Traders list causes of increase in rice price

CBN subsidiary laments huge govt expenditure on food importation

The price of rice has skyrocketed less than two months after the ban on its importation through the land border.

Meanwhile, officials of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), a subsidiary of the Central Bank of Nigeria (CBN) have said that the country spends about N25 billion on food importation daily.

NIRSAL also lamented that a total of about $623 million is spent yearly for catfish importation, saying that the nation is said to have about 71.2 million cultivable hectares of land.

The Executive Director, NIRSSAL Plc, Mr. Aro Afejide, made the disclosure at a workshop organised for bankers in Kaduna yesterday.

Lamenting over the importation bill, Afejide said that $623 million, $500 million and $4 billion are spent on dairy, sugar and wheat importation respectively.

According to him, another $2.2 billion and $2 billion are spent on cotton and rice importation yearly respectively.

Afejide stated that the capacity building workshop was organised because of lack of trust between the bankers and farmers.

The price of a bag of rice, which was N9,000, is now between N15,000 and N17,000.

It was gathered that the reason for this sharp increase is that some importers who have stockpiled rice in anticipation of the closure of land borders are now taking advantage of the ban by selling the hoarded product at very high prices. They allegedly had prior knowledge of the ban and obtained approved Form M since last year, which they were said to have used to stockpile the commodity massively.

Importation quota was allegedly given to some people on political grounds without any stake as rice millers or farmers.

As soon as the ban was announced, they took over the market with their brands of rice and started dictating the price to the detriment of the poor. Since then, the price of rice has risen astronomically. Rice retailers say it appears such few importers who had stockpiled rice and some Customs officers were working together to ensure that there is no other brand in the market.

An aggrieved seller said: “Whenever they see a brand that is different from theirs in the market, the Customs officers seize them from the traders. What they fail to realise is that some of us had other brands of rice in our shops before the ban. And we have to finish selling them before new ones.”

A trader said: “Now, traders are afraid to buy rice from distributors except it is the favoured brand for fear of their goods being impounded.”

Another trader, Dupe John, said: “Rice being Nigeria’s number one staple food, it is not good for a few people to monopolise the market, especially when we are yet to be self-sufficient in local production. Only one brand dominating the market is the reason we have artificial scarcity and high cost of rice due to shortfall in supply.

The ban on importation through land border is said to be encouraging undocumented cross-border rice trade.

Banning or control of rice importation is usually aimed at encouraging and boosting local production. However, local production has not been enough to meet the consumption demand of the rapidly-growing population. Therefore, there exists an imbalance between production and consumption.