Sesame Seed Market Report 8th Nov 2013

 

So finally the wolf has arrived. All these years we've had the same stories from India about short crop , no raw material , no carry over stocks but this year it looks like the story is finally true.

Ohh...My God , Are you guys Crazy...etc etc , some of the very common phrases we have been hearing everytime over the past few weeks and to a certain extent I agree with the clients that Indians have indeed gone crazy. Yes the markets are short but the kind of daily/weekly movement we have seen in the recent past are just plain crazy.

Like I have been saying for the last few months that the market remains bullish despite the prices which fell periodically from time to time , the reason being more currency driven rather than an excess supply or a lack of demand.

Let us look what happened first :-

1:- We all knew that India had a good monsoon but we failed to recognize the fact that a good monsoon   does not always mean a good crop specially when the crop is sesame . I had specifically mentioned this point in my september report before the crop even arrived.

2:- Carry over stocks were depleting quickly and we thought we can live without them as soon as the new crop would come in.

3:- The currency movements were so sharp in the past few months that it made the markets almost directionless .Everyone was playing more with the currency rather than the actual commodity prices.

Current Situation :-

1:- Despite the initial losses due to heavy rains in India and the losses in the northern states of UP/MP the growth figures coming from Rajastan and Gujrat made everyone believe that the overall numbers of total crop would be more or less same as last year , however the late rains changed all that.

2:- The numbers put forward by various agencies/associations/trade estimates say the total crop is around 200,000 - 220,000 Mt. I would say these numbers are more or less correct looking at the average arrivals in the local markets over the past 30 days.

3:- I have no doubts that the export numbers from India will fall dramatically this year however from now until October 2014 the majority of global Hulled Sesame demand will still have to catered by India which means we will still easily export about 200,000 MT in the coming 10 months.

4:- Korean Tenders have shown an affinity towards the Indian suppliers and even the last tender was a testimonial of the fact that a major share of the Korean Tender will still be catered by India despite the high prices here. In a previous report I have explained how the complications with documents , the finances involved , the complicated Bid bonds etc ,the consistency in Quality and transit/delivery period all put together give an advantage to India for the Tenders.

5:- Last year we had carry over stocks at the start of the season , Indian's entered African market early and got some really really nice bargains for Importing the sesame into india which helped keep the market under control , this year however the Africans are in no mood to sell cheap to India. With prices already very high the risk factor has gone up so much that the handful of people who really do Import and reexport from India are also in a wait zone.

6:- The supply continues to remain weak  , the quality coming into the markets is 90% rain damage which means although it can be used for hulling the yields will be much lower compared to previous years which would mean higher pricing for Hulled. Sometimes for the factories it takes a little longer to realize the losses/cost increase due to yields and lower sales but I am sure eventually everyone will realize these finer points and costings for hulling units will have to be revised.

7:- The 99/1 grade is in very very short supply , the arrival overall are not even 100 mt /day for good quality which means that the prices for good quality Natural are almost at par with those of low quality hulled.

8:- At the moment there are only 3 kinds of buyers in the market

     a:- Exporters who sold forward and are short.

     b:- Buyer's who sold forward and did not cover.

     c:- Domestic demand which despite high prices is very strong atleast till dec.

So even though a lot of buyers who say they have enough in their books and are well covered for the next few months  have not been covering more at higher levels , I am afraid suddenly everyone will realize their warehouses are empty and will jump back into the market at high levels asking for spot shipments creating a bigger ripple than there already is.

What can happen over the next few months :-

1:- Diwali festival is over , everyone in India waiting in anticipation that the arrivals will increase after diwali and a correction will happen. I have a feeling it might be correct, however we have time and again told our buyer that the window will be very small . Anyone waiting to catch the bottom might just miss the train altogether.

2:- If the arrivals do pick up we might see a correction of about 5-6 % , I am not expecting a big fall right away as the supply chain is still empty. A supply based bullishness can only be countered by excess supply and unfortunately we do not see any big supplies coming in and pulling the markets down.

3:- If the arrivals do not pick up everyone should be ready to pay a further premium of about 10% . We are already at all time high levels in terms on pricing in Indian rupee but there is always scope of some further upward movement.

4:- I remember a few yrs ago when Hulled Sesame crossed Rs 100 everyone said its just not sustainable and prices will crash , I explained the phenomenon in a previous report about new market benchmarks which are bound to happen every few yrs , I guess the next target would be Rs 200 , I doubt that atleast for this year it will be breached or can be sustained even if we do manage to touch it but I am sure that the current prices are fair  enough to be workable over the new few months.

5:- Africa as we all know holds the key to the markets , if the big boys there start manipulating the markets , which is very much possible looking at the global situation right now we are in for a tough year ahead.

