Breaking: Rice prices fall to N58,000 as imports from Benin flood Nigerian markets

DDM News

The price of a 50kg bag of rice has dropped sharply to around N58,000 in various parts of Nigeria.

Diaspora digital media (DDM) revealed that this significant decrease is attributed to a surge in rice imports entering Nigeria through the Republic of Benin.

A new report by S&P Global highlights how the influx has impacted the West African rice market.

The report notes that the market has reached its lowest point in almost two years due to the excessive supply.

India’s decision to remove export duties on parboiled rice is a major factor behind the supply surge.

The lifting of duties made Indian parboiled rice cheaper and more accessible to West African buyers.

As a result, regional markets, especially in Nigeria, are witnessing a sharp decline in rice prices.

Previously, a 50kg bag of rice sold between N80,000 and N90,000 in majo Nigerian cities.

Today, many remote areas report prices as low as N58,000 due to proximity to import points.

Market participants told Platts, part of S&P Global, that warehouses in the Benin Republic are currently overflowing.

This glut has exerted downward pressure on prices across West Africa.

Between September and December 2024, India exported about 2.11 million metric tonnes of parboiled rice to West Africa.

This is a massive increase compared to the 720,000 metric tonnes exported during the same period in 2023.

Across the entire year, India’s exports of parboiled rice to West Africa climbed from 3.9 million to 5.35 million metric tonnes.

Traders report that the situation across almost every West African country is similar quiet and bearish.

Despite the drop in prices, consumer demand has not picked up significantly in the Nigerian market.

Many buyers are adopting a cautious approach, hoping for further price stabilization before making purchases.

This cautious attitude has kept overall market activity subdued even as supplies remain abundant.

Local rice prices have also been affected by the influx of cheaper imported rice.

Prices for local 50kg bags have dropped from N90,000 to around N60,000 over the past few weeks.

Indian imported rice in Nigeria now sells for roughly N80,000, further intensifying competition for local farmers.

Nigeria remains the largest consumer of rice entering the Republic of Benin.

Smuggling across the Nigeria-Benin border continues to thrive, feeding the Nigerian market with cheaper alternatives.

This illegal trade undermines local agricultural efforts and exposes weaknesses in border security.

Communities near border areas, particularly in Ogun State, benefit the most from the influx.

In these areas, rice prices sometimes fall below N50,000 due to easy access to smuggled goods.

Despite the oversupply, traders predict that significant demand will only return closer to the Christmas period.

A trader in Benin suggested that purchasing will rise by September, as festive preparations begin.

Rice is a crucial staple in Nigerian homes, often consumed daily across different socio-economic classes.

Over the years, the Nigerian government has pushed for increased local production through initiatives like the Anchor Borrowers’ Programme.

However, farmers face persistent challenges such as insecurity, poor access to credit, and weak infrastructure.

The situation is further complicated by the competitiveness of imported rice flooding the market.

Although government efforts led to some improvements, local production struggles to meet national consumption needs.

Many Nigerian households still prefer cheaper imported rice over more expensive locally produced varieties.

This preference creates a persistent demand for smuggled rice despite periodic government crackdowns.

The recent price drop reflects the vulnerability of local markets to global production trends and policy changes.

India’s policy shift had a direct ripple effect across West Africa, demonstrating the interconnectedness of global agricultural markets.

As Nigeria battles inflation and food insecurity, rice affordability could offer temporary relief for struggling households.

Nevertheless, without strong policies to protect local producers, the country risks deeper reliance on imported staples.

The rice market’s current volatility serves as a reminder of the importance of agricultural self-sufficiency.

Observers argue that urgent reforms are needed to strengthen Nigeria’s food security framework.

Until then, Nigerian consumers will continue to enjoy cheaper rice while local farmers bear the brunt.

The coming months will reveal whether the market stabilizes or faces further disruptions from international supply shifts.

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