Rice Importers Anticipate Price Crash

bags of rice
  • Rice Importers Anticipate Price Crash

Prices of rice in Benin Republic have crashed to as low as N11,000 a bag owing to Nigeria’s ban on importation of rice through the land borders, investigation by our correspondent has shown.

There are also fears that the nation’s ports may soon be facing congestion as all imports will now be directed to the seaports.

Our correspondent learnt from a source in Seme that many ships carrying the product had landed at the Cotonou port, facing low demand. This has reportedly made the importers to decide to sell at low prices.

“Those who imported the rice cannot take them back and they are trying to sell at the minimal price,” the source said.

It was gathered that due to increasing pressure from the Nigeria Customs Service, dealers had started to shun Cotonou rice.

Although the ban on imported rice will take effect in January 2017, the NCS had been raiding markets and seizing the product.

Also, the renewed focus on local rice by the Federal Government and the major rice producing states in Nigeria had positioned the product as one whose price would soon witness a downward movement.

Ebonyi State Government recently placed a ban on imported rice. And according to the Commissioner for Information, Emma Onwe, the state currently produces enough rice to feed its populace.

Apart from Ebonyi, Lagos State has also finalised plans to make local rice from Kebbi State available to Lagos residents at a subsidised price of N13,000 per 50kg bag.

But some dealers have anticipated a further crash in prices with competition between the Cotonou rice and LAKE (Lagos Kebbi) rice.

But there are fears that the situation may lead to port congestion since all rice imports will now be directed to the seaports.

But Nigerian Ports Authority faulted the argument, saying it would only boost the port operation currently ‘dry’ due to low imports.

Speaking in an interview with our correspondent, the General Manager, Public Affairs, NPA, Chief Michael Ajayi, said, “There will be no congestion. They are banning importation of rice through the land borders; they are also banning vehicles through the land borders. Go to the car parks, they are empty. SIFAX Port and Cargo has constructed a terminal for vehicles and spent billions of naira but the place is empty and Nigerians are supposed to work there.

“There can never be congestion because every terminal is running a race to meet its gross registered tonnage. If they meet the GRT, they enjoy some credit and if they do not, they are penalised.”

Ajayi said that the government had improved the clearing system at the ports and there had been a reduction in time spent on cargo and ship loading.

According to him, Vice-President Yemi Osinbajo is heading a committee to ensure that all bureaucracies concerning clearance of goods are properly structured.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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