6: -The news from Africa is not very promising either , none of the destinations are reported to have a bumper crop , at least not to the extent that they can cover the losses in number's we've had in India and China. BTW China crop was reported short as well and by estimates is only around 250,000 Mt.

Ofcourse the demand will fall this year and maybe to a certain extent some institutional buying from big bakers and confectionary makers will be less. However like in the past we still firmly believe that price is not a deterrent atleast for food products. A company may think that since their sales are down people are eating less , the fact in most case is just that one of your competitor is now cheaper or has ready cargo to offer and your buyer has merely shifted their demand to someone else to average out their costs and to sustain their demands because you didn't have enough to offer.

Some of my friends tell me..Ahh you can live without sesame , who's gonna pay such high prices.

But I tell them we can live without a lot of things we don't really need  yet people pay loads of money to eat them.

I do believe a good chunk of sesame application will be shifted towards other seeds but as the wheels turn everyone will notice that the retailers over a period of time have revised their prices and when prices of sesame do fall these people will make a killer profits as retail prices hardly ever get revised downwards and the one's who sat back will regret not being among them.But thats for long term , just a thought :)

I've heard numerous arguments of Africa emerging as a competitor and taking over the market share of India. The reports are absolutely 100% correct , did'nt India do the same taking over the market share of South America and china. The fact is we dont have enough seeds in India so naturally we are more expensive than Africa is at the moment . Africa also has the advantage of heavy export subsidies , currency valuations against USD and duty benefits in China but all these factors put together do not make a stable and a long term growth story. Its all about which country has a better and bigger crop , so atleast for the next few years the global markets cannot ignore the India story. Once India gets back its big crop that would be the time for a fair comparison.

As always our suggestions this year would be:

1:- Stick to your reliable suppliers. A regular and old supplier is more likely to help you make a good average over long term rather than any flash supplier who is offering 4-5% cheaper right now.

I would not  suggest gambling away $60,000 for a $1000-1500 saving on a container.

2:- Stick to Quality , in short term switching to cheaper grade of sesame might look like a good decision but in longer run you risk loosing your potential clients when problems start and you unknowingly enter into a price war market where the competition is that much tougher. If you loose a business because a client wanted lower quality because it works for him there is a chance he will come back to you when he has problems or when he wants to move up in terms of quality segment but when a client moves away because he's looking for the cheapest price of the lowest quality where do you go.

Everyone in commodity market knows the china story , they captured every segment of business with cheaper prices but the party didn't last long. Would you today buy a cheap chinese product or a slightly expensive one made elsewhere ? BTW both sell, its just a matter of prospective.

3:- Like always please do not be tempted to catch the bottom , the best way forward is working on a average and atleast for hulled I would say an average price of USD 2800-2850 over the next few months should be a good buy this time. You might not get the volumes every-time so its important to be active in the markets at all levels and keep shopping/selling at all levels.

Sesame is no longer a cheap commodity and it sure is a very volatile one , in the next few years the competition is bound to get smaller because the smaller players will be pushed aside as the profit margins will be far less than the proportionate prices of investments and the risks involved , the one's who will survive will be the one's who stuck to the basics of business.

Right Quality - Right Price.

Once again we thank you for all the support and look forward to you comments.

KEEPING IT REAL - KEEPING IT SIMPLE

http://sesameseedmarket.blogspot.com/2013/11/sesame-seed-market-report-8th-nov-2013.html

ESTABLISHING A SESAME SEED CLEANING AND DEHULLING PLANT IN NIGERIA, HOW VIABLE?

Sesame seeds have a thin shell or husk which needs to be removed and this process is known as dehulling. The weight of hull is about 17% of total weight of sesame seed. The hull contains a great deal of oxalic acid and indigestive fibre. Oxalic acid can reduce biological utilization ratio of Ca in Food and influence taste. After sesame hulling, oxalic acid can reduce from 3% to 0.25% in sesame seeds, which improve the protein digestibility greatly. 

De-hulled sesame seed is mainly used to add texture, taste and aesthetic value to a variety of bakery products like bread, bread sticks, cookies, sesame bars etc; and also as an additive to cereal mixes and crackers. The whole seed is most important ingredient while preparing confectionery tahini (a halvah made from crushed, roasted and sweetened seeds) in the Gulf countries. The seed is rich in protein, carbohydrates, fibre, fat and some minerals content. 

Dehulled sesame has uniform white colour and is ready for use in cookery and confectionery. It is rich in protein (22%) and oil (60%). It has a large demand in domestic as well as export markets particularly for use in the confectionery industry.

International demand for sesame continues to increase every year. The worlds traded sesame seed recently surpassed one million tons per year and was valued at roughly $850 million. In the last 15 years, world trade in sesame has increased by nearly 80 percent. 

The total global harvest was about 3.84 million metric tonnes of sesame seeds in 2010. The largest producer in 2010 was Burma (Myanmar), and the top three producers, Burma, India, and China, accounted for 50 percent of global production. 

