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Paddy Rice Prices Decline Due To The Reopening Of The Nigeria-Niger Border


Published Date: May 06, 2024
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The price of paddy rice in Africa's most populous country has dropped by a third in the last two months following the reopening of the Nigeria-Niger land border, providing a significant boost to struggling millers. 

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Rice Pricing in the African Nation 

Industry sources claim that when the harvest season begins in two months, prices will drop even more because millers are importing less expensive paddies from nearby nations to run their mills. 

According to BusinessDay's market survey, the average price of paddy dropped from a record high of N625,000 per metric ton in February to N425,000 in April. 

Locally milled parboiled rice varieties have also seen a drop in price as a result of the decline; a 50kg bag now sells for N70,000, down from N80,000 two months ago, a 12.5% decrease. 

During the period, the average cost of a 50kg bag of foreign parboiled rice decreased by 17.5% due to the stronger naira. 

According to a BusinessDay survey conducted in major rice markets in Lagos, 50kg of any foreign brand sells for between N63,000 and N65,000, depending on the brand and grain size, compared to between N75,000 and N80,000 during February.

Rice Procurement In Africa 

After seven months of sanctions against the military junta in Niger, Nigeria reopened its land borders with that country on March 13, 2024. This action rekindled cross-border trade, particularly in agricultural products. 

According to an unnamed industry source, "We get paddies from Burkina Faso, Mali, and Niger and they all come through our land borders with Niger." 

The source claimed that upon the announcement of the Nigerian government's sanctions against Niger and the shortage of paddy rock mills due to millers' inability to import or obtain enough locally for their factories, rice prices skyrocketed. 

He mentioned that the reopening has helped the nation's struggling milling industry and that the situation has caused paddy prices to soar. 

"If you look at the price trend, you will see that after the border with Niger was closed in September and October of last year, rice prices started to spike," he continued. 

Corresponding to his assertion, BusinessDay revealed in November 2024 that during President Tinubu's visit to India last year, millers asked for a trade pact to allow them to import 2 million metric tons of rice from India, which would help to stabilize the rising grains prices locally. 

Rice Consumption Requirements 

Nigeria needs 11 million metric tons of paddies to meet 6 million metric tons of domestic consumption annually, but the country only produces about 4.8 million metric tons of paddy, or 2.64 million metric tons of rice, according to the Rice Processors Association of Nigeria (RIPAN).

RIFAN data indicates that the nation's rice milling sector can process 7.5 million metric tonnes of rice annually. This means that the subsector currently needs 2.7 million metric tonnes of paddy to maintain the industry at full capacity. 

The challenges in achieving self-sufficiency are highlighted by the fact that Nigeria still lacks enough rice production, even with intervention programs like the Anchor Borrowers Programme designed to increase local production. 

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