source: Google search
The potentials of this maize and Soya-beans is very high because they are essential commodities needed by all classes of people. They are needed as food by Nigerians and are also needed in large quantities for animal feed production. The demand for this commodities by both man and animals makes it a very important trade item. At harvest time, the prices of both commodities are very low and supply is in excess of demand but in June of the following year, demand is in excess of making the commodities very expensive. Considering the fact that government reserves has seriously been depleted, farm lands were ravished by flood in 2012/2013 meaning that we may very likely experience high sentiment by farmers as regards planting because of fear of loss due to flood predictions for 2014 by the Nigeria Meteorological Agency and the encouragement by government through Agricultural Loan Schemes, I make bold to say that storage and resale of maize and soya-beans will be very viable in 2018 and 2019.
source: Google search
Market for Maize and Soya-beans
Other than individual buyers who use the product for food and beverages, industrial buyers also need the products for the manufacturing of alcoholic and non-alcoholic drinks, food supplements as well as animal feed. These industrial buyers who are in high demand of these products are:
- Nigeria Breweries (NB Plc)
- National Food Reserve Agency (NFRA)
- Nestle Foods
- Honey Well
- USAID Markets
- World Food Programme (WFP)
- Maita Mills
- AkwaIbom State Government
- Lagos State Government
- River State Government
- Grand Cereals
- Falke Nig Ltd
- Crown Flour Mills
- Top Feeds
- Livestock Feeds Ltd
FINANCIAL FEASIBILITY OF VENTURING INTO MAIZE AND SOYA-BEANS STORAGE BUSINESS
Note: mt = metric tonne
Purchase:
Maize 30 mt (1 truck) x N40,000/mt (N400/bag of 100kg) x 30mt 1,200,000
Soya Beans 30 (1 truck) x N45,000/mt (N4500/bag of 100kg) x 30mt 1,350,000
2,550,000
Carriage &Off loading
N100/bag x 600 bags (N1000 pmt x 60mt) = 60,000
Storage chemicals
N100 per 20 tons (200 bags) = 3,000
Warehouse (rentage value) = 100,000
Required initial investment = 2,713,000
Sales Analysis
Prices differ from time to time. Between June, July and August, prices are at peak sometimes appreciating up to N8,400 for maize and N10,500 for Soya-beans:
Sales of soya-beans - 300 bags x N10,000 =3,000,000
Sales of maize - 300 bags x N8,000 =2,400,000
Less sales expense (2% of sales amount)
(108,000)
Sales Proceed
N5,292,000
Less expenses or investment cost
N2,713,000
Net profit
N2,579,000
Reasons Why You Should Invest In Commodities
The Nigerian market offers significant advantages to potential investors in Agric-business. It is characterized with abundant resources. Raw materials are enormous most of which are yet to be fully exploited. We can easily source raw materials at affordable prices. The existence of large market offers another advantage. Agric- industry presents a large market which is currently under served. It is being speculated that the country may experience food shortage in the near future. This makes agric business a viable venture. Other than above, our political environment is much more stable, there is unrestricted movement of investment funds, exchange control regulations has been liberalized giving room for multiple source of business fund, government has put a lot of incentives to attract potential ago-preneurs. Further to the above, cost of labor is very cheap in Nigeria, there is rapid development of physical and industrial infrastructure in terms of electricity, communication and transportation and finally, there is a well developed banking and financial sector. Working capital and other credit facilities can easily be sourced.