FACTORS like weak purchasing power and an oversupply in the market are causing a significant decrease in the price of short-grain rice across Nigeria, according to recent surveys and market observations.
Further checks involving market analysts and traders nationwide reveal that the struggling and the downward trend economy is dampening Nigerians’ desire for staple foods like rice, leading to substantial declines in sales for traders.
Currently, a 50-kilogram bag of short-grain rice in markets in Lagos and other states has fallen to N60,000.
Foodstuff sellers clarified that the extent of the price reduction for various types of short-grain rice is linked to the quality of the rice.
A report by S&P Global on Monday, April 28, indicated an even lower price of N58,000 for a 50kg bag of rice in some of Nigeria’s more remote areas. This drop is partly attributed to imports from the Republic of Benin.
The S&P Global report highlighted a near two-year low in the West African parboiled rice market due to a flood of supplies into regional markets following India’s removal of export duties on parboiled rice. This influx has reportedly caused the price of a 50kg bag of rice to fall from N80,000 to N58,000 as the commodity enters Nigeria through Benin.
Weakened purchasing power of Nigerians is linked to the price decrease. Traders have reported a significant drop in sales, particularly after the festive season.
“I have resolved not to produce again until we get close to Christmas with visible demand,” a large-scale rice producer, Ekene Okeke, told The ICIR.
Celestine Okeke, a development economist, explained to The ICIR that demand for rice is currently very low, and the market is flooded with supply. This situation is forcing down prices due to the negative impact of the current administration’s economic policies on consumer affordability.
“Farmers are not getting demand, and purchasing power has dropped,” he emphasised.
Survey checks in Abuja and Kaduna showed a decrease in the local price of Anjee rice, a local brand produced in Kaduna, now selling for N65,000.
Mourine Boi, a foodstuff seller in Ayobo, Lagos State, confirmed a slight reduction in the prices of bagged rice in her market. However, she pointed out that long-grain rice prices have remained relatively high, currently around N90,000 for a bag of “My Choice” brand.
Boi noted that the short-grain rice varieties experiencing significant price drops are those that absorb water easily. She mentioned that “Agric” rice is now selling for N60,000 and “Family” rice for N62,000.
“For example, we are now selling a bag of My Choice (type of rice) at N90,000.
“If it is the short-grain rice you want to buy, we sell Agric for N60,000 and Family for N62,000,” Boi said.
Another wholesale seller at Mowe, Ogun State, Jane Palmer, told The ICIR that the prices of short-grain rice have dropped from about N68,000 at a wholesale price a month ago to about N62,000 at the moment.
She noted that prices are slightly higher at the retail stores.
“We sell Tea Top rice at N63,000, Sonia at N62,000, and Rizberry at N63,000. At the moment, I don’t have long-grain rice in stock,” she added.
Interestingly, the Financial Derivatives Company (FDC) reported in its monthly ‘Domestic Commodity Price Movement’ that the price of long-grain rice (50kg) remained unchanged at N85,000 in April.
In their commodity update published on April 24, the FDC noted that while prices of commodities like tomatoes, pepper, and flour increased, there was a decrease in the prices of onions, beans, and garri. They attributed the overall increase in domestic commodity prices to rising cost pressures, as discussed by their managing director, Bismarck Rewane.
“Domestic commodity prices are up due to rising cost pressures,” Rewane stated in the report.