Twenty-five percent of world sesame hectarage is planted in Africa. The crop, which is one of the oldest cash crops in Nigeria, is produced in about 21 states of the federation but it is predominantly found in Benue and Jigawa states. Sesame production increased from 15,000 mt in 1980 to 56,000 mt in 1994. Available data from FAO shows that Sesame production in Nigeria further increased from 60,000 tons in 1995 to 75,000 tons in 2005. An estimated 334,685 ha of the 3.5 m ha arable land suitable for its production is currently under sesame production in Nigeria.

In terms of export value, sesame seed ranks second to cocoa in the volume of export and foreign exchange earnings. Nigeria is currently among the top five largest producers and exporters of the commodity in the world with an estimated production of over 120,000 metric tonnes annually. The major market destinations for Nigeria's sesame seed are Japan, Korea, China, Turkey and the Middle East.

Sesame can be processed to several different stages, such as simply cleaning, or cleaning and dehulling, cleaning/dehulling/drying,cleaning/dehulling/drying/crushing for oil, etc. In Nigeria, the primary processing facilities focus almostexclusively on cleaning. There are a few commercial cleaning facilities, and they are all privately held. Two are in Kano with a cleaning capacity of about 100 tonnes a day, and one is in Lagos with a cleaning capacity also of about100 tonnes a day.

 

There are also dehulling/cleaning/color-sorting facilities in Lagos, but most of the sorting is done manually by women, some located at storage facilities in Lafia and Makurdi. There are no commercial crushing plants for sesame seed oil.

A commercial cleaning facility is about to be installed in Nassarawa State, with a capacity to handle about 200 tonnes a day. 

The above situation presents an opportunity for savvy investors to engage in the cleaning and dehulling of sesame seed in Nigeria.

http://www.foramfera.com/index.php/investment-opportunities-in-nigeria/item/533-establishing-a-sesame-seed-cleaning-and-dehulling-plant-in-nigeria-how-viable

Olam to set up N3bn sesame seeds plant in Nigeria

OLAM Nigeria Limited has made its intention to set up a N3 billion sesame processing plant in Shagamu, Ogun State.

Olam Nigeria is the subsidiary of Olam International Limited (“Olam”), a leading global, integrated supply chain manager and processor of agricultural products and food ingredients.

Speaking in Lagos when the management team of the Nigerian Export Promotion council (NEPC) were on a tour of the company’s Sesame Seed Factory, the country Head of Olam, Mr. Mukul Mathur explained that the exportation of sesame seeds from Nigeria to Europe and Asia has increased over the years.

“Every home in Europe and Asia eat oil made from sesame seed exported from Nigeria to those countries,” he added.

He listed some challenges faced as those from cultivation to processing, as well as delays at the seaport, high cost of transportation and electricity, saying that they are major constraints confronting the growth of the industry.

He said it is cheaper to produce sesame seeds from cultivation to exportation in Sudan and Ethiopia even though the one from Nigeria has been adjudged better.
He said the new plant would be built on 25 hectares of land already acquired by the company in Shagamu, Ogun State.

In 1989 Nigeria was the launch-pad for Olam’s global business endeavours, and the company had featured prominently in the country’s economy ever since.

With an initial focus on the procurement of primary commodities like cashews, cocoa and sheanut, Olam gradually refined its operational scope and expanded operations into three major business streams, namely: exports, imports, and branded packaged food products under Caraway Foods.
Today, the company has  approximately 1,380 staff spread throughout the country, engaged in helping to manage the value chain activities of origination, processing, marketing and distribution.

Olam also continue to reinforce its operations through both organic and inorganic expansion, expecting to shortly commence production in its mechanical cashew processing facility at Ilorin in Kwara, and recently acquiring both the Crown Flour Mills and the De Rica brand of tomato paste.

Olam’s efforts in Nigeria have been recognised with several prestigious awards, including the 2011 Africa Business Award for Corporate Social Responsibility to recognise our highly-acclaimed extension programme for rice farmers in Benue and Kwara, and the 2010 award for Overall Best Exporter of the Year.

http://www.vanguardngr.com/2013/03/olam-to-set-up-n3bn-sesame-seeds-plant-in-nigeria/

HANDLING LETTER OF CREDIT CHALLENGES, RISKS & DISCREPANCIES

EXPORT SEMINAR PROMO

CRUSHING AND MILLING MACHINE (GX700) FOR SALE- (Asking PriceN4,000,000)

EXPORTING FROM NIGERIA BLOG IS 4 YEARS OLD !!!

