The market price of rice has reportedly increased by about 37%, making the product a scarce commodity as demand maintains a steady increase.
According to the AFEX Wet Season Crop Production Report for 2023, the drop in the availability of the product has widened the supply gap by about two million metric tons annually.
The firm said, “Rice consumption in Nigeria has been steadily increasing, aligning with the consistent growth of the rice market, nearly matching the annual population growth projection of 2.6 percent at 2 percent. This has led to a supply gap of about 2 million metric tons annually.”
As of 2021, Nigeria maintained the top position as a leading rice producer in Africa, with a production output of about 8.3 million metric tons.
The growing consumption rate has, however, led to a decline in the supply of rice, a development that has cost the country over $15 billion in the past decade to meet its expanding rice consumption, despite its potential to be a net rice exporter.
According to the Rice Outlook report by the Economic Research Service of the U.S. Department of Agriculture (USDA), Nigeria is projected to import 2.1 million metric tons of rice in 2024, which may make the country the top rice buyer globally.
This comes amid the latest announcement by the FG lifting the ban on rice importation.
When the ban on rice importation was in force, imports fell by 98.4% to 15 metric tons between January and July 2022, as against 957 metric tons imported during the corresponding period in 2021.
The increase in the price of the product was linked to a drop in production caused by flooding and the ripple effect of international market dynamics.
Some of the factors that contributed to the global increase in the price of rice include the ban on rice exports by India, which is the world’s second-largest rice exporter, and the potential impact of El Nino on production in key regions.
These factors, along with rain-induced disruptions and variations in quality during Vietnam’s summer-autumn harvest, have further contributed to the price surge.
The report has, however, predicted a 4% increase in rice production and a further increase in the price of paddy rice by up to around 32%.