agri09-overview-timothy prewitt usaid markets
TRANSCRIPT
Agenda
Global Financial Crisis, Implications for Africa
Commodity Price Fluctuation and Uncertainty
USAID Nigeria – MARKETS – Investment Opportunities – 11-May-09 - 1 -
Commodity Price Fluctuation and Uncertainty
Factors Which Influence Agricultural Growth
Opportunities in Current Economic Context
Re
al
GD
P G
row
th %
8
6
4
2
Africa
GDP Growth Rate: Africa V. OEDC Countries
Source: OECD Development Centre / African Development Bank, 2009
Re
al
GD
P G
row
th %
2
0
-2
-4
-6
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Total OECD
Source: OECDAfrican Economic Outlook, 2009
Graphic:African Development Bank
“The Rate of Return on Foreign Direct Investment is higher in Africa
than anywhere else in the developing world”
Food Commodity Prices
Source: International Monetary Fund
1996 1998 2000 2002 2004 2006 2007 2008Strong growth in demand, based on:
Increasing population + Rapid economic growth + Rising per capita meat consumption
Slowing growth in agricultural production
Commodity PricesIncreasing Complexity of Contributing Factors
5
Supply factors in green
Demand factors in brown
Source:
Ronald Trostle, ERS-USDA, WRS-0801, July 2008
1996 1998 2000 2002 2004 2006 2007 2008Strong growth in demand, based on:
Increasing population + Rapid economic growth + Rising per capita meat consumption
Slowing growth in agricultural production
Rapid expansion biofuels production
Declining stocks of food commodities
Escalating crude oil price
Commodity PricesIncreasing Complexity of Contributing Factors
6
Rapid expansion biofuels production
Dollar devaluation
Large foreign exchange reserves
Supply factors in green
Demand factors in brown
Source:
Ronald Trostle, ERS-USDA, WRS-0801, July 2008
1996 1998 2000 2002 2004 2006 2007 2008Strong growth in demand, based on:
Increasing population + Rapid economic growth + Rising per capita meat consumption
Slowing growth in agricultural production
Rapid expansion biofuels production
Declining stocks of food commodities
Escalating crude oil price
Commodity PricesIncreasing Complexity of Contributing Factors
7
Rapid expansion biofuels production
Dollar devaluation
Large foreign exchange reserves
Adverse weather
Exporter policies
Importer policies
Aggressive
purchases by
importers
Rising farm production costs
Supply factors in green
Demand factors in brown
Source:
Ronald Trostle, ERS-USDA, WRS-0801, July 2008
29% of US Corn Used for Ethanol
Source: USDA Agricultural Baseline Projections to 2017
3,76
5,85
3,5
4,5
5,5 Retail Gasoline: Regular Grade, ($/Gallon)
Corn: Number 2 Yellow, ($/bushel)
$ gal & $ /bu
Corn and Oil Connection?
3,76
0,5
1,5
2,5
3,5
1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006
Source: EIA.doe.gov and NASS
2008
Source: USDA
Rise of Middle Class to Almost 1 B by 2020
Source: Global Insights / USDA FAS
Most Rapidly Expanding
Middle Class PopulationsSource: Global Insights / USDA FAS
Source: USDA Agricultural Baseline Projections to 2017
Olam Nigeria Limited mill upgrades: $5.0 million
Commercial Credit for Smallholders: $4.2 million
Resources Leveraged
Aba Malting Plant, Abia State
Current capacity: 30,000 MT per annum
Currently processing sorghum from farmers throughout Nigeria
Aba Malting Plant
Convenient Home Foods
Durante Fish Industries
Ebony Industries
Ekha Agro
Agribusiness Partners
Ekha Agro
El Bhi
Grand Cereals
Magnum Associates
Matna Foods
Nigerian Starch Mills
Notore Chemical Industries
Olam Nigeria
Nigeria MARKETS AgTech and Investment Team
Timothy Prewitt, Managing Director
Niels Hanssens, Chief Technical Director
Alan Bright, Director of Operations
Godson Ononiwu, Director, Communications Group