Summary

Exports of U.S. wheat to Nigeria in MY2003/04 are estimated at 2.2
million tons, up from 1.9 MMT and 1.7 MMT in MY2002 and MY2003
respectively. U.S. wheat exports to Nigeria in MY2004/05 are forecast at
2.3 MMT. The growing importance of Nigeria as a destination for U.S.
wheat is striking, with Nigeria maintaining its position as the leading
export destination for U.S. hard red winter wheat and the fourth overall
largest export market for U.S. wheat in MY2003/04. Available trade
figures indicate that U.S. wheat accounts for more than 90 percent of
Nigeria's total wheat imports in MY2003/04. The rise in imports is
fueled by rising consumption of bread, which is now a major staple among
Nigerian consumers.

Nigeria's domestic grain production in MY2004/05 is forecast to increase
five percent. The forecast is based on the timely arrival of rains in
the grain belt. Nigeria could have achieved a bumper grains crop in
MY2003/04, if not for shortages of organic fertilizer and flooding of
some rice and cornfields. The decision of the GON to apply the 25
percent subsidy on fertilizers, created scarcity conditions and resulted
in higher product prices to growers. The retail price of a 50-kilogram
bag of NPK increased to a record level of 4,000 Naira, up from an
average of 2,000 Naira a year earlier. Utilization of fertilizer
products is limited by its high cost, often resulting in low crop yield
levels, especially for fertilizer-dependent crops such as corn and rice.

President Obasanjo is promoting increased food production in the country
through a new initiative called the "National Special Program for Food
Security." The program focuses on innovative approaches to soil
conservation and fertility improvement and water use for crop
production, crop intensification and diversification to attain food
security and alleviate poverty. The program aims at improving farmers'
productivity and income. Field visits to northern grain production zones
revealed that farmers are responding favorable to the new initiative.

Exchange Rate: US\$1 = 135 Naira

# WHEAT

+-------------+-------+-------+-------+-------+-------+-------+-------+
| Nigeria     |       |       |       |       |       |       |       |
|             |       |       |       |       |       |       |       |
| Wheat       |       |       |       |       |       |       |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+
|             | 2002  | Re    | 2003  | Est   | 2004  | For   | UOM   |
|             |       | vised |       | imate |       | ecast |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+
|             | USDA  | Post  | USDA  | Post  | USDA  | Post  |       |
|             | Off   | Est   | Off   | Est   | Off   | Est   |       |
|             | icial | imate | icial | imate | icial | imate |       |
|             | \[    | \[    | \[    | \[    | \[    | \[    |       |
|             | Old\] | New\] | Old\] | New\] | Old\] | New\] |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Market Year |       | 07    |       | 07    |       | 07    | MM    |
| Begin       |       | /2002 |       | /2003 |       | /2004 | /YYYY |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Area        | 35    | 35    | 35    | 35    | 0     | 0     | (1000 |
| Harvested   |       |       |       |       |       |       | HA)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Beginning   | 200   | 200   | 200   | 200   | 200   | 200   | (1000 |
| Stocks      |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Production  | 50    | 50    | 55    | 55    | 0     | 55    | (1000 |
|             |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt.  | 2304  | 2304  | 2300  | 2400  | 0     | 2500  | (1000 |
| Yr. Imports |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Jul-Jun     | 2304  | 2304  | 2300  | 2400  | 0     | 2500  | (1000 |
| Imports     |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Jul-Jun     | 1688  | 1688  | 0     | 2200  | 0     | 2300  | (1000 |
| Import U.S. |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL       | 2554  | 2554  | 2555  | 2655  | 200   | 2755  | (1000 |
| SUPPLY      |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt.  | 0     | 0     | 0     | 0     | 0     | 0     | (1000 |
| Yr. Exports |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Jul-Jun     | 0     | 0     | 0     | 0     | 0     | 0     | (1000 |
| Exports     |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Feed Dom.   | 0     | 10    | 0     | 0     | 0     | 0     | (1000 |
| Consumption |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.  | 2354  | 2354  | 2355  | 2455  | 0     | 2555  | (1000 |
| Consumption |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Ending      | 200   | 200   | 200   | 200   | 0     | 200   | (1000 |
| Stocks      |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL       | 2554  | 2554  | 2555  | 2655  | 0     | 2755  | (1000 |
| D           |       |       |       |       |       |       | MT)   |
| ISTRIBUTION |       |       |       |       |       |       |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+

# 

# Production

Nigeria's wheat production in 2004/04 is forecast to remain at about
60,000 tons, same as 2003/04. Wheat production is not expected to expand
beyond this level due to local climatic conditions, which are not
suitable for wheat.