COMPREHENSIVE EXPORT TRAINING KIT

PRATICAL SHEA BUTTER PRODUCTION WORKSHOP

HARDWOOD CHARCOAL AVAILABLE FOR EX-LAGOS DELIVERY

We have a large quantity of HARDWOOD CHARCOAL for ex-Lagos delivery.Our specifications, payment terms, pricing and other terms and conditions are as follows: 

Specifications:

a. Purity: 99% minimum

b. Moisture: 5% Maximum

c. Size: 30-100mm Max

d. Carbon: 70% minimum

Price: 27,000/MT 

Payment Method: 

Option 1: 50% Down payment and balance upon delivery and confirmation of quality and quantity.

Option 2: Supplier Issues Bank guarantee for 100% of the product and 100% payment is made after  50% 

Delivery Destination: Buyer designated location in Apapa Area of Lagos

Contact Details: Interested suppliers should contact us via info@3timpex.com and +234 803 6522 946.

2013 EXPORT SEMINAR PROMO

THE TROUBLE WITH AGRIC FUNDING IN NIGERIA

Credit facilities to finance agriculture is a vital incentive farmers need from governments. Anywhere farming is taken as a business, it needs adequate funding to thrive, boost production and sustain income.

Funding for agriculture is yet to make meaningful impact on Nigerian farmers and the country’s economy. It is yet to be strongly embraced or facilitated by the private sector—especially commercial banks—and international agencies as the World Bank, International Fund for Agricultural Development, and other development partners.

Private sector support through agriculture loans and grants is growing in Kenya, even more in US, UK, China, Brazil and Malaysia to keep farmers in business.

But in Nigeria, analysts see unending trouble in agricultural financing after loans approved for farmers over the years by successive administrations failed to meet the yearning of farmers.
At the recent Nigerian Economic Summit in Abuja, women like Yemisi Iranloye, a cassava farmer, lamented the stringent conditions that make agricultural loans inaccessible to farmers, while urging for very low interest loans to rural farmers especially.

Agriculture minister Akinwumi Adesina, has maintained since taking office that all agriculture value chains, including agricultural finance, will be turned around as the sector is now being treated as a business, not a development issue.

When former President Olusegun Obasanjo approved N50 billion for agriculture, farmers jubilated across the country with no knowledge that the money was unavailable.
Investigations later revealed the 25 banks consolidated during the tenure of Central Bank governor Chukwuma Soludo were directed to earmark N2 billion for lending to agriculture in attempt to make them embrace agricultural financing.

But the directive met stiff resistance when most banks in their business wisdom decided to have nothing to do with giving loans to farmers—because agriculture is tagged as high risk business from which they may not recover their money.
The unanswered question on the lips of farmers all over the country then was: “Where is the money?” Many analysts and stakeholders as at that time berated the government, saying that the policy was deceptive.

Government’s approval of agricultural loans did not end with the exit of President Obasanjo.
Last year, President Goodluck Jonathan disclosed that a bond of N200 billion has been floated for farmers to access. Even recently, during the 19th Nigerian Economic Summit in Abuja, the Vice President, Namadi Sambo, announced a grant of N15 billion approved for farmers through the Bank of Agriculture (BOA), for the 2013 farming season.

The irony: the grant comes three months to the year end, when some crops have already been harvested.
Despite these federal interventions, farmers indicate they are not accessing the facilities. Where then does the problem lie?
Many analysts and stakeholders blame government insincerity. Others finger commercial banks shying away from funding agriculture; some more blame illiteracy of peasant farmers, which puts political farmers in vantage position to hijack loans.

Lending to agriculture by commercial banks has been reportedly lower than in other sectors. A need for improvement prompted CBN Governor Sanusi Lamido Sanusi to introduce revolutionary Nigerian Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL, to encourage the banks to lend to agriculture with confidence at low cost.

Under current arrangement, risks and costs of loans given to farmers are shared by the CBN and commercial banks in case of default, but few banks have some commitment to agricultural lending.
National Planning minister Shamsudeen Usman believes there must be a softer loan to push even faster development of agriculture sector. Speaking at the 19th Nigerian Economic Summit in Abuja, he said attention must be paid to the banking sector on issues relating to agriculture.

http://dailytrust.info/index.php/agriculture/9389-the-trouble-with-agric-funding-in-nigeria

THE 4 INDISPENSABLE PILLARS OF EFFECTIVE & EFFICIENT TRADE FINANCE...

2013 EXPORT SEMINAR PROMO

Banning Cocoa Beans Exportation Will Be Counter Productive

Prince Oluwole Oginni is the Chairman, Lagos State chapter of Cocoa Association of Nigeria (CAN). In this interview with YINKA OLADOYINBO, Oginni, who is also the leader of cocoa exporters in Nigeria, highlights the potentials of the  cocoa  industry  and the investment opportunities available therein.

