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Nigerian Rice Industry Closedown, Price Increases as Indian Ban Rice Exports

Nigerian Rice Industry Closedown, Price Increases as Indian Ban Rice Exports

The Indian government’s decision in July to suspend exports of non-basmati rice is causing a cascade of effects that stretch far beyond its borders, particularly impacting West African nations like Nigeria.

Nigeria, among other West African countries, heavily relies on rice imports from India to fulfill its domestic demand. Despite notable efforts to boost local rice production, Nigeria still depends on imports to supplement its supply. In 2021 alone, the country imported rice worth $5.78 million from India.

INEC RECRUITMENT

The ban on Indian rice exports has had an unforeseen consequence on local rice millers, forcing many to halt production due to a shortage in supply. Muhammad Salisu Kuna, a rice mill owner in Kano, voiced his concern, “The ban on Indian rice exports has taken a toll on us. The scarcity of Indian rice has created a deficit in locally grown rice. The existing number of mills isn’t sufficient, leading to a surge in rice prices.”

The Central Bank’s proactive measures to meet domestic rice demand resulted in an impressive increase in processing capacity, rising from 350 thousand metric tonnes in 2015 to nearly 3 million metric tonnes in 2022.

Further highlighting the issue, Muhammad Sani of the Rice Farmers Association of Nigeria pointed out that approximately fifty rice mills in Kano state alone have been compelled to cease operations due to the scarcity of rice.

He added, “The absence of Indian rice, combined with Nigeria’s border closure with Niger Republic due to sanctions, as well as farmers being unable to access their fields due to banditry, are collectively taking a toll on rice mills.”

The Recent Surge in Rice Prices

Over the last few months, rice prices have experienced a significant upsurge in local markets. An investigation by Nairametrics revealed a 29% increase in the price of rice within a span of two months.

According to the latest food price watch by the National Bureau of Statistics, the cost of one kilogram of rice escalated from N555.18 in May to N608.20 in June 2023.

For the past three years, a confluence of factors, including the conflict in Ukraine, security challenges, the 2022 floods, and others, has contributed to the soaring prices of food, particularly grains.

In response to this situation, the Federal government declared a state of emergency on food production and recently initiated the distribution of grains across the nation in an effort to curb the escalating food prices.


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