# 

# Consumption

Following a sustained increase in export ocean freight rates in recent
months, Nigerian flour millers, through a joint action increased the
retail price of flour to 2,850 Naira per bag of 50 kilograms in January
2004, up approximately 20 percent from the previous level. Freight rates
from U.S. gulf to Nigeria are running \$70-75 a ton compared to an
average of \$26 over the past five years. Wheat millers in the country
indicate that the sharp increase in freight rates could no longer be
absorbed in their cost structure. In response, the bakers have increased
the price of bread on average by 10 percent. By this increase, a
950-gram loaf of bread is now sold for 150 Naira, up from 120 Naira
previously. Bakers in the country indicate that they are unable to pass
on the full impact of the flour price increase to cash-trapped Nigerian
consumers due to stiff consumer resistance. Despite the increase in
price, bread consumption is expected to continue to increase because of
the high cost of local substitutes. Bread has firmly established itself
as a staple item in the Nigerian breakfast and is eaten throughout the
day as the convenience food of choice by the general public. Demand for
soft wheat is increasing to satisfy a growing demand by biscuits,
crackers, and pasta manufacturers. Total production capacity in the
industry is estimated at about 4.0 MMT. Following the entrance of
aggressive new millers in recent years, the industry has become
competitive with respect to price and quality. A number of the mills now
have their own in-house bakeries to provide market support for their
products.

# Trade

Nigeria's overall wheat import volume in MY2004/05 is forecast at a
record 2.6 million tons, with imports from the U.S. reaching 2.3 million
tons. Overall, Nigeria's wheat imports in MY2003/04 are estimated at 2.4
MMT, with the U.S. supplying 2.2 MMT. The higher volume projected for
2004/05 is based upon the rapid growth in Nigeria's population and
improving economic conditions in the country.

Nigeria's rapid population growth combined with the recent reduction in
import duty suggests that annual wheat imports from the U.S. are likely
to exceed three million tons within the next 5 years. This trade
projection is supported by the GON's inability to date to revitalize its
moribund agricultural sector. With domestic food production lagging
behind, the country must ultimately turn to imports to meet its food
security.

In MY2003/04, Nigeria is the fourth largest overseas market for U.S.
wheat, down from the third position last year. Nigeria's loss of
position is due solely to robust growth in Egyptian wheat imports from
the US wheat during the year. In reality, US exports to Nigeria expanded
in both volume and market share. U.S. wheat exports to Nigeria in
2003/04 increased by more than 20 percent, while market share increased
from 85 percent to more than 90 percent over a year earlier. Canada and
Argentina are the principal competitors in this market. Millers who
experimented with Kazakhstan wheat have vowed not to try again because
of quality related problems.

# Policy

Nigeria's wheat import tariff is five percent. Imported wheat also is
subject to port surcharges (equal to seven percent of the duty value),
and the GON's Combined Import Supervision Scheme fee, which is equal to
one percent of FOB value. The GON's five percent value added tax, also
is applicable to wheat flour. Millers are required to fortify flour with
vitamin A.

# SORGHUM

+--------------------+------+------+------+------+------+------+------+
| Nigeria            |      |      |      |      |      |      |      |
|                    |      |      |      |      |      |      |      |
| Sorghum            |      |      |      |      |      |      |      |
+--------------------+------+------+------+------+------+------+------+
|                    | 2002 | Rev  | 2003 | Esti | 2004 | Fore | UOM  |
|                    |      | ised |      | mate |      | cast |      |
+--------------------+------+------+------+------+------+------+------+
|                    | USDA | Post | USDA | Post | USDA | Post |      |
|                    | Offi | Esti | Offi | Esti | Offi | Esti |      |
|                    | cial | mate | cial | mate | cial | mate |      |
|                    | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |      |
|                    | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |      |
+--------------------+------+------+------+------+------+------+------+
| Market Year Begin  |      | 10/  |      | 10/  |      | 10/  | MM/  |
|                    |      | 2002 |      | 2003 |      | 2004 | YYYY |
+--------------------+------+------+------+------+------+------+------+
| Area Harvested     | 6750 | 6770 | 6800 | 6800 | 0    | 6800 | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | HA)  |
+--------------------+------+------+------+------+------+------+------+
| Beginning Stocks   | 200  | 200  | 200  | 200  | 200  | 200  | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| Production         | 7850 | 7850 | 8000 | 8000 | 0    | 8050 | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| TOTAL Mkt. Yr.     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Imports            |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| Oct-Sep Imports    | 0    | 0    | 0    | 0    | 0    | 0    | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| Oct-Sep Import     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.               |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| TOTAL SUPPLY       | 8050 | 8050 | 8200 | 8200 | 200  | 8250 | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| TOTAL Mkt. Yr.     | 50   | 50   | 50   | 50   | 0    | 50   | (    |
| Exports            |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| Oct-Sep Exports    | 50   | 50   | 50   | 50   | 0    | 50   | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| Feed Dom.          | 125  | 130  | 150  | 150  | 0    | 150  | (    |
| Consumption        |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| TOTAL Dom.         | 7800 | 7800 | 7950 | 7950 | 0    | 8000 | (    |
| Consumption        |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| Ending Stocks      | 200  | 200  | 200  | 200  | 0    | 200  | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+
| TOTAL DISTRIBUTION | 8050 | 8050 | 8200 | 8200 | 0    | 8250 | (    |
|                    |      |      |      |      |      |      | 1000 |
|                    |      |      |      |      |      |      | MT)  |
+--------------------+------+------+------+------+------+------+------+

