Home » Home Latest News from Nigeria » Rice imports drop by 53% as prices rise

Rice imports drop by 53% as prices rise

The volume of rice being imported into the country has dropped by 53 per cent in the last one month just as the price of the commodity has increased by over 20 per cent in the market, following the Central Bank of Nigeria’s decision to place rice among 41 items not valid for foreign exchange.

The CBN had last month warned banks and bureau de change operators against making available foreign exchange to importers of rice and 40 other items in a bid to conserve the hard earned forex and boost the production of those products.

Already, the decision is beginning to take a heavy toll on the importers of the affected items and the general business environment. In the case of rice, statistics from the Nigerian Ports Authority’s daily shipping position obtained on Friday revealed that out of 37 ships expected to berth at the seaport terminals between July 9 and August 1, rice was not included.

The ships carrying other food commodities and other products are expected to berth at the APM Terminals, Apapa Bulk Terminal, GDNL, ENL, Lister, among other port terminals.

It was gathered that since the beginning of the month, only one ship carrying about 34,000 metric tonnes of rice had berthed on July 2 at the ENL/GDNL Terminal.

But in May, the Lagos ports received a total of 71,630 metric tonnes of rice. The 34,000MT of rice for July, therefore, shows a decline of 52.5 per cent.

Our correspondent gathered that rice importers were finding it difficult to import the product due to high cost of buying dollars at the parallel market for business.

The value of naira had been depreciating for the past one month. And as of Thursday, the value of naira to dollar stood at N244.

The Afrinvest Research, in its foreign exchange market review of the past week, stated that importers of items banned from accessing foreign exchange at the official market had continued to scramble for hard currency in the parallel market.

It said, “We anticipate that the foreign exchange policies in Nigeria will affect local manufacturing companies that depend on the importation of some of the listed items for raw materials. This may further have some impact on growth rate and inflation in the third quarter of 2015.”

In its circular released on the June 23, the CBN explained that the move was to encourage the local production of the goods and sustain the stability of the forex market.

The CBN Governor, Mr. Godwin Emefiele, had threatened to sanction banks that flouted the directive and provided foreign exchange to importers of the banned products.

Findings by SUNDAY PUNCH from various markets in Lagos and other parts of the country on Friday showed that the price of rice had continued to rise with a 50kg bag of the product selling for a minimum of N8,500, compared with N7,000 it was being sold at the beginning of the year.

A trader at Daleko Market, a major rice market in Lagos, Mrs. Folashade Adeleke, said that the price of the food commodity had increased due to the persistent clampdown by the Nigeria Customs Service on smugglers from the land borders.

She said, “The Cotonou rice, which is smuggled into the country, is always cheaper and importers are forced to reduce their price in order to compete effectively. But since the border has been closed and customs officers are seizing the smuggled rice, the price of the product keeps increasing.”

Adeleke said although she was aware about the existence of locally produced paddy rice, only Ofada rice had been widely accepted and currently being sold in the market.

The immediate Minister of Agriculture, Dr. Akinwunmi Adesina, was reported to have said that local brands such as upland rice, lowland rice and fadama rice were available in Sokoto, Kebbi, Kano, Katsina, Niger and Kogi states.

The Food and Agricultural Organisation had predicted that Nigeria’s rice purchases would drop by 3.3 per cent from three million metric tonnes in 2014 to 2.9 million metric tonnes in 2015.






%d bloggers like this: