Trade Service Encourages Nigerian Flour Millers to Invest in U.S. Wheat
U.S. Wheat Associates (USW) has developed a strong relationship with Nigerian flour millers over many years through in-person service and many customer visits to the United States (see photo above). Yet the price of imported wheat is always a concern for these experienced customers serving a growing wheat market.
That is why USW’s regional Sub-Sahara African team based in Cape Town, South Africa, invested funding from USDA Foreign Agricultural Service programs to give Nigerian flour millers an early look at a potentially bullish market and a chance to purchase increased volumes of U.S. wheat before prices moved higher.
Having experienced how effective virtual meetings could be at reaching a wider audience, USW/Cape Town planned a series of online meetings for Nigerian flour millers and customers from other Sub-Sahara African countries.
A Correct Observation
In virtual meetings in February and April 2021, wheat market analyst Mike Krueger reviewed market fundamentals for millers. Citing a tight U.S. corn market outlook, the relatively low U.S. wheat planted area, and potential issues from Russian trade policies, Krueger suggested to the 20 Nigerian participants that wheat prices would increase up to the new crop harvest – an observation that the market confirmed.
Prices to Rise. This chart presented by market analyst Mike Krueger during a February 2021 webinar for Nigerian flour millers provides supporting data for Krueger’s expectation that U.S. wheat prices would increase into 2021/22. Millers were able to take advantage of this information provided by USW.
In June, USW/Cape Town collaborated with Kansas and Nebraska wheat commissions and U.S. hard red winter (HRW) and hard white (HW) wheat traders to share real-time crop and price conditions including from U.S. wheat farmers to 20 Nigerian participants. And the team held a soft red winter (SRW) crop update webinar in late July 2021, including presentations by the Ohio Small Grains Checkoff, past USW Chairman Jason Scott, a SRW grower from Maryland. USW Regional Director Chad Weigand also updated the 10 Nigerian flour miller participants on the global wheat market situation.
The USW Sub-Saharan Africa team also encouraged customers to participate in a monthly “Creating Value for U.S. Wheat” webinar series featuring USW milling and baking experts. In August 2021, one of those webinars focused on using solvent retention capacity analysis to help millers produce a wider range of high-quality flour products for wheat food producers. In total, 65 Nigerian flour millers participated in all seven of the online seminars.
Crop Quality Webinars
In October, USW/Cape Town conducted individual Crop Quality webinars with the five largest Nigerian flour millers and a multi-company webinar for remaining mills in Nigeria and the region, reaching about 50 flour milling representatives.
Armed with the early information about the potential for rising wheat prices and regular, online updates from USW, customers in Nigeria had purchased 58% more U.S. wheat in 2021/22 as of Dec. 16, 2021, compared to the same time the year before. Total imports include HRW, SRW, HW and hard red spring (HRS).