# Production 

Sorghum production in 2004/05 is forecast at 8.01 million tons. The
projected increase in output is based largely on anticipated improvement
in crop yield, thanks to the growing acceptance by growers of improved
varieties developed by local research institutes. Sorghum is Nigeria's
most widely cultivated grain, accounting for more than 45 percent of
total planted area. Sorghum production is attractive to farmers because
of favorable market prices and its relatively low fertilizer usage
requirements. Sorghum cultivation spans the North to the Middle-belt
zones of the country where precipitation and soil moisture levels are
low. The early maturing varieties are very suitable to the semi-arid
conditions in the extreme northern parts of Nigeria with very short
rainy season. Production conditions in 2003 were generally normal.

# Consumption

Sorghum enjoys a large and growing domestic demand because of its
extensive use as food in virtually all parts of northern Nigeria.
Sorghum also is used extensively in brewing homemade local beer.
Industrial demand for sorghum by beer and feed manufacturers is rising
steadily, in step with growth trends in these sectors. Some brewing
factories in Nigeria produce beer exclusively from corn and sorghum.

# Trade

Nigeria is nearly self-sufficient in sorghum. There are no official
statistics on exports, but drought conditions to the north of Nigeria
encouraged undocumented, cross-border exports of about 50,000 tons into
Niger and Chad in MY2003/04.

# Rice

+---------------+------+------+------+------+------+------+-------+
| Nigeria       |      |      |      |      |      |      |       |
|               |      |      |      |      |      |      |       |
| ######        |      |      |      |      |      |      |       |
|  Rice, Milled |      |      |      |      |      |      |       |
+---------------+------+------+------+------+------+------+-------+
|               | 2002 | Rev  | 2003 | Esti | 2004 | Fore | UOM   |
|               |      | ised |      | mate |      | cast |       |
+---------------+------+------+------+------+------+------+-------+
|               | USDA | Post | USDA | Post | USDA | Post |       |
|               | Offi | Esti | Offi | Esti | Offi | Esti |       |
|               | cial | mate | cial | mate | cial | mate |       |
|               | \[O  | \[N  | \[O  | \[N  | \[O  | \[N  |       |
|               | ld\] | ew\] | ld\] | ew\] | ld\] | ew\] |       |
+---------------+------+------+------+------+------+------+-------+
| Market Year   |      | 01/  |      | 01/  |      | 01/  | MM    |
| Begin         |      | 2002 |      | 2003 |      | 2004 | /YYYY |
+---------------+------+------+------+------+------+------+-------+
| Area          | 1660 | 1660 | 1800 | 1800 | 0    | 1850 | (1000 |
| Harvested     |      |      |      |      |      |      | HA)   |
+---------------+------+------+------+------+------+------+-------+
| Beginning     | 680  | 680  | 777  | 777  | 575  | 575  | (1000 |
| Stocks        |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| Milled        | 2200 | 2200 | 2200 | 2200 | 0    | 2300 | (1000 |
| Production    |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| Rough         | 3667 | 3667 | 3667 | 3667 | 0    | 3833 | (1000 |
| Production    |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| MILLING RATE  | 6000 | 6000 | 6000 | 6000 | 0    | 6000 | (1000 |
| (.9999)       |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| TOTAL Imports | 1897 | 1897 | 1600 | 1600 | 0    | 1700 | (1000 |
|               |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| Jan-Dec       | 1600 | 1600 | 1750 | 1750 | 0    | 1800 | (1000 |
| Imports       |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| Jan-Dec       | 0    | 5    | 0    | 12   | 0    | 0    | (1000 |
| Import U.S.   |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| TOTAL SUPPLY  | 4777 | 4777 | 4577 | 4577 | 575  | 4575 | (1000 |
|               |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| TOTAL Exports | 0    | 0    | 0    | 0    | 0    | 0    | (1000 |
|               |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| Jan-Dec       | 0    | 0    | 0    | 0    | 0    | 0    | (1000 |
| Exports       |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| TOTAL Dom.    | 4000 | 4000 | 4002 | 4002 | 0    | 4025 | (1000 |
| Consumption   |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| Ending Stocks | 777  | 777  | 575  | 575  | 0    | 550  | (1000 |
|               |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+
| TOTAL         | 4777 | 4777 | 4577 | 4577 | 0    | 4575 | (1000 |
| DISTRIBUTION  |      |      |      |      |      |      | MT)   |
+---------------+------+------+------+------+------+------+-------+

