People will always require food as long as life persists. Food will always possess a portion of one’s income, regardless of how small it is, and even if there is no food to buy, people will produce their own food to eat in order to survive.
Food insecurity has unfortunately been on the rise in Nigeria. The Food and Agriculture Organization (FAO) anticipated that 7 million Nigerians will face food shortages between June and August this year, as 16 northern states and the Federal Capital Territory (FCT) have been classified as facing food and nutrition crises.
However, recent events indicate that the food crisis will worsen, as the cost of manufacturing is expected to rise dramatically in the next 6 to 9 months, affecting every Nigerian. This is why: Covid-19.
Covid-19, the current global epidemic, has thrown life as we know it into disarray. These disturbances have also been seen in the agricultural economy, resulting in worldwide food shortages. Many countries were obliged to close their borders as a result of the lockdown, preventing movement. Because domestic production cannot meet the demands of the country’s more than 200 million inhabitants, imported food has become necessary.
Farmers’ credit access has been restricted, farmers’ access to inputs has been restricted, farmers’ access to transportation services to carry produce has been constrained, and so on. This has reverberated through food production and transportation, resulting in an increase in food prices. As a result, the United Nations World Food Program (UNWFP) has warned that by the conclusion of the epidemic, the number of people facing food insecurity may have doubled.
The biggest input supplier temporarily shut down
Indorama Fertilizer & Petrochemical Ltd is the world’s largest single-train producer of urea, a highly sought-after fertiliser brand. However, the company only told to its clients last week that it had temporarily stopped down due to Covid-19-related difficulties. The company’s closure will exacerbate the existing issues in the Agro environment, as it is a key input demand for farmers across the country.
As a result, Agro dealers, or those who sell retail inputs, will be unable to sell these inputs on a big scale and may be forced to seek input from smaller suppliers. Prices will, without a doubt, rise considerably higher. Because input prices are high, even packaged food goods like cereals will have a high cost of manufacture, necessitating an increase in food prices.
The supply chain disruption caused by the Covid-19 epidemic, as well as the following lockdown, are additional obstacles. Food marketing has been regulated in the same way that travel has been restricted.
Those who have these inputs will want to sell them at the highest prices possible, and they will hoard inputs to do so. Farming will be reduced as a result of these, as will food supplies. People will have money yet be unable to find the food they require as a result of the lower supply.
Transport companies that transport perishables such as tomatoes are also impacted. For example, travels that used to take 17 hours now take up to three days, with many perishables spoiling on the way. Food prices will rise as a result of Indorama’s temporary shutdown, as farmers will find it more expensive to acquire fertiliser, and production will fall, resulting in food scarcity. Within the following 6–9 months, the cost of production could double.
Even as we prepare for the potential consequences, the reduced supply creates an opportunity for Agro investors. Because of the increased demand for already strong demand for food, now is the perfect moment to invest in the business.
The benefits are infinite because they will not only benefit the enterprises involved, but they will also solve a huge problem and revitalise the economy as a whole.