Nigeria To Import 2.9m Tons of Raw Sugar.

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Nigeria will import 2.9 million metric tons of sugar in 2017 to meet the high demand in the country’s bottled soda industry.

Despite the incentives offered by the Federal Government to boost local production, the current domestic supply has not met the rising demand as local production stands at 70,000 metric tons yearly due to poor infrastructure and high cost of production compared to imported brown sugar.

According to the National Sugar Development Council (NSDC), the country would depend on refined imported raw brown sugar from Brazil worth over $500 million annually till 2020.

Statistics obtained by New Telegraph from Index Mundi, a data portal that gathers facts and statistics on imports revealed that some importers had booked for 1,430,000 for 2017.

However, the portal revealed that the 2017 import would decline by 40,000 tons or 2.72 per cent due to forex.

In 2016, Nigeria took delivery of 1.47 million metric tons of sugar through the seaports. The imports were 0.34 per cent higher than the 1.46 million metric tons shipped into the country in 2015 due to the growing demand by the bottled soda industry.

Currently, the price of the commodity is $470 per metric ton. Sugar consumption in the country has grown 27 per cent to reach 1.7 million tons. Importation of the commodity was $585.5 million in the first six months of 2016.

It was learnt that half of the imported raw brown sugar valued at $500 million was imported from Brazil between January and June, 2016.

The National Sugar Development Council report said that Nigeria needs $1.238 billion to meet 49 per cent of the total sugar demand by 2020.

According to Global Agricultural Information Network (GAIN)’s report, Nigeria’s sugar importation dropped from 1.6 million metric tons to 1.25 million metric tons in the first six months of 2016.

It was learnt that importers had been facing the challenge of securing foreign exchange to ship the commodity to the country due to the Central Bank of Nigeria (CBN)’s policy on forex.

Sugar is among the 41 items banned last year by the apex bank from accessing foreign exchange from official market.

According to the Nigeria Sugar Master Plan, it was learnt that about 250,000 hectares of land would be needed for sugarcane cultivation in the next 10 years to meet the country’s demand.

Flour Mills of Nigeria, BUA Group and Dangote Group are the country’s three main sugar players.
However, Dangote Sugar remains the largest producer of the commodity with its 70 per cent market share.

Already, government has revised the sugar tariff structure to boost domestic raw sugar production and, by extension, employment, by offering a zero per cent import duty on machinery and spare parts for local sugar manufacturing firms.
Also, it has offered a five-year tax holiday for investors in the sugar value chain; 10 per cent import duty and 50 per cent levy on imported raw sugar; 20 per cent duty and 60 per cent levy for imported refined sugar.

In addition, a three-year concessionary tariff of five per cent import duty and five per cent levy on imported raw sugar were imposed between 2013 and 2015 on the refineries, which signed-on to Federal Government’s Backward Integration Programme (BIP).

But study by the National Sugar Development Council (NSDC) had revealed that the country would need $1.238 billion to meet 49 per cent or 860,000 metric tons of the total sugar demand by 2020.

Source: Newtelegraphonline