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Price of rice surges, production declines

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By Abraham Adekunle

There is now a supply gap of about two million metric tons annually.

As outlined in the AFEX Wet Season Crop Production Report for 2023, the commodity’s price has surged significantly during the current year, resulting in a staggering rise of over 37 percent. Several rice traders in Nigeria claim that the ever-changing cost of their commodity greatly and adversely affects the operations of their businesses. “I don’t have much rice because of the increase in price,” says one rice dealer. “Sometimes I do get customers from various hotels but now I have lost most of my customers because of the increase.”

A second vendor concurs, affirming that a discernible contrast exists between the present moment and this exact juncture a year prior. Abdul Idris points out that the current issue lies in the absence of purchasers. Customers are no longer frequenting as they did in the past. He further observes that such a difficulty is primarily attributable to the inflated price, stating that compared to the previous year when the bag cost N28,000, it now stands at N42,000. As a result, individuals are discontented with the expense.

Purchasing in moderation is now the common thing.

The price increase has driven certain customers to adjust their purchasing behaviours, with a notable shift towards buying reduced quantities of rice. Vera Abua, a customer, voices her concern, stating that the impact it has on her is significant. But it is not just her. A multitude of Nigerians are expressing their dissatisfaction with the surging price of rice, leading to a drastic change in their purchasing habits. By default, customers want to cut cost or reduce their purchasing units.

According to AFEX’s findings, rice consumption in Nigeria has witnessed a constant surge, mirroring the steady expansion within the rice industry. This rise in demand closely corresponds to the projected annual population growth rate of 2.6 percent, reaching an impressive two percent. The cause behind the 37 percent surge in prices so far this year can be attributed to a decline in production in 2022, brought about by the consequences of flooding during the rainy season in that particular year.

Rice production can be independently sustainable.

In 2015, Richard Ogundele, a specialist in agricultural business, observed that Nigeria’s rice production status has undergone a significant shift from self-sufficiency. To this day, the nation remains far from achieving its previous levels of rice production. Ogundele highlights that Nigeria successfully fulfilled 84 percent of its domestic requirements in 2016 by supplying roughly 5.4 million metric tonnes. However, numerous transformative events have occurred in the country since then. Firstly, the population has experienced significant growth, and secondly, the issue of insecurity has emerged as key challenges.

Inflation has greatly impacted the capability of small-scale farmers to produce, leading to a substantial increase in input prices of around 30-40 percent, according to his remarks. He further argues that Vietnam and China, with their doubled circle operations and significantly higher yield levels, cannot be compared to us as we merely operate one circle with low yields. The costs of inputs and the level of mechanization are significantly higher in comparison to Nigeria. Therefore, these obstacles persist, signifying that unless we address mechanization issues, utilize both seasons efficiently, and implement subsidies for certain expenses, we will continue to face difficulties associated with these variations.

Primary source of rice in the western region of Africa.

Ogundele points out the irony of Nigeria being the foremost producer of rice in West Africa, even though it still relies on importing the very same commodity. In 2023, the international market witnessed a significant surge in rice prices, marking the highest peak in almost twelve years. This escalation can be attributed mainly to the imposition of a ban on rice exports by India and the potential consequences of El Nino on crucial rice-producing areas. The price surge has been further accentuated due to factors like rain-induced disruptions, variations in quality, and the challenges faced during Vietnam’s summer-autumn harvest. According to AFEX, Nigeria has invested a staggering $15 billion in the last ten years to fulfil its growing demand for rice, despite its potential to become a leading rice-exporting nation.


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AN-Toni
Editor
2 months ago

Price of rice surges, production declines. – There is now a supply gap of about two million metric tons annually. – Express your point of view.

Taiwo
Member
2 months ago

Rice production decreases as its price rises. Currently, there is a two million metric tons per year supply shortfall. Our rice production is not reaching its full potential. Because of this, rice is becoming much more expensive. For this reason, we must give the agricultural sector our full focus as it develops.

Kazeem1
Member
2 months ago

The drop in rice output has resulted in higher prices for the grain. Increasing rice production can lower prices, as a low supply will drive up prices.Individuals can afford the exorbitant cost of rice.

Adeoye Adegoke
Member
2 months ago

Oh, that’s really concerning to hear about the surge in rice prices and the decline in production. With a supply gap of about two million metric tons annually, it’s clear that there are challenges in meeting the demand for rice in Nigeria. This situation can have a significant impact on the affordability and accessibility of such a staple food for many people. It’s important for the government and relevant stakeholders to address the factors contributing to this decline in production and work towards finding sustainable solutions. This may include supporting farmers with improved agricultural practices, providing access to quality seeds and fertilizers, and investing in irrigation systems to mitigate the impact of climate change. By boosting rice production and bridging the supply gap, we can ensure food security and affordability for all Nigerians.