How would you rate the contributions of cocoa to the economy of the nation?
Nigeria is the fourth leading exporter of cocoa in the world, after Cote d’Ivoire, Indonesia and Ghana. Cocoa export is the main agricultural export. Cocoa is the next biggest foreign exchange earner aside from oil. It  is currently the most important agricultural export in Nigeria. Prior to the oil boom era in Nigeria, cocoa, cotton, groundnut, oil palm produce and rubber were the principal export commodities. With export re-orientation, only cocoa remained of any importance after 1975. With assistance from the World Bank, the government restored cocoa production in the late 1970s and 1980s through replanting programmes and producer price supports. As such in 2009 for example, cocoa beans export was $599 million, cocoa butter export was $57.4 million while cocoa powder and cake export was $8.4 million making a total of $664.8 million. You will recall that a few decades back, revenue from cocoa export  was used to finance some of the regions.

Cocoa is of paramount importance to Nigeria. Our economy relied heavily on cocoa for foreign exchange in the past until  the  discovery of  oil. Millions of families earn their living by growing cocoa on farms with an average area of between four and five hectares and the proceed is crucial to the farmers and their families.

Cocoa from Nigeria has gone through a period of decline in recent years, in terms of both quality and quantity. Under pressure from the International Monetary Fund (IMF) and the World Bank, the government was forced to dismantle the  cocoa board in 1986. The abrupt liberalisation led to chaos and reduced quality. Structural adjustment policies have resulted into market liberalisation, resulting from the abolition of commodity boards, the introduction of free market policies, and the fluctuation in local cocoa prices.

Nigeria was the first African country to liberalise cocoa trade. Following the World Bank indication that agricultural marketing boards in the country were ineffective, and the suggestion to liberalise agriculture following to the liberalisation of foreign exchange, the Nigerian government unilaterally abolished marketing boards.

Main trading partners importing cocoa beans from Nigeria are European Union countries. Among all, The Netherlands holds the biggest share of quantity imported from Nigeria between 2005 and 2010, with an average of 30 percent of total quantity exported during those years. With 13 per cent and 12 per cent respectively of share Belgium and France follow the Netherlands, while the UK and USA both imported 5 per cent of cocoa beans from Nigeria during the same timeframe.
Cocoa Association of Nigeria has since 1986 been the private sector partner to government as it galvanises support for all government policies in the cocoa industry and links up with the international cocoa market wherever necessary.
 

Without doubt, cocoa contributes a huge amount to the nation’s economy. All you need to look to convince you is  to take a trip to a cocoa producing community like Idanre in Ondo State or Ikom in Cross River State or Ilesa in Osun State. What you will notice in these communities is that the quality of life is much better, especially during the main crop season. Cocoa producing states too are much safer than other states. You can check your crime records and you will agree with me.
With recent awareness on the health and nutritional use of cocoa, (which is given promoted and supported by CAN, there is a new upsurge in cocoa consumption locally. This helps in the health and wealth creation ability of Nigerians and contributes significantly to the nation’s economy.
So, bottom line is: cocoa income makes the country safer in a way that even oil income does not, because more people are actively and positively involved in the cocoa value chain.

There has been a clamour for the return of cocoa board into the sector, do you think there is any justification for this?
The marketing board was set up to serve as intermediary between the farmers and the international market. The board was expected to stabilise prices paid to the producers, ensure public access and control over foreign exchange. During this period, there were other factors that influenced cocoa production, marketing and price received by cocoa farmers. These include: bureaucratic problems associated with commodity boards. With the coming of oil, people decided to abandon cocoa. With the coming of private entrepreneurs like us, the sector is picking up. There is a collective effort to revive the industry. Some states are trying to provide agric loans to support cocoa farmers to do cocoa plantation. Banks  such as Bank of Agriculture and Bank of Industry are giving facilities  to  businesses  to carry out  cocoa production.

We buy cocoa beans from traders and sell to chocolate manufacturers as well as to other industries. There has been increased demand for certified cocoa products, especially chocolate, leading to increased market opportunities. We ensure quality control processes that are important to large industry players to use our cocoa beans in their chocolate products.
Any cocoa corporation or board that would come on stream now should promote quality and ensure fairness in the cocoa value chain. It must work with CAN to promote cocoa in all its ramifications locally and on the global scene.

How do you respond to the call for ban on export of cocoa bean?
Some people are advocating ban on cocoa beans. There is no justification for it.  The government  has initiated  a programme to encourage the production of  cocoa. We have invested  in the  business and the production level is such that the  present processors cannot  exhaust 10 per cent of it locally. They don’t have the local processing capacity. They don’t have the technical capability to carry out standard processing. Some of the processing companies are operating at a loss. So if the exporters are  breaking even, they are equally generating employment.

Banning export of the beans will throw a lot of Nigeria out of work and shut down companies. The  local value-addition efforts are  not acceptable to  international companies because of  the  quality of local processing  and  of the  processing  facilities.

Export ban  will  put the  cocoa market in turmoil. As a major cocoa exporting company, we accounts for the bulk of cocoa bean and product exports. As an Association, CAN promotes healthy and overall growth of the entire value chain, without neglecting or hurting one part.