# Production

Nigeria's rice production in MY2004/05 is forecast at 2.3 MMT, up from
2.2 MMT in MY2003/04. The projected increase is based on a combination
of improved input supply and favorable weather outlook. President
Obasanjo has a new special initiative to promote self-sufficiency in
rice production. A key element of the initiative is the GON's subsidy on
basic farm inputs, especially improved rice varieties. The government is
promoting the adoption of the new hybrid rice varieties to help boost
rice production. These new varieties are high yielding, early maturing,
disease resistant, and high in protein content. Despite this initiative,
however, Nigeria will continue to depend on imports to satisfy a growing
consumer demand.

# Consumption 

Rice imports account for close to half of Nigeria's total rice supplies.
Imported parboiled rice is directed at meeting consumer demand in urban
areas where incomes are highest. Locally milled rice is of poor quality
and is consumed mainly in the rural areas. Imported parboiled rice
competes effectively against other basic food staples, which explains
why import volumes have trended upwards in recent years.

Over the past year, the retail price of rice increased on average by
about 30 percent reflecting the increase in the import duty and a
devaluation of the local currency. However, the consumption level has
remained fairly stable. Rice remains a regular item in the diet of most
Nigerians, largely because of the convenience and the variety of ways it
can be prepared. In Nigeria, rice is served as the main dish, not as a
side food as in most other countries.

# Trade

Post forecast Nigeria's rice imports in MY2004/05 at 1.7 MMT, up from
the revised MY2003 estimate of 1.6 MMT. The projected increase is due to
limited supply of locally produced rice and other alternatives such as
yams and beans.

Trade estimates of Nigeria's wheat imports used in this report include
all parboiled rice shipped to Cotonuo port. Following a collaborative
study initiated by FAS/W in early 2004, we gathered that virtually all
parboiled rice shipped to Benin Republic are actually destined for the
Nigeria market. Nigeria is the only market for parboiled rice in the
West African sub-region; Benin Republic is a market for regular milled
white rice.

The GON's prohibitive duty on rice imports is encouraging cross-border
smuggling of the product. The import duty on rice is 100 percent. When
port charges and other taxes are assessed, the effective duty on rice
entering Nigeria through Nigerian ports is 119 percent. On the other
hand, imports to Benin Republic attract only 35 percent duty,
representing a \$200 per ton price advantage over imports through
Nigerian ports. Nigerian importers simply land their imports in Benin
and then smuggle them into the country. Some importers ship to Cotonou
port (Benin) and declare them as transit goods destined to the
land-locked countries of Niger and Chad. Transit goods attract only five
percent duty in Benin. The rice is subsequently smuggled into Nigeria.

# Marketing

Currently, U.S. milled parboiled rice can only compete for a share of
the top niche segment of the Nigerian market. U.S. rice exporters are
encouraged to collaborate with leading Nigerian importers to boost sales
of their products. Promotional activities should target the growing
middle to high-income consumers. These segments of the market are
willing and able to pay for premium quality U.S. rice. Given appropriate
marketing support, this market segment can increase commercial import
purchases from the U.S. to 100,000 tons annually, up from the current
level of less than 1,000 tons within three years.

