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Coffee consumption in Nigeria rising on middle class expansion

by JOSEPHINE OKOJIE

November 15, 2017 | 1:30 am
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Nigeria’s coffee consumption is expected to grow by 23 percent within the next three years, as rising incomes and an expanding middle class spur demand.
Euromonitor International in 2016 predicted that Nigerians will drink more than 1,000 tons of coffee in 2020, which is percent higher than previous projections for the country.
“A lot of people are now consuming coffee. I make about N1, 500 to N3, 000 daily from the sale of instant hot coffee drink at N50 per cup,” said Dusi Abayomi, a push-cart instant coffee retailer at Ojuelegba market.
“We sell more during raining season. My sales have continued to increase daily since I started this business in 2014,” Abayomi said.
Nigeria’s sophisticated growing middle-class and young population constitute about 40 percent of the country’s 190 million people, who are developing huge taste for coffee products.
The urban population is estimated at 48.6 percent, according to the World Bank.
Currently, there are a lot of coffee products in the Nigerian market ranging from instant hot coffee drinks to sweets and biscuits with coffee flavours.
“Consumption of coffee has been on the rise in recent years because of our growing middle class and young population but there is still no market for coffee in Nigeria because the country’s coffee is of low quality and that is why the local industries using it as raw materials are not buying from farmers,” Hassan Usman, secretary general, National Coffee and Tea Association of Nigeria and a coffee farmer at Mambila Plateau in Taraba State told BusinessDay in a telephone interview.
“Our method of harvesting coffee is very poor. Farmers need a lot of training on good farming practices. There is no value chain for coffee and tea production in the country and majority of our coffee trees are old,” Usman said.
He stated that the country can generate huge revenue from coffee production when adequate support is provided to farmers in terms of inputs and training, saying that coffee remains the second most sought after commodity besides oil globally.
But years of neglect by the government for coffee production and a shrinking market have forced many farmers to abandon growing the crop.
Nigeria’s coffee production which peaked in 1964 has been on a steady decline since 2000, producing 2,375 tons of unroasted coffee in 2014 with an average yield of 1.5 metric ton per hectare, according to the latest data from the Food and Agricultural Organisation (FAO).
In 2015, Nigeria recorded no export of coffee between January and July 2015, at a point Ethiopia, an African country with fewer than 100 million people, produced 174,000 tons of coffee, earning $1 billion from export.
Brazil, with about Nigeria’s population (200 m people) earned $5.6 billion the same year while Colombia and Vietnam made $2.6 billion and $2.4 billion respectively the same year.
Taraba coffee farmer, Usman Ganduje, told BusinessDay that Nigeria has a lot of potential in coffee and can produce up to 10,000 tons per annum if provided with cheap funds and adequate market information.
“Others from Vietnam and even Kenya are seeing coffee exports rise because they have incentives. If we had been serious, we would have earned a lot of dollars from coffee,” Ganduje said.
“We need support, and we also need to access the market ourselves, because what we have is that traders come in and buy directly from farmers who do not have the capacity and funds to explore the global market,” he said.
Currently, Nestle Nigeria is the major player in the country’s coffee industry, occupying a market share of 76 percent, Euromonitor says.
According to the International Coffee Organisation (ICO), world coffee consumption is estimated to have a stable demand at 155.06 million bags while production is 157.42 million bags.
As at the time of writing the price of Robusta, Colombian and Arabica species are above $100 per 50 kg bag.

 

JOSEPHINE OKOJIE

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by JOSEPHINE OKOJIE

November 15, 2017 | 1:30 am
  |     |     |   Start Conversation

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