Nigeria’s rice imports from the Thai Rice Exporters Association (TREA), one of the largest rice exporters in the world, fell by 98.4% to 15 metric tonnes between January and July 2022, as against 957 metric tonnes imported during the corresponding period in 2021.
This information is according to data from TREAfor January to July 2022, as seen by Nairametrics.
During the review period, Nigeria’s rice imports from the association fell to the lowest level on record, even as rice importers spent less than a million Thai Baht. In the comparable period of 2021, Nigeria spent 15 million Thai Baht and a total of 30 million for the full year.
Nigeria’s rice importation has dropped significantly in recent years following measures by the Federal Government to reduce importation and improve local production.
An overview of historic data shows a sharp decline from 1.24 million MT of rice in 2014, 244,131MT in 2015, and 58,260MT in 2016. Rice importation has since maintained a downward trend to date. This followed the inclusion of rice in the 41 items not valid for foreign exchange from CBN’s Foreign Exchange Window.
A ban to increase local production
In 2015, the CBN on behalf of the Federal Government placed a ban on 41 imported items (rice included), from accessing foreign exchange from the official window. Also, the government banned the importation of rice through land borders and kept a hefty 70% tariff on imports coming through ports. These actions were taken all in a bid to discourage importation and encourage local production.
- In 2019, the federal government also ordered the closure of all land borders in the country, placing a ban on the movement of goods in and out of the country shores through the borders.
- As a result of the drive by the federal government to improve local production of rice, significant growth has been recorded in recent years, with local rice production estimated at 5.29 million MT in 2021, the highest annual rice harvest recorded by the African giant.
- However, a disproportionate increase in local consumption of rice has seen the supply deficit expand wider.
- According to data from the Organization for Economic Co-operation and Development, (OECD) together with the Food and Agriculture Organization of the United Nations (FAO), Nigeria consumed a total of 7.96 million MT of rice in 2021 against local production of 5.29 million MT, leaving a deficit of 2.66 million (MT).
Meanwhile, there have been reports of rice being smuggled into the country through land borders despite government efforts to clamp down on these illegal importations. The Senate Committee on Agriculture in 2021 noted that about 2 million metric tons of rice are being imported or smuggled into the country.
This was disclosed by the Vice Chairman of the Committee, Muhammad Enagi during a meeting of a multi-stakeholder group on rice council advocacy bill promotion.
A look at the level of rice imported by Benin Republic showed a sudden increase in 2016 after Nigeria’s import dropped and has remained above Nigeria’s numbers despite having a population less than 6% of Nigeria’s 216 million people. It has brought up questions about how a country with such little pupolation size is able to consume as much rice, except it is a medium used in smuggling into Nigeria.
Gains threatened by flooding
The gains recorded in the Nigerian rice processing industry are currently being threatened by the continuous flood incidence across the country, which has caused huge losses in rice harvest, submerging over $15 million worth of Olam’s rice farm.
Consequently, the price of domestic rice has surged to over N37,000 in major markets in Lagos State, with foreign rice already selling for an average of N40,000 as a result of the supply constraint amidst rising demand, especially considering the December festivities that is around the corner.
Nigeria is at risk of experiencing a food crisis, taking into consideration the importance of rice in Nigeria’s food value chain, and the continuous ban on the importation of foreign rice through land borders.
Nigerians are now panic-buying bags of rice in a bid to hedge against the possibility of an increase in the price of rice later in the year. According to Ibrahim Maigari Ahmadu, the Founder/CEO of agritech startup RiceAfrika Technologies, the price of rice could surge behond N40,000 towards the end of the year, given the rise in demand during period. (Nairametrics)
