As the yuletide season approaches, the average price of rice in Nigeria has reached a record high of N37,000 per 50kg bag.
This comes as Nigerians have been dealing with long-term food crises due to supply chain disruptions, insecurity, and low farm yields.
Recent flooding in some parts of the country has exacerbated the situation, threatening to send food inflation even higher.
Recall that Nigeria is still recovering from the food supply glut caused by the closure of its land borders in 2019, the Covid-19 pandemic in 2020, insecurity issues in 2021, and the fallout from the Russia-Ukraine war in 2022. And the country is now dealing with unprecedented flooding in the northern region.
Rice, a major staple in the country, is one of the many food items whose prices have been affected directly.
Last week, Olam Rice Farm, one of Africa’s largest rice farms, reportedly lost over $15 million worth of rice investments as its farm in Nasarawa State was submerged by the rising flood.
The government has attributed the recent flooding in the country to unusually heavy rainfall and climate change, which has now displaced over 1.3 million people and resulted in more than 600 cases of deaths.
The price of a 50kg bag of domestic rice surged to a record high of N37,000 in October 2022 following the incidences of flooding affecting rice farms across the country.
The price of domestic rice rose from an average of N28,500 recorded in the previous month.
Similarly, the price of foreign-made rice that sold for an average of N32,500 last month has now touched its highest level at N40,000 in several Lagos markets.
This is according to data obtained by Nairalytics – the research arm of Nairametrics.
The recent upshot in rice prices (21.2% year to date for foreign rice and 15.6% for locally produced rice) has been attributed to the destruction of rice farmlands across the country. However, while it seems like the recent flood disaster is the cause of Nigeria’s looming food crisis, Nairametrics takes an account of recent events and factors that have contributed to Nigeria’s food shortages.
In a conversation with Ibrahim Maigari Ahmadu, Founder/CEO, RiceAfrika Technologies, a tech-driven agric mechanisation service provider that deploys harvester hiring services to rice and wheat farming communities in Nigeria and Tanzania.
He noted that rice is the most consumed staple in the country, due to its most convertible nature, being able to make several food items. It can be mostly eaten steamed or boiled, and it can also be dried