Why rice price will increase in Nigeria as FG crashes prices for Nigerians

• Rice importers in Nigeria are set to spend about N1.93 trillion on the commodity’s import for the rest of the year
• Experts believe that the move will cause another hike in the price of rice nationwide, despite the duty-free policy of the government
• Reports say that rice millers are lamenting the non-availability of premium rice brands, such as paddy rice, in the country

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Despite the Nigerian government suspending import duty on rice, importers are reportedly projected to pay about $1.3 billion (N1.95 trillion) to bring 2.2 million tonnes of rice into Nigeria between August and December 2024.

The rise in rice import is attributed to the Nigerian government’s failure to address concerns in the agricultural sector after spending billions of naira via various intervention schemes.

Rice importers raise alarm on import costs despite FG's policy Credit: Picture Alliance
Source: Getty Images

Import duty rises

Reports say import duty on grains rose from 50% in 2012 to 110% as of January 2023, primarily to discourage import and encourage local production, which stood at three million in 2012.

Findings show that the global rice shortage has worsened exports of premium varieties due to the rise in freight costs, foreign exchange rates and other attacks on commercial ships.

Also, the Thai Rice Export Association (TREA) disclosed that the price of parboiled rice rose from $501 per tonne to $593 on July 31, 2024.

According to reports, domestic production dipped by 37.4% or 3.1 million tonnes from 8.3 million to 5.2 million in two years.

Rice millers disclosed an inadequate commercial quantity of paddy rice in Nigeria, which was attributed to farmers’ withdrawal from farms due to insecurity.

Farmers lament inadequate production

Nigerian farmers say they could only meet 57% of the 6.5 million tonnes consumption demands.

The Deputy Chairman of the All Farmers Association of Nigeria (AFAN), Shakin Agbayewa, disclosed that rice sellers repackaged local rice as imported ones to sell at higher prices.

Recently, the Nigerian government announced that it created centres nationwide where Nigerians could purchase 50-kilogramme bags of rice for N40,000

The Minister of Information and National Orientation, Mohammed Idris, said the initiative aims to ease the hardship across the country,

He said:

FG crashes price of rice for Nigerians

Legit.ng earlier reported that the Nigerian government gave food importers a free pass to import food into the country. 

Nigeria’s Minister of Agriculture and Food Security, Abubakar Kyari, said the government approved about N2 trillion to tackle food inflation.

The minister stated that the government had also approved a 150-day duty-free import window for food commodities, which would allow the import of some commodities via land and sea borders under the programme. 

He outlined the implementation of President Bola Tinubu's Presidential Accelerated Stabilisation and Advancement Plan, a scheme to achieve food security and economic stability.

Reports say rice prices dropped in major markets in April this year, falling by 20-30 per cent within two months.

Findings showed that around some markets in Lagos, a 50kg bag of rice sold for between 50,000 and 65,000 in Oshodi, Ikotun, Ikorodu and other parts of the state.

However, in a twist of events, the commodity price skyrocketed to over N70,000, with importers blaming the crash on exchange rates.

Rice sellers announce changes

Legit.ng earlier reported that the price of parboiled rice dropped for the first time this year in April, which relieved families and reduced living standards across the country.

A market survey across Lagos and significant cities shows that in four months, the price of a 50kg bag of rice has decreased by 20%, from an average of N90,000 to N72,000.

Experts have attributed the staple's price drop to the rise in the value of the naira against the US dollar.

Source: Legit.ng