Higher cocoa prices, as you see today because of the value chain as it is presently constituted, equates to greater incentive for cocoa farmers, leading to greater production and improvement in livelihood.
We have come along this road before and the results took several years to pan out. The industry was severely hurt and it took CAN and cocoa exporters to rebuild the confidence of the industry. As the last time, this campaign is being promoted for purely selfish interests. The advocates have access to the media and have some connections with policy makers. They want to use these channels to stampede the country on a road that will rubbish all the progress made so far and return us to dark days.

You will see that no section of the cocoa value chain is behind this reckless campaign. That sends a message: that the distortion being promoted will not do us any good.
Where in the world is cocoa bean export banned because of local processing? Check out all producing countries - from Cote d’Ivoire to Indonesia, Ghana to Brazil, Malaysia to Togo. Do we grind as much cocoa as Cote d’Ivoire or Ghana? Do we consume as much cocoa as Brazil or Indonesia? You must see in all of this that it is not patriotism that drives these individuals but sheer selfishness, and maybe a diversion strategy.

Don’t you think that we should be processing all the cocoa beans we produce in this country instead of exporting raw beans? Don’t we have the capacity to do so?
CAN supports value addition for improved national income. However, you don’t jump into value addition. There is a process to follow. One of them is not stopping or banning cocoa bean export. You know that there is systemic failure in infrastructure across the country. This has direct impact on cocoa processing, as it affects other sectors of the economy. What is not so obvious to outside observers is that the quality of cocoa products coming from our factories is mostly below international standards. You can check this out yourself. That is not to say that we should not promote local industries and improve on the standards. But the reality is that in order to promote a holistic improvement in the industry, you have got to grow the entire value chain side by side.

What must be borne in mind is that no one plucks cocoa pods and sends them to the market. There is a whole lot of processing that takes place at the farm gate and in warehouses before the beans are exported. Cocoa exporters actually add a lot of value to the beans before export. You see the activity going on in my warehouse now. We have installed driers, cleaners and other machines to prepare the beans for export. We employ many young men and women to do the work to support the machines. We spend millions of naira every week to promote the quality of Nigeria cocoa and this is what you see with other serious Nigeria cocoa exporters.

We really look forward to the time when we shall utilise the entire beans produced in Nigeria, if that ever happens. Remember, the target of government is to hit about 500,000 metric tonnes by 2015. Who will utilise this quantity locally? The cost of setting up a 10,000 metric tonnes capacity cocoa processing factory in the country is about N3 billion. The cost is huge and very few people are interested in investing in that area. So asking the government to discourage export of raw cocoa beans in order to protect Nigerian value addition and job creation is  not  realistic  because  we don’t have  the  capacity  to  process  cocoa.

Consumers in Europe, America, Asia are very conscious about food safety.  Farm-to-market transportation in Nigeria is difficult and often leads to quality issues in the value chain; so also are access to land and processing facilities, and funding for expensive inputs. These challenges have had an impact on cocoa quality.

Cocoa processors accuse you (cocoa exporters) of making it difficult for them to purchase beans to feed their mills, thereby causing them to lose money and pile up huge debts. How do you respond to that?

We agree  with the fact that processors are facing significant challenges. The truth is that Nigeria lacks the capacity to process cocoa to meet international standards. The  processing factories processing of cocoa beans into intermediary products such as nib, butter, liquor, cake and powder suffer as a result of low capacity utilisation arising from a number of factors including lack of finance, high production cost, low level of local consumption of cocoa products, poor industrial infrastructure, absence of viable small and medium scale enterprises to absorb part of the intermediate products.  

Whereas local processing of cocoa would strengthen our  position in the market, it also has a number of limitations. Not only does it require considerable know-how and adequate production levels, but it is also dependent on cocoa supply, which is seasonal in character.Also, processing cocoa is one thing, finding a customer for the processed cocoa is another.

From the above you can see that local cocoa exporters have no blame here; instead we provide a significant support for the market through paying good prices to farmers, providing quality inputs for improved production, providing training for cocoa certification and supporting farmers during times of financial stress. If these services and support are withdrawn for any reason, then prepare for another group of militants who will lose their jobs to poor policies.

http://www.tribune.com.ng/news2013/index.php/en/component/k2/item/25308-banning-cocoa-beans-exportation-%E2%80%99ll-be-counter-productive-oginni,-cocoa-association-chairman.html

N12bn NEXIM funding provided for Nigerian export manufacturers

Nigerian Export-Import Bank (NEXIM) said it has provided N12 billion in lending to Nigerian export manufacturers, many of who put the “Proudly Nigerian” label on their products in the West African sub-regional market and globally.

