Foreign rice floods markets as costs squeeze local mills

…Imports from Thailand jump 60-fold in one year

…Over 50 small-scale millers shut down in 2024- RIMAN

The gains recorded in the Nigerian rice industry are fast fading as high production costs squeeze local millers, leaving room for foreign varieties to flood the markets across the nation.

Apart from the spiraling production costs, experts also attribute the influx of foreign rice to quality concerns of some local varieties as well as porous borders, especially in northern Nigeria.

Nigeria’s rice imports from Thailand surged 60-fold in one year, hitting 34,855 metric tons (MT) in 2024. This is the highest since 2017, according to data from the Thai Rice Exporters Association.

Data also show that Togo and Benin’s imports into Nigeria surged 175 percent and 105 percent to 144, 552 and 286,649 metric tons (MT) respectively in one year, with much of the rice smuggled into Nigeria through porous borders.

BusinessDay surveyed key rice markets across Lagos and found that more foreign parboiled varieties were on traders’ shelves than local brands.

Paddy rice isn’t enough

Peter Dama, national chairman of Rice Millers Association of Nigeria (RIMAN), said despite efforts by the government to promote domestic production, paddy output remains insufficient to meet the demand of millers.

“Rice millers cannot ramp up production and compete with cheaper imports with the high cost of paddy, energy costs and interest rates,” he said, noting that over 50 small-scale millers shut down operations last year.

He faulted the federal government’s duty-free import policy for rice exporters, noting that it might lead to the collapse of the local industry.

Nigeria needs 11 million MT of paddy to meet current domestic consumption but it produces about 4.8 million metric tons or 2.64 million metric tons of milled rice, according to the Rice Processors Association of Nigeria (RIPAN).

The association, in a 2023 snapshot report, said most millers had large unutilised capacity and hence huge overheads per unit of capacity utilised owing to macroeconomic challenges and scarcity of paddy that year.

Preference for foreign rice

Bashir Ismail, chief executive officer of Bashir Rice, said several millers, including Bashir Rice, shut down their operations in 2024 owing to paddy scarcity amid surging production costs.

“We have shut down our mill and we are now into the distribution of agro-inputs and commodities,” Ismail said. “Our rice cannot compete favourably with imported varieties and Nigerians still prefer to consume foreign rice than locally produced ones,” he noted.

According to him, the country’s rice production will decline with imported varieties filling the gap as the federal government cancelled the Anchor Borrowers Programme – a subsidy initiative for rice farmers.

“Our rice production has been declining and with the cancellation of the Anchor Borrowers Programme, it will drop further,” he noted.

Data from a new report by the United States Department of Agriculture on Nigeria’s rice production show that the country’s rice production declined by 6.7 percent in the 2024/2025 season to 5.23 million metric tons (MT) from 5.61 million MT in 2023/2024 season.

The data further indicate that the figure is the lowest the country has recorded since 2020 when the COVID-19 pandemic obstructed farming activities.

Chukwudi Ojinnaka, group managing director of Stine Rice, said most of the rice tagged as foreign in markets are local varieties rebranded as foreign owing to Nigerians’ high preference for foreign rice.