(Bloomberg) -- Chinese importers seeking alternative sources of sorghum as risks of a trade spat with the U.S. linger are finding Nigeria, the world’s second-largest producer, unable to fill the gap as violence in producing regions leave fields idle.
Sorghum is a drought-resistant grain used in the food and brewing industry as well as livestock feed and a staple in parts of the world.
“The trade war opens up an opportunity for us to export to China,” Muda Yusuf, head of the Lagos Chamber of Commerce and Industry, said in a phone interview from Nigeria’s commercial capital. “I don’t think Nigeria is able to take it as our capacity is dwindling because of all the security problems we have in our agricultural belt.”
Nigeria produced 6.5 million metric tons of sorghum in 2017, second only to the U.S. which had output of more than 8 million tons, according to the U.S. Department of Agriculture. Nigeria’s Agriculture Ministry puts annual output at 11 million tons, which it says isn’t enough for local demand of 12.5 million tons, raising questions about the capacity to export.
Buyers from China began making inquiries from Nigerian suppliers even before retaliatory tariffs with the U.S. set in. China imposed a tariff of 179 percent on imports of U.S. sorghum in April after starting an anti-dumping and anti-subsidy investigation in February. It recently announced it was suspending the measure as the two countries seek to resolve their trade dispute.
The area planted with sorghum in Nigeria will decline 3 percent in 2018 to 5.2 million hectares (12.8 million acres) due to the resurgence of attacks by Boko Haram Islamist militants in major producing areas, according to the USDA. Fighting has also intensified this year between herders and farmers over grazing land across much of central Nigeria, displacing hundreds of thousands of farmers, many of whom grow sorghum and other grains.
China is the world’s largest sorghum market and the threats of a trade war with the U.S. have provided sorghum-producing countries the opportunity to gain from the dispute between the world’s two biggest economies.
Nigeria, which suffered its worst economic contraction in 25 years in 2016 after oil prices collapsed, is seeking to diversify its crude-dependent economy by boosting agricultural exports.
To contact the reporter on this story: Ruth Olurounbi in Abuja at firstname.lastname@example.org
To contact the editors responsible for this story: Sophie Mongalvy at email@example.com, Dulue Mbachu, Michael Gunn, Antony Sguazzin
©2018 Bloomberg L.P.