The bank also said that it has funded agro-processing export enterprises to the tune of N6.6 billion in the period August 2009 to April 2013, Speaking in Abuja, Managing Director of the Bank, Roberts Orya, said agriculture alone contributes over 40 per cent to GDP with investment opportunities in cash crops like cocoa, rubber, cashew, oil palm, gum arabic among others.

“The Nigerian government seeks to develop value-chains in high potential crops and other agriculture commodities, including tomatoes, soya beans, cotton, rice, maize and cassava. In the area of mineral resources, Nigeria has over 34 solid minerals in commercial quantities.

“Nigeria is now more attractive as an investor destination with an increase in inflow of Foreign Direct Investment (FDI) to $8.9 billion in 2011 from $4.9 billion in 2004 while total merchandise trade increased from $118.93 billion in 2010 to $153.1 billion in 2011,” Orya said.

Lamenting the insignificant volume of trade between African nations, the Managing Director said the non-oil sector in Nigeria offers huge investment opportunities, saying that “Nigeria is a major producer of food and cash crops and the Nigerian government seeks to develop values chains particularly for value added products like tomato, soya bean, cotton, rice, Maize, cassava, leather and wood products.”

“With an annual food deficit growth of 3.4% reaching $22billion in 2011 according to the Food and Agricultural Organisation (FAO), Nigeria can contribute to food security in Africa,” he said.

http://tv360nigeria.com/n12bn-nexim-funding-provided-for-nigerian-export-manufacturers/?utm_source=dlvr.it&utm_medium=twitter

2-DAY INTENSIVE TRAINING ON LETTER OF CREDIT (BANKERS)

2-DAY INTENSIVE TRAINING ON LETTER OF CREDIT

Experts Decry Nigeria’s Poor Performance In Non-oil Export

International trade experts have lamented the country’s poor performance in the non-oil export segment of international trade, describing the scenario as deserving of emergency response from the government.

The experts who are members of an export round table noted the recent poor rating of Nigeria by the World Trade Organisation (WTO) in terms of non-oil export, describing it as an unfortunate irony, considering Nigeria’s immense natural endowment in agriculture and solid minerals.

As a way of responding to the nation’s poor international trade performance, one of the leading organisations in the roundtable, Bende Export-Import Limited, announced its plan to empower over 1 million Nigerian exporters in the country by 2016.

The Managing Director, Bende Export-Import Limited, Mr. Benjamin Kalu, explained that Nigeria had been ranked very low in the World Trade Organisation (WTO) ranking in terms of non-oil export.

He said the strategy to achieve the one million exporters target would involve an initiative, which he termed as train the trainers programme where new and existing exporters would be trained in order to help exporters access the international market.

“We are going to take this to the 36 states in the country because we believe Nigeria has a lot of resources to be exported to help us diversify from a mono-product economy to a more diversified economy,” he said.

According to him, the number of importers in the country outweighed the number of importers saying that, his company is working out modalities to strike a balance between the number of exporters and importers in the country.

He also stressed the need to incentivise the export market in the country maintaining that this will go a long way to encourage new and existing exporters in the nation.

“We need to keep incentivising the export market and the Export Expansion Grant (EEG) has a huge role to play in this regard. The EEG should more flexible and accessible. This is the only way to encourage small scale exporters,” he said.

He added that exporters in the country are still faced with numerous challenges while exporting their goods into the European markets stating that, it is as a result of this, Bende Export-Import limited is organising human capacity workshop to train new and existing exporters.

“At the moment, we export over 300 containers a month. We are also engaged in a tree planting exercise where anybody that cuts a tree, plants five trees back. This will help to prevent the deforestation and also protect our environment,” he said.


He pointed out that the aim of the company is to get new exporters by sharing free knowledge, sustain and mentor them in order to understand the rudiments involved in export activities.

“By doing this, we will ensure wealth distribution through job creation and these ones we have empowered today, will go back to employ more people and the nation grows,” he said.

He noted that before its intervention in the export industry, many exporters have fizzled out due to numerous challenges faced in export.

“We noticed that majority of the exporters do not know what export is all about. They venture into it without making adequate research. We are here to fetch the good ones and teach them the best way to go about export for a sustainable approach towards export,” he added.

He decried government’s lack of attention to the non-oil sector saying that the company is yet to receive any active support from the government despite its quest to work in line with the ministry of agriculture’s transformation agenda in terms of agricultural export.

“The private sectors must come in to bridge the gap between the suppliers, importers and exporters in this country. The export market needs to be incentivised for exporters to be motivated,” he said.

BENDE Export-Import Ltd is a recently registered Non Oil commodity Export Company with decades of experience in the industry derived through the partnership with SLOK Group of companies and her well established trading and management structure.

We are positioned to acquire the largest market share of the Nigerian commodity export business in no distant time, considering our available capacities, resources and comparative advantage.

