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Paddy rice price drops on reopened Nigeria-Niger border

24 April 2024

The price of paddy rice in Africa’s most populous nation has declined by a third over the past two months after the reopening of the Nigeria-Niger land border, a significant boost for struggling millers.

Millers are importing cheaper paddies from neighbouring countries to run their mills, thereby driving prices down, according to industry sources who expect a further decline when the harvest season kicks off in two months.

Prices of paddy have declined from a record high of N625,000 per metric ton on average in February to N425,000 in April, BusinessDay’s market survey shows.

The decline has also led to a decrease in the prices of locally-milled parboiled rice varieties as a 50kg bag now sells for N70,000 as against N80,000 it sold two months ago, indicating a 12.5 percent decrease over the period.

The average price of a 50kg bag of foreign parboiled rice has dropped 17.5 percent over the period on stronger naira.

A BusinessDay survey in major rice markets in Lagos shows that 50kg of any foreign brand sells between N63,000 and N65,000 depending on the brand and size of the grains as against N75,000 and N80,000 sold in February.

“Some mills that shut down production owing to the scarcity of paddy last year are now reopening as they can easily source paddy from neighbouring countries owing to the reopening of the Nigeria-Niger borders,” said Jonathan Joshua, chairman at African Rice Mill in Nasarawa said.
“We are expecting the prices of paddy to drop further when farmers commence harvesting in two months,” Joshua, who is also the national president of the Association of Small-Scale Agro Producers in Nigeria, said.

On March 13, 2024, Nigeria reopened its land borders with Niger after seven months of sanctions on the country’s military junta, a move that revived the cross-border trade between both countries especially in agricultural products.

“We get paddies from Burkina Faso, Mali, and Niger and they all come through our land borders with Niger,” said an industry source who did not want to be named.

According to the source, prices of rice jumped after the Nigerian government announced the sanction on Niger and scarcity of paddy rock mills as millers were unable to import or get enough locally for their factories.

He noted that the situation caused prices of paddy to surge, noting that the reopening has brought relief to the country’s struggling milling industry.

“If you observe the price trend, you will notice that the spike in rice prices started in September and October last year after the border with Niger was closed,” he added.

In line with his statement, BusinessDay reported in November 2024 that millers requested a trade pact with India to import two million metric tons of rice to help stabilize surging prices of the grain locally when President Tinubu visited the country last year.

The millers requested for a trade pact after they scrambled for paddy amid a worsening shortage that was sending prices to record levels.

“We do not have enough paddies for millers in the country despite the success recorded under the Anchor Borrowers scheme,” the industry source noted.

According to the Rice Processors Association of Nigeria (RIPAN), Nigeria needs 11 million metric tons of paddies to meet 6 million metric tons of domestic consumption per annum but produces about 4.8 million metric tonnes of paddy which gives 2.64 million metric tonnes of rice.

The country’s rice milling industry has a processing capacity of 7.5 million metric tonnes, data from RIFAN shows. To keep the industry operating at full capacity, this leaves a present shortfall of 2.7 million metric tonnes of paddy for the subsector.

Nigeria still has a production shortfall in rice despite intervention programmes like the Anchor Borrowers Programme aimed at boosting local production, underscoring the challenges in achieving self-sufficiency.

Source : businessday