Soya Bean: Resources Not Fully Tapped

Soya Bean: Resources Not Fully Tapped

Soya Bean: Resources Not Fully Tapped

by September 9, 2015 0 comments

Growing commercial utilisation of soya bean (called soybean in the US) in the human food and animal feed industries have created domestic supply gap leaving massive opportunities for investments in production of the commodity.

 

Sotonye Anga, coordinator, Community of Agricultural Stakeholders of Nigeria (CASON) stated few months ago, “Demand for soya beans in Nigeria is about ₦300 billion.”

 

Soya Bean Prices

First week of this September, according to Novus Agro Commodity index report, the lowest price of a ton of soya bean currently goes for ₦130, 000 in Mutum Biyu market, Taraba state and the highest price is ₦216, 670 in Relief Market, Anambra state while it is sold for ₦150, 000 in popular Mile 12 Market in Lagos. Average price of a ton of the commodity computed from the price it is sold in nine major markets spread all over the country is ₦161, 149.

 

Four to six months ago, a ton of soya bean was sold for ₦135, 000 in Lagos and this was the average price for the different markets all over the country.

 

Demand for Soya Bean

The fact that prices has gone up within these six months indicates that the demand gap estimated at ₦225 billion had still not been met adequately. This ₦225 billion demand gap is 75 percent of the total ₦300 billion soya bean market demand. So, Nigeria has been producing only 25 percent of its annual soya bean demand leaving a gap of about 75percent. Part of this demand gap is being met by importation but with scarce supply of foreign exchange, it is imperative that the country look more and more inwards for supply of commodities that can be produced domestically.

 

A Central Bank of Nigeria (CBN) Report on Grains Demand and Commodity Prices of 2013 had put industrial demand for soybean seed at a total of about 2,270,700 tons.

 

About four months ago, Anga also confirmed the Global Alliance on Improved Nutrition (GAIN) report which put Nigeria’s current annual production of soya beans at about 500,000 to 600,000 metric tons (10million to 12million bags of 50kg). This is about 25percent of the 2, 270,700 in the CBN report. By computation, this indicates that domestic supply gap of about 1.5 million metric tons of soya beans (30 million bags of 50kg) worth ₦225 billion existed and even currently, this is yet to be met.

 

Production of Soya Bean

According to various reports, Nigeria’s domestic production of soybeans is no doubt trending upwards, but there is still a shortfall in supply to demand due to heavy usage of the commodity by the livestock industry especially the poultry industry and for human food formulations. Soya bean crushers in the country are operating below capacity and are unable to satisfy the growing demand for soya bean meal and oil.

 

Soya Bean Usage

The International Institute of Tropical Agriculture (IITA) in on one of its reports says leading infant food manufacturers in the country use soybeans because of its high nutritional value. Soya bean is also processed into flour and its oil is used in the local paint, cosmetics, and soap making industries.

 

Direct human consumption of soya beans and its usage as animal feeds are also very significant in Nigeria, especially among rural low-income groups that cannot really afford animal protein sources such as meat, fish and eggs.

 

Seyi Gbadamosi, chief executive, Royal Farm Produce/researcher affirmed that there is an all year round demand for soya bean. Gbadamosi said, “After sorghum, soya bean is the most profitable grains to invest in, whether the investor wants to grow it or trade in it. Processing or reprocessing it for the industrial market is also highly profitable. In fact, the profit from processed soya beans is higher.”

 

Constraints Involved

So, despite this steady increase, domestic output continues to lag behind rising demand. Higher production is constrained by low yield levels resulting from the high cost of seeds and scarcity of superphosphate fertilizers. Average yield levels are approximately 1.2 metric tons per hectare. Soya beans are produced on smallholder farms averaging no more than one hectare as a result it is non-mechanised. So, investors that want to produce sufficient quantities would have to do mechanised farming.

 

Cultivation of Soya Bean

In Nigeria soya bean cultivation starts in May/June with land clearing, and harvesting normally occurs in late October through November every year. The crop is harvested three to four months after planting, depending on the time of sowing and seed variety. Benue state is the dominant soybean producing area but several other states in the north, middle belt do produce soya bean. States in the Southwest and Southeast can also produce soya bean when rains have reduced significantly.

 

Other issues

Apart from industrial demand, the insurgency in the Northern states also contributed to the huge shortfall in domestic supply of soya. Though insurgency is receding, many of the displaced persons have not yet fully resettled to go back into massive production of the commodity.

 

Credit: Oluyinka Alawode (BusinessDay)

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