Nigeria imports N1.7trn rice in 10 years


Nigerian rice merchants imported 24 million metric tons of rice valued at $8.86 billion (N1.77 trillion) from Thailand, Pakistan, India, United States and Vietnam in the last 10 years, New Telegraph has learnt. The imports were shipped between 2006 and 2015. In January 2006, the price of the commodity soared from $284.45 to $369 per metric ton.

Statistics revealed that in 2006, the country imported 1.5 million metric tons; 1.8 million metric tons in 2007; 1.75 million tons in 2008; 1.75 million metric tons in 2009 and 2.4 million metric tons in 2010. In 2011, the nation also imported 3.2 million tons; 2.8 million tons in 2012; 2.8 million tons in 2013; 3.5 million tons in 2014 and 2.5 million tons in 2015. Data from the Nigerian Ports Authority (NPA) revealed that 70 per cent of the imports were shipped through the approved neighbouring land borders and illegal routes.

Over 1.8 million metric tons of rice loaded in 30,000 trucks was routed via transit shipments through Niger to the northwest of Nigeria in 2015 alone. The commodity is valued at N144 billion ($720 million). The data revealed that the imports rose by 20 per cent in 2007, while it declined by -2.78 per cent in 2008.

In 2009, Nigeria imported the same quantity when the price rose to $615.25 per metric ton. However, the price of the commodity had increased by 37.14 per cent when it imported 2.4 million tons.

In 2011, the importation was boosted by 33.33 per cent but declined to -12 per cent in 2012 and 2013. However, the country’s demand rose by 25 per cent despite the restriction placed on rice importation.

Last year, the commodity went down by -29 per cent due to government policy on tariff and activities of smugglers. Between 2012 and 2015, the Central Bank of Nigeria (CBN) said that Nigeria spent a whopping $2.41 billion on rice importation. Governor of the CBN, Godwin Emefiele, at the New Telegraph Economic Summit held last week, disclosed that the amount was spent between January 2012 and May 2015.

Unfortunately, he noted that the trend had resulted in huge unsold stock of paddy rice cultivated by Nigerian farmers and low operating capacities of many integrated rice mills in Nigeria. Meanwhile, the United State Department of Agriculture, in its forecast, had explained that Nigeria would take second position with four million tons in 2016. Nigeria consumes nearly six million tons of rice per year, but the council said that about 3.1 million tons is imported despite a tariff of 70 per cent.

Also, a data by the International Grains Council (IGC) noted that 85 per cent of parboiled rice imported by Benin were shipped to Nigeria by road. It explained: “Over half of imports in 2015 entered from neighbouring Benin where the duty on rice is only 12 per cent.

“Nigeria consumes parboiled rice exclusively, but Benin prefers white rice. It is easy to deduce that the 85 per cent share of Benin imports that are parboiled are bound for Nigeria through the smugglers.”

Also, the Chairman of Seaport Terminal Operators of Nigeria (STOAN), Mrs. Vicky Haastrup, said that in 2013, the Republic of Benin handled 2.2 million tons of cargo in rice. According to her, “out of that 2.2 million tons, 1.6 million tons was parboiled rice. It’s only Nigeria that eats parboiled rice in the sub-region. I just can’t recollect how many ships berthed in the Republic of Benin and Cameroon.

“We at ENL Consortium Limited, operators of Terminal C and D Lagos Port Complex, do like 1.6 million tons yearly and those figures recorded in other ports find their way back into the Nigerian market where they are sold.

“This is because it is far cheaper for rice ships to be discharged in Republic of Benin and Cameroon than in Nigeria. Like I said, it’s seven per cent in Benin Republic and zero per cent duty in Cameroon. But the unfortunate thing is that those shiploads of rice are still coming in.

“The trailers are coming every night. So, what government was trying to do is penny wise pound foolish. Government is talking about increasing the capacity of local rice producers, but we’re not doing it well, because those rice are still coming in on a daily basis and the Nigerian government is losing huge amount in revenue because of that. It runs into several billions of naira annually.”

In the last five years, Nigeria had imported some 14.7 million metric tons of milled rice valued at N1.15 trillion ($5,768,400,000). This year, the country is expected to take delivery of 3,500,000 metric tons despite the high import duty and tariff. The current global price per ton is $392.41.

According to the United Nations Food and Agricultural Organisation (FAO), there is a renewed demand by Nigeria. In 2010, the country took delivery of 2,400,000 tons of milled rice from Asian countries and America; 3,200,000 tons in 2011; 2,800,000 tons in 2012; 2,800,000 tons in 2013 and 3,500,000 tons in 2014. The council said that Nigeria’s overseas rice purchases were highly concentrated among just a few major trading houses.

It noted that about 60 per cent comes in bulk vessels from the three largest rice re-processors in Thailand with bagging at the Nigerian ports. According to IGC, “The remaining 40 per cent is vessel loads of break bulk bagged rice originating in south-eastern or northwestern India. “Starting a few years ago, the Nigerian government has allowed these companies to pay only 30 per cent import duty if they invest in domestic milling capacity.

As a result, the small group of companies that accounts for most imports also owns a major share of the modern milling capacity. “The challenge that they and other value chain investors now face is procuring or producing enough rice to keep these mills operating.”

The Rice Processors Association of Nigeria has 22-member companies that lobby government to maintain import duties and rein in illegal shipments from Benin.