With the dependence on Russia and Ukraine for wheat and other produce that are used as raw materials, prices of food items like Semolina, bread and fish could spike in Nigeria over the lingering conflicts between the two East European countries.
Nigeria depends on both Russia and Ukraine for 31 per cent of her wheat needs while three species of fish–Herrings, Blue whiting and Mackerel that are popular on Nigerians’ menu list also come from Russian waters, and sanctions against Russia over its invasion of Ukraine could make them costlier to get. Nigeria imports 27 per cent of her wheat from Russia while 4 per cent of her wheat come from Ukraine.
Russia invaded Ukraine on February 24 and this has drawn severe sanctions against the former from the rest of Europe and America.
The sanctions on both air and waters, occasioned by the 19-days war in Ukraine, have affected imports from the two countries into Nigeria and created worries for the Lagos Chamber of Commerce and Industry [LCCI] according to its president, Michael Olawale-Cole who fears, this could impact prices.
Olawale-Cole’s fear is heightened by the increase in the cost of transporting cargo by sea, land and air, which had already jumped during the pandemic, as global oil prices surged past $130 a barrel this week.
Nigeria depends on Russia for four main items namely, Durum Wheat, and three species of fish, Herrings, Blue whiting and Mackerel.
Durum wheat is a spring species and one of the most popular that is often used in foods like bread, pasta, noodles, couscous, semolina, bread and pizza dough.
Data from the Flour Millers Association of Nigeria [FMAN] shows the importation of the four items cost N2.2 trillion annually, and the LCCI president feared, this could spike and also influence hike in the prices of other food items that are the end products like Semolina, bread and others.
Nigeria spent N933.38 billion on the importation of the four items from Russia between the third quarter of 2020 and the corresponding period in 2021 according to the National Bureau of Statistics [NBS], thereby heightening the chamber’s fear that the scarcity of those items in Nigerian market may have grave implications.
Russia, according to the NBS is the sixth major exporter to Nigeria as of the third quarter of 2021, coming after China, India, USA, Netherlands and Belgium.
The NBS report also showed that Russia was among Nigeria’s top 10 import trade partners between the third quarter of 2020 and the corresponding period in 2021.
The military crisis and the attendant sanctions have caused blockage which squeezed global grain supplies from one of the world’s biggest grain-producing regions, pushing wheat prices higher on world markets and fanning the threat of inflation.
Russia and Ukraine together account for nearly a quarter of global exports of wheat and this heightened the LCCI president’s worries especially when nobody knows how long the current disruptions in the food supply chain will last.
“In developing economies including Nigeria, where populations already struggle to afford food, disruptions to food supply may result in substantial additional hardship and instability”, stated the LCCI President who feared that the disruption of Ukrainian wheat supplies may prove doubly painful for countries already squeezed by food insecurity and rising food prices as we have in Nigeria.
Ukraine was the second-largest supplier of wheat to the United Nation’s World Food Programme [WFP] in 2020 and 2021 and the difficulty in procuring wheat from Ukraine, will likely cause the WFP to purchase the grain from other more expensive sources and thereby, have less aid to provide to those at the greatest risk. This means that humanitarian assistance to developing countries will be disrupted at least in the short term.
He advised that government at all levels, at this time, should open up their reserves [if there are any] to boost supply to stabilise prices at least in the short term. Alternatively, the government should intervene by way of initiating imports from other sources outside the war zones.
“However, the most sustainable solution is for the government to boost local production of these staples to levels that meet local demand. The world economy is already feeling the impact of the disruptions caused by the war on global supply chains. This is reflected in the rising local prices of petrol and diesel, as in the case of Nigeria where we depend on oil imports. Today, it is not just about the skyrocketing price of diesel which has risen above N700.00/litre, but that the product is now scarce and difficult to get.”
Source: Insidebusiness