To grow from a Mono-Product, Non-Oil Agricultural and Mineral Commodity Asset Company to a single National-multi-product, then to a multinational multi-product large export Global Market shares within the next five years.

We have employed structures, strategies, systems, skill packs, knowledge, experience, capacities, financial capabilities, people, technologies and physical assets to position BENDE Export-Import Limited as the most competitive new entrants into the Export market.

“Our energy is directed at the agricultural products’ sourcing, processing, storing, transporting, marketing and consulting on the export value chain.

Thinking globally, though beginning locally, geographical boundaries, both in sourcing and exporting, are seen as opportunities rather than limitations,” he said.

http://businessnews.com.ng/2013/10/07/experts-decry-nigerias-poor-performance-non-oil-export/?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=experts-decry-nigerias-poor-performance-non-oil-export

SON Tasks Government on Adire Fabrics, as FG Plans Exports Promotion

Prompted by local and international market demands as regards the standard and quality of ‘Made-in-Nigeria’ products, the Standards Organisation of Nigeria (SON) has tasked the Nigerian government, investors and general private organisations on proper standards certification of Adire fabrics and other locally-made products.

The Standards Organisation of Nigeria (SON) disclosed that some ‘Made-in-Nigeria’ products, especially Adire fabrics are recording low patronage in both local and foreign markets due to the inability of producers and government to get those products dully certified by SON, which it said had been hampering the confidence and trust that would-be buyers and consumers have as regards the consumption of such products.

Speaking exclusively with BusinessDay shortly after the maiden meeting held by Ogun State Council of Micro, Small and Medium Enterprises (MSMEs), Daudu Edward, Head, Ogun State SON Office, lamented that quite a number of locally-made products had not been certified by the agency, and therefore considered sub-standards.

Edward said that non-standard and quality certification of some products in the country by the Standards Organisation of Nigeria (SON) was against the International standards practice and therefore negatively affecting sales and exports of African fabrics and other products.

He said, “it is a pity that some locally-made products are not NIS-certified and therefore considered sub-standards. It is surprising that the much-talk-about Adire fabrics does not have NIS-certification and nobody is looking into that direction. Adire fabrics will sell more in the market and will attract more export value if there is an effort towards it certification by the Standards Organisation of Nigeria (SON).”

Meanwhile, the Federal Government, as part of efforts ensuring favourable balance of trade and payment, is planning exports promotion for Adire fabrics and other Nigerian made textiles.

Bimbo Ashiru, the Ogun state commissioner for commerce and industry, while officiating the maiden meeting of Ogun State Council of MSMEs at Government Secretariat Oke-Mosan in Abeokuta, disclosed that the Minister of Trade and Investment, Olusegun Aganga had sent a delegation to the State to meet with Adire fabrics and other local textiles producers on the evolution and production of international standard Adire fabrics.

Ashiru however, assured that the export promotion for Adire fabrics, as proposed by the Federal Government would boost investment in the Adire fabrics production sub-sector of the Nigerian economy, improve the Gross Domestic Product (GDP), create wealth and generate employment and correct the country balance of trade and payment.
http://businessdayonline.com/2013/08/son-tasks-government-on-adire-fabrics-as-fg-plans-exports-promotion/

2-DAY INTENSIVE TRAINING ON LETTER OF CREDIT

Jonathan Inaugurates Diaspora Export ;Programme

President Goodluck Jonathan has inaugurated the implementation of the Diaspora Export Programme, designed to improve trade between Nigeria and other countries of the world in her favour.

The President said during a meeting with the Nigerian community in Nairobi, Kenya, that the programme, laid down by the Ministry of Industry, Trade and Investment, would encourage the growth of Small and Medium Enterprises owned by Nigerians at home and abroad.

A statement on Sunday quoted Jonathan as saying this just as the two countries began mechanisms to double trade between them within two years with the establishment of the Nigeria-Kenya Trade and Investment Council.

Already, President Uhuru Kenyatta of Kenya has approved the issuance of five- to 10-year visas to genuine Nigerian businessmen without restriction, the statement added.

Kenyatta announced the approval while closing the Nigeria-Kenya Business Forum.

He said, “One of my highest priorities as President of Kenya is to break various barriers against investment and trade among African nations. There is absolutely no reason why Africa should submit to poverty amidst so many opportunities.

“People to people contact will solidify and encourage businesses, especially between our two countries. To allow this to happen and ensure that people travel with ease, without restriction, I have instructed my Cabinet Secretary on Interior to give five to 10-year visas to Nigeria businessmen without any restriction.”

Jonathan urged Nigerians in Kenya to key into the DEP as a veritable means of ensuring that trade between both countries improved in favour of Nigeria, adding that Nigerian women in Kenya, who had complained of not being able to start businesses, should liaise with the MITI on the steps to follow.

http://www.punchng.com/business/business-economy/jonathan-inaugurates-diaspora-export-programme/