Soybean demand to grow by 177,000 tonnes in the next decade

Nigeria’s demand for Soybean is projected to increase by 177,000 tonnes in the next ten years based on a document from the Organisation for Economic Co-operation and Development (OECD) and Food and Agriculture Organisation (FAO) of the United Nation Agricultural Outlook sighted by MSMEsToday. This implies that there is room for more Micro, Small and Medium Enterprise to invest in soybean production to meet the demand.

At the close of year 2020, Nigeria consumed 727,000 tonnes of soybean and this is projected to grow by 24.35% or 177,000 tonnes to 904,000 tonnes by the end of 2029 all things being equal. Further analysis revealed that Nigeria till end of the ten years under consideration would consume a total of about 17,700 tonnes annually.

Increase in the number of tonnes consumed in Nigeria simultaneously mean increase in household spending on soybean. Therefore, it is projected that consumers spending on soybean consumption will increase from N128.34 billion in 2020 to N157.28 billion by the end of 2029 using the international market prices of $292.3 per tonnes in 2020 and projected market price of  $386.6 by 2029 all things being equal. This is equivalent to consumer spending of about N3.08 billion on an annual basis.

This an huge opportunity for MSMEs as soybean on the global scale is regarded as one of the most predominantly grown and used oilseeds and its use ranges from human to animal production and manufacturing of industrial products. Better Health, a medical website noted that soybean is high in fibre, protein, saturated fat, cholesterol free, lactose free, a good source of antioxidants, high in phytoestrogens, contains all the essential amino acids, and offers the best dietary choice to reduce the risk of cardiovascular diseases.

MSMEs can also plug in to crush soybean, which is the processing of soybean-to-soybean meal and soybean oil. The crush spread is the difference between the value of soybean and its byproducts, and is considered a gauge of the potential profit margin for soybean processors.

In Nigeria, a total of 592,000 tonnes of soybean bushels was crushed in 2020, this represents about 81.43% of the total soybean consumed during the period. However, domestic crush is projected to increase to 674,000 tonnes, indicating a growth of about 13.85% in the next ten years and 77.56% of the projected soybean consumption for the next ten years.

Furthermore, the United States Department of Agriculture 2019/20 report estimates Nigeria’s soybean meal production to be 368,000 metric tonnes; soybean oil production stands at 83,000 metric tonnes; while soybean oilseed production is 700,000 metric tonnes. The total soybean value chain production is approximately 1.15 million metric tonnes, which positions Nigeria as the highest soybean producer in sub-Saharan Africa and 15th highest in the world.

In term of production, Soybean is largely produced in the middle belt region of Nigeria with Benue State as the major production hub, representing over 30 per cent of total production in the country. Other key producing states include Adamawa, Bauchi, Borno, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Nasarawa, Niger, Plateau, Sokoto, Taraba and Zamfara, states according to an International Institute of Tropical Agriculture (IITA) report.

A total of 683,000 tonnes of soybean was produced in 2020, accounting for 93% of the total soybean demand for the period and in the third quarter of the same period soybean worth N3 billion was exported to other countries. Notwithstanding, production is projected to increase by 26.50% to 864,000 tonnes in the next ten years as a result of growing demand from the poultry, livestock and edible oils industries.

Despite a steady increase recorded in the soybean production buoyed by a growing demand from the poultry, livestock and edible oils industries, Nigeria’s soybean production is hindered by several factors which include, low adoption and limited use of improved varieties by the local farmers, lack of access to mechanized farming or modern farming techniques that could effectively increase production, low agricultural extension systems, reliance on rain-fed agriculture, attack by pests leading to post-harvest losses, negative quality perceptions such as high presence of foreign matter, low oil content and excessive dryness, which affects exportation, as global buyers have to be convinced to overlook some of these parameters and inadequate funds to farmers that limits production capacity.

There is therefore need for both private sector and government intervention to engender improvement of soybean production. For example, the extension of the Anchor Borrowers’ Programme to the soybean sector would enable farmers facilitate the implementation of credit facilities, which would in turn, lead to large-scale production. Enlightening and training the local farmer on the operations and adoption of useful farming technologies and methodologies relating to soybean production to enhance productivity will be an action in the right direction.  Moreso, there is need for active participation of various governments, non-governmental organisations (NGOs) and private sector partners to jointly develop farmers support packages and agronomy programmes including training in good agricultural practices, to achieve a sustainable soybean development goal.

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