• Tuesday, June 18, 2024
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Nigerian rice millers import paddy despite mega pyramids

10-year-old stored Thailand rice may find its way to Nigeria, Africa

Nigerian rice millers have said they are importing paddy from some neighbouring West African countries to keep their mills running, a development that runs counter to the claim by the Federal Government that the country has achieved self-sufficiency in the production of the grain.

President Muhammadu Buhari had in January unveiled 13 rice pyramids stacked with a total of about 1.2 million bags of paddy, which was described the largest ever globally.

Buhari said his administration’s ‘rice revolution’ had made the country attain food sufficiency.

Aminu Goronyo, president of the Rice Farmers Association of Nigeria, had in August 2021 claimed that the country had become self-sufficient in rice production.

BusinessDay learnt that the inability of some rice millers to get enough paddies had forced them to import from neighbouring countries.

“Some millers are importing from neighbouring countries to keep their mills running,” said an industry source who does not want to be named. “Our biggest challenge as millers is getting a sufficient supply of paddy for our mills.”

Rice production in Africa’s most populous country has increased significantly in the last four years, and mills have expanded from 10 in 2016, when the country kicked off its rice revolution, to 60 in 2021.

The industry milling capacity increased from 350,000 metric tonnes in 2015 to over 3 million metric tonnes in 2021, according to the United States Department of Agriculture (USDA) 2022 grain report on Nigeria.

According to the USDA report, a growing cross-border paddy trade is emerging across the West African region.

“Nigeria rice millers do source paddy rice from Benin and Burkina Faso,” it said.

Another industry source also confirmed that some millers were mopping up paddy across the country’s borders to sustain production.

“We don’t produce enough paddies. Our main rice season is in October and after that period, it is difficult to get enough rice paddies,” the source said. “There is so much hype about what we produce for political reasons. What we currently produce is not enough to meet millers’ demand.”

Nigeria has enough paddy, says CBN

The Central Bank of Nigeria (CBN), whose Anchor Borrowers Programme brought about the country’s rice revolution, has said the country is producing enough paddy for millers.

“We have enough rice paddy and I do not see any reason for imports. I do not know that that is happening, except if there’s smuggling; I cannot substantiate now because I do not have the records,” he told a BusinessDay reporter in Washington.

Rice is among the 41 items restricted from foreign exchange by the country’s central bank. To protect the country’s rice industry and spur industry growth, the government had imposed tariffs on the importation of rice into the country. The tariff varies, depending on the stage of the importer in the value chain.

A rice trader will pay an import duty of 10 percent and a levy of 50 percent while an integrated miller with a verified backward integration programme will pay an import duty of 10 percent and levy of 20 percent for importing rice paddy.

Nigeria is a signatory to the ECOWAS Common External Tariff (CET), but most trades in rice and other agricultural commodities across the region are done informally.

Read also: Fertiliser prices double in threat to Nigeria’s food security

‘Insecurity, climate change affecting rice production’

Africa’s biggest economy cultivated 8.2 million metric tons of rice paddy in 2020, according to the latest data from UN Food and Agricultural Organisation. The most recent reliable figures for production come from the USDA, which has projected that Nigeria’s rice production will reach five million tons in 2022, slightly above the 4.8 million tons it predicted last year.

“We have increased our rice production in recent years. The government has supported farmers but insecurity and climate change are still affecting production,” said Jonathan Joshua, chairman of African Rice Mill in Nasarawa State.

The insecurity challenge in the country has worsened in recent years, forcing farmers to abandon their farmlands for safety.

The surge in paddy prices is also piling more pressure on rice millers who are already contending with rising production costs amid a nearly three-fold jump in diesel prices.

The National Bureau of Statistics reported that the inflation rate rose to 15.9 percent in March from 15.7 percent in March, with core inflation accelerating at the fastest pace in four years.

“The price of a metric tonne of paddy has surged by 33 percent in a year. The price of paddy is very high now as harvesting is not on time again because of insecurity, so millers are trying to mop up whatever paddy they find,” said Joshua, who is also the national president of the Association of Small-Scale Agro Producers in Nigeria.

“A metric tonne of paddy now sells for N240,000 as against N160,000 sold last year. You can see the sharp rise in paddy prices, and prices of diesel are also rising fast,” he added.