Rice costs more because it is still being imported in huge quantities despite efforts to boost local output
By Jeph Ajobaju, Chief Copy Editor
Some 13,342 bags of 50kg rice were confiscated in five weeks, the Nigeria Customs Service (NCS) Federal Operation Unit (FOU) Zone ‘A’ in Lagos announced on December 2 to underscore how consumers still rely on imports for the staple food.
Between January and April, the FOU seized 41,652 bags of smuggled rice from Idiroko and Ipokia in Ogun State. It intercepted a total 20,538 bags between March and April.
And because of that dependence on foreign rice, importers will pay N300 billion ($579. 75million) freight rates to shipping lines by the end of this year.
Importers expecting consignments from Thailand and other Asian countries are from Nigeria, Benin Republic, Togo, and Ghana. But much of what is imported to the other three countries end up in Nigeria through smuggling.
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Shift away from container to bulk shipment
Investigation by The Nation showed that in the first week of October, shipping lines imposed $150 per tonne of rice valued at $405 because of scarcity of containers.
Importers in Nigeria will pay $300 million for 2 million tonnes ordered, Benin $81 million (540,000 tonnes), Togo $56.25 million (375,000 tonnes), and Ghana $142.5million (950,000 tonnes), according to Thai Rice Exporters Association (TREA),
Sources at the Ministry of Finance in Abuja said the shift away from container to bulk shipment has affected the cost of rice imported to West Africa from Thailand, Singapore, India, and other Asian countries in the fourth quarter of the year (Q4 2021).
A bag of 25kg foreign rice now sells for between N29,000 (long grain) and N29,500 (small grain). A bag of local rice goes for between N22,000 and N25,000 depending on the quality, the brand, and the marketer.
Data compiled by Index Mundi, a global trade portal, showed that Nigeria imported 1.8 million tonnes – 28 per cent of local consumption – in 2020 as domestic production dropped from 5.04 million tonnes to 4.7 million tonnes.
Thai exporters have complained that container freight costs from Asia to West Africa are almost twice the levels of bulk shipping amid congested ports.
Thai exporters cut the price from $507 to $405 per bag in October to increase supply to West African buyers.
Efforts to raise local production
Nigeria’s plan to achieve self-sufficiency in rice production in 2022 may not be achieved as the country still depends on 1.8 million tonnes of smuggled rice from neighbouring countries to meet demand.
This is despite the agreement between Abuja and Cotonou to end rice smuggling to Nigeria.
The Nation reports that rice smuggling remains a big business as many Customs officers have lost their lives while combating smugglers at the porous borders.
Between late September and October three Customs officers were murdered in Ogun State by the smugglers.
Abuja has intensified efforts for a decade to encourage local rice cultivation through subsidised loans, cheap fertiliser, free farmland, and tax rebates, but some farmers have failed to repay loans to the Central Bank of Nigeria (CBN).
Niger State chapter of the Rice Farmers’ Association of Nigeria (RIFAN) confirmed that some farmers have been taken to court for defaulting on CBN loan repayment.
State RIFAN/CBN Special Project Coordinator Idris Makaranta said they were expected to return a certain amount of their harvest as loan repayment but failed to do so.
“From the 40,000 farmers, who participated in last season’s rice farming, we were supposed to recover between 300,000 and 400,000 bags of paddy rice but as we have only recovered about 100,000 bags,” he said.
“We have handed the defaulters over to court to recover our return for us while anyone who has brought more than 60 per cent of the returns would be considered for dry season farming.”
The federal government has made moves to attract N250 billion investment in rice production following plans to establish an additional 14 rice mills across the country.
However, efforts to boost domestic production are curtailed by smuggling.
Rice Processors Association of Nigeria (RIPAN) Nation Chairman, Mohammed Maifata, said smuggling will stop and the gap filled by local production if farmers receive full support from the government and patronage by Nigerians.