# MAIZE

+-------------+-------+-------+-------+-------+-------+-------+-------+
| Nigeria     |       |       |       |       |       |       |       |
|             |       |       |       |       |       |       |       |
| Corn        |       |       |       |       |       |       |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+
|             | 2002  | Re    | 2003  | Est   | 2004  | For   | UOM   |
|             |       | vised |       | imate |       | ecast |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+
|             | USDA  | Post  | USDA  | Post  | USDA  | Post  |       |
|             | Off   | Est   | Off   | Est   | Off   | Est   |       |
|             | icial | imate | icial | imate | icial | imate |       |
|             | \[    | \[    | \[    | \[    | \[    | \[    |       |
|             | Old\] | New\] | Old\] | New\] | Old\] | New\] |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Market Year |       | 10    |       | 10    |       | 10    | MM    |
| Begin       |       | /2002 |       | /2003 |       | /2004 | /YYYY |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Area        | 3500  | 3500  | 3700  | 3700  | 0     | 3700  | (1000 |
| Harvested   |       |       |       |       |       |       | HA)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Beginning   | 111   | 111   | 119   | 119   | 119   | 119   | (1000 |
| Stocks      |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Production  | 5200  | 5200  | 5150  | 5150  | 0     | 5200  | (1000 |
|             |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt.  | 8     | 8     | 50    | 50    | 0     | 20    | (1000 |
| Yr. Imports |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Oct-Sep     | 8     | 8     | 50    | 50    | 0     | 20    | (1000 |
| Imports     |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Oct-Sep     | > 0   | 0     | 0     | 0     | 0     | 0     | (1000 |
| Import U.S. |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL       | 5319  | 5319  | 5319  | 5319  | 119   | 5339  | (1000 |
| SUPPLY      |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt.  | 0     | 0     | 0     | 0     | 0     | 0     | (1000 |
| Yr. Exports |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Oct-Sep     | 0     | 0     | 0     | 0     | 0     | 0     | (1000 |
| Exports     |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Feed Dom.   | 300   | 300   | 300   | 300   | 0     | 320   | (1000 |
| Consumption |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.  | 5200  | 5200  | 5200  | 5200  | 0     | 5220  | (1000 |
| Consumption |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| Ending      | 119   | 119   | 119   | 119   | 0     | 119   | (1000 |
| Stocks      |       |       |       |       |       |       | MT)   |
+-------------+-------+-------+-------+-------+-------+-------+-------+
| TOTAL       | 5319  | 5319  | 5319  | 5319  | 0     | 5339  | (1000 |
| D           |       |       |       |       |       |       | MT)   |
| ISTRIBUTION |       |       |       |       |       |       |       |
+-------------+-------+-------+-------+-------+-------+-------+-------+

# Production

Post forecasts Nigeria's corn production in 2004/05 at 5.2 MMT, up from
5.1 MMT in MY2003/04. The projected increase is based on the timely
arrival of rains in the grains belt and GON's commitment to improve
input supply this year. Last year, Nigeria's corn output reportedly fell
by about four percent reflecting the impact of the scarcity of
fertilizer products. Most corn growers switched from corn to the less
fertilizer-dependent soybean and sorghum. The shortfall in supply is
exacerbated by transport problems and speculative purchases by
middlemen. Corn is currently sold for \$230 per ton compared to \$140
per ton this time last year.

# Consumption

The bulk of Nigeria's corn crop is directed for human consumption.
Brewery demand for corn grits is growing in step with growth trends in
the industry.

Feed utilization of corn is trending upward thanks to the rapid growth
in the poultry sector. Approximately 98 percent of all feed produced in
Nigeria is poultry feed. Total corn usage for feed production in Nigeria
is forecast to increase to 320,000 MT in MY2004/05. Although the
industry would like its poultry feed to consist of nearly 65 percent
corn, high corn prices is forcing producers to reformulate in favor of
other grains such as sorghum, wheat, and millet. Feed manufacturers are
maximizing usage of corn and wheat milling by-products along with
soybean oil as substitute sources of energy in their feed formulas.

# Trade

Corn import demand, however, suffers from a prohibitive import duty of
70 percent. In addition to the duty, corn imports are subject to: 1) a
port surcharge equivalent to 7 percent of the duty amount, 2) a customs
administrative charge equal to 1 percent of the FOB value, 3) an ECOWAS
levy equal to 0.5 percent of the import duty, and 4) and a value added
tax of 5 percent. The effective duty on corn imports is estimated at
more than 80 percent. Unofficially, the GON discourages corn importation
to protect local producers.

# Marketing

In line with USG's efforts to assist the Nigerian Government in
revitalizing its moribund agricultural sector, FAS Lagos is working
closely with the local poultry industry. Post facilitated the
participation of 50 Nigerian poultry operators at the International
Poultry Exposition in Atlanta in January 2003. Thirty of the delegates
received training in modern poultry management under USDA's Cochran
Fellowship Program. Post support for this activity is based on the
realization that the Nigerian poultry industry possesses enormous
capacity for growth in the medium to long-term. Growth in the industry
is likely to be dependent on increased imports of U.S. grains.