The low price tag put on Nigerian cassava chips
by China is frustrating Nigerian exporters of the commodity. This development
is impeding the successful execution of the cassava chip export contract
entered by Nigeria and China.
Chinese importers, it was learnt, are offering
Nigerian exporters $250 per tonne instead of $400 it goes for in Europe and
$350 in Israel. Business advisory services officials at the Bank of Agriculture
have advised Nigerian cassava chips exporters that if the contract price is
less than $400 per tonne, the business will not be viable.
Financial Vanguard gathered that the Bank of
Agriculture team suggested that exporters should explore European markets that
offer $400 or Israel that offers $350 as against China's $250 offering.
This aside, indications are also that the desire
of the Federal Government to develop a viable value chain in the agricultural
sector is being hampered by the current regime of interest rate of 22 per cent
among other factors.
They also said that high cost of internal
logistics (transportation), high cost of shipping, hurdles in documentations
with Customs, finance needed for capacity-building, are among the numerous
challenges facing value added production in the country.
Their situation, they said, is further worsened
by the activities of middlemen, cassava merchants, who buy from the farmers at
a cheap rate and sell to processors at a high rate pinning the cost
differential on high transportation cost from the farms to the factories.
These, they said, are some of the challenges
faced by cassava chips processors and exporters and the main reason why
Nigeria, after signing a contract with China to export 3.2 million metric
tonnes of cassava chips annually, is yet to execute the contract.
A cassava chips processor said that the offering
price of the Chinese with which the Federal Government signed a contract for
cassava chip export is a big issue, when compared with the Nigerian cassava raw
tuber price processing and exporting. BOA at the stakeholders' consultation
forum informed that if the contract price is less than $400 per ton, the
business will not be viable.
Source:
http://www.freshplaza.com/article/126708/Nigeria-Chinas-low-price-offering-threatens-cassava-business
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