Agriculture | |
Agriculture | |
2569 VIEWS | |
![]() |
Friday, October 04, 2019 / 11:04 AM / CSL
Research / Header Image Credit: Yahoo
Since
Nigeria closed its land borders, the price of rice, a major staple in the
country has been on the rise. According to a report by Business Day Newspaper,
the price of a 50kg bag of imported rice, which was selling at N14,500 before
the closure of the border, now sells for N27,000. Locally produced rice has not
been left out of the party as the price of Lake rice (a product of an alliance
between Lagos State and Kebbi State) has increased 22% to N16,500 from N13,500
before the closure of the border.
According to data from the U.S.
Department of Agriculture (USDA) for August 2019, Nigeria, with average local
demand of 7.3 million metric tonnes (MT) per annum - versus average local
production of 4.9 million MT, is the world's third largest rice importer behind
China and the Philippines. Since 2011, the government has made substantial
efforts to encourage the domestic cultivation of rice and eliminate imports
using incentives such as subsidised loans, cheap fertilizer, free farm lands,
and tax rebates. The central bank has also initiated lending schemes such as
the Anchors Borrowers Programme (ABP) and Commercial Agriculture Credit Scheme
(CACS) to stimulate the planting and cultivation of local crops.
Though production has improved
and locally-grown rice is now available in many markets, supply still dwarfs
local demand. The decision to close the land borders has worsened the supply
situation, resulting in a steep increase in price as seen in the past few
weeks. Adding to the pressure of low supply, many dealers are said to be
hoarding the commodity with the intention of selling at increased prices during
the Christmas festivities.
Whilst hurting consumers, the
closure of the borders has been positive for local rice producers such as Olam
and indigenous companies such as Flour mills who produce spaghetti. Our chat
with a few consumers and retailers suggests that spaghetti is gradually
becoming an acceptable substitute for rice as a pack of sphaghetti that can
feed four average consumers sells for N220 while a derica (the local
measurement) of imported rice that feeds about 5 average consumers now sells
for N400.
1.
Border Closures May Only Offer
Temporary Subsidy Reprieve - CardinalStone Research,
October 11, 2019
2.
Effects of Closing The SEME
Border - Coronation Research,
October 15, 2019
Related News
1. Average
Price Of 1kg of Rice Increases By 0.14% MoM To N356.61 In August 2019
2. Dangote
Changes Strategy On Rice and Sugarcane; Delves Into Dairy Farming
3.
Growth In
Agriculture Remains Weak Despite Multiple Financing Schemes
4.
How Lagos And
Ondo States Drive Agric-Business Development
5.
Financing
Scaling For Nigeria's Smallholder Farmers
6.
Global Warming
And The Future Of The Palm Oil Industry
7. Agric. Minister
Urges Banks To Support Revival Of Agro-Allied Industries In Nigeria
8.
FirstBank
Spotlighting Opportunities in the Agriculture Value Chain
9.
Firstbank Agric
Expo Set To Promote New Agribusiness Opportunities
10. Fitch
Ratings Revises Global Fertiliser Price Assumptions