An Assessment of the Nigerian Poultry Sector

The Nigerian poultry industry is estimated at ₦80 billion ($600 million) and is comprised of approximately 165 million birds, which pro-duced 650,000 MT of eggs and 290,000 MT of poultry meat in 2013. From a market size perspective, Nigeria’s egg production is the largest in Africa (South Africa is the next larg-est at 540,000 MT of eggs) and it has the 2nd largest chicken population after South Africa’s 200 million birds.

Chicken importation (with the exception of day-old-chicks) was banned by Nigeria in 2003, which spurred growth in domestic poultry production. Statistics from Eurostat, however, high-light that between 2009 and 2011 over 3 million MT worth of poultry products were imported into the Republic of Benin, with the preponderance of these products ending up in the Nigerian market. If this is reflected in overall assumptions, estimated poultry meat consumption in Nigeria is approximately 1.2 million MT.

This smuggled chicken costs about ₦500- ₦700 ($2.50-$3.50) per kg while locally produced frozen chicken costs between ₦1,000- ₦1,300 ($5 – $6.50) at retail locations, and approximately ₦650 ($3.25) at the farm gate. The price differential between imported and locally produced poultry is driven pri-marily by the high cost of maize and soybeans in Nigeria, and wide fluctuations in these commodity prices during the year. In 2013 in particular, high maize prices impacted margins of both poultry and animal feed companies, while the 1st Half 2015 has seen the sector squeezed by a combination of high soybean prices (~N150,000/MT in May versus ~N90,000/MT during the same period in 2014) and inci-dences of Avian Flu. Even with these challenges, analysts have projected a 20% annual growth in the poultry industry between 2010-2020 driven by Nigeria’s large population and rapidly growing middle class.

The Nigerian poultry sector is extremely fragmented with most of the chicken raised in ‘backyards’ or on poultry farms with less than 1,000 birds. However, there are a number of large commercial players in the sector most of whom are located in south-western Nigeria, in close proximity to Lagos and its large market of 17.5 million people.

June 1, 2015
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