• Friday, July 12, 2024
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BusinessDay

Explainer: How recent floods will impact price of a bag of rice

Relief for households as rice price drops 20%

The floods sweeping through many parts of Nigeria have taken a huge toll on some rice farms.

Thousands of hectares of rice farms in Taraba, Jigawa, Kano, Benue, Niger, Kogi, and Kebbi, among other states, have been reportedly washed away.

“Though the impact of the flood on rice farms in Kebbi State is not as bad as we expected, as those who have their farms in areas not prone to flooding have been able to get good harvest, rice farms near River Niger have suffered a lot of damage,” said Muhammad Augie, former chairman of Rice Farmers Association of Nigeria, Kebbi State chapter.

Augie said the flooding will certainly impact rice prices negatively as Kano, Jigawa, Taraba, Niger, and many other states that are the hubs of rice production in the country had their farms badly affected.

“They will experience low harvests this year, which will then translate to high cost of rice,” he said.

The rising flood in Nasarawa State has wrecked and immersed the Olam Rice Farm, which is worth over $15 million.

The farm has lost over 4,500 hectares of cropping land, according to a statement issued by the company.

Ade Adefeko, vice president of Olam Nigeria Limited, while explaining the effect of the flooding on their rice farm and its ripple effect on the price of rice, said: “Well, with what happened on October 2, I will tell you that 25 percent of the crop for rice has been taken out. We should expect an increase in rice prices in December. Of course, that goes without saying, because the entire crop has been lost.”

Read also: Destruction as flood rages through Agege community

There are fears among stakeholders in the rice value chain that the flooding that is still wreaking havoc on rice farms in rice-producing areas will affect the harvest. The average Nigerian also fears that rice, the most common staple, may surge during the festive season.

Emeka, a wholesale rice seller at Boundary market, complained that just last week, local rice (50kg) was sold for N34,000 while foreign rice was sold for N38,000, but this week foreign rice is N40,000-N42,000 per (50kg) while local rice is N37,000-N39,000.

“The problem we are facing is explaining the jump in price to retailers and consumers,” he said.

The recent flooding in many parts of the country is expected to worsen the food inflation in the country, especially for major food staples such as rice.

The National Bureau of Statistics said food inflation accelerated in September for the seventh straight month to 23.34 percent, caused by increases in prices of bread and cereals, food products, potatoes, yam, and other tubers, as well as oil and fats.

In the months ahead, rice may be on the list of food items seen to be pushing up food inflation.