CBN’s Forex Restriction on Milk Importers: Milking the industry players?

CBN’s Forex Restriction on Milk Importers: Milking the industry players?

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Top 10 Most Expensive Universities In Nigeria

For many Nigerians, high-quality higher education is a luxury. There are many private universities who are known not only...

UNILAG Ranks 1st In Nigeria and 8th In Africa

The University of Lagos has been ranked 1st  in Nigeria and 8th in Africa, by uniRank University Ranking™, the leading...
- Advertisement -
- Advertisement -

Earlier, the Central Bank of Nigeria (CBN) published a circular, notifying all authorized foreign exchange (forex) dealers to grant only six companies (Nestle Nigeria Plc, Friesland Campina WAPCO Nigeria, Chi Ltd, TG Arla Dairy Product Ltd, Promasidor Nigeria Ltd, and Integrated Diaries Ltd.) access the CBN’s Form ‘M’ (a mandatory statutory document to be completed by all goods importers) for importation of Milk and its derivatives. Thus, barring other players from accessing forex for milk importations.

CBN’s Forex Restriction on Milk Importers: Milking the industry players?

This was not surprising as the CBN had muted the plan in Jul-19, after directing Deposit Money Banks (DMBs) to stop the processing of milk and its related products on ‘Bills for Collection basis’, which allowed the importer to buy on credit. Thus, providing the industry players some ample time to prepare for backward integration. Accordingly, the six companies are the companies that have keyed-in into the CBN’s backward integration program to enhance their capacity and improve local milk production.

Read:  Dano Milk Bags Guinness World Records Certificate

In our view, we believe the recent regulation will spur new opportunities for local farmers by opening new businesses around the dairy value chain. Additionally, for companies yet to start the implementation of a backward integration program, the new regulation will pressure their cost margins over the medium to long term, as this leaves them with no choice but to source FX from the less liquid parallel market.

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

11 PLC FY’19 – Lower Margins Weaken FY’19 Earnings

Revenue advances 16% y/y FY’19 rental income dips 7% y/y Records a PAT of ₦8.9 billion (-5% y/y) ...

FBN Holdings PLC FY’19 (Unaudited) Earnings – Bank Records 4% y/y Growth in Gross Earnings, PAT

Provisions moderate 52% y/y cost-to-income ratio remains above 70% 20% y/y jump in Opex drags profits High Opex erodes mild earnings gains FBNH released its...

Stanbic IBTC Holdings Plc FY’19 (Unaudited) Earnings – Bank Records Modest y/y Improvements

PAT beats estimate on lower Interest Expense Loan portfolio up 21% y/y, Deposits down 34% Opex declined 1% y/y to ₦71.6 billion (Estimate:...

Businesses to Flourish in Omishakin Community as Airtel Pledges to Provide Electricity after 13 years

The third episode of the award-winning television programme ‘Airtel Touching Lives’ is scheduled to air on the 16th of February on national and cable TV....
%d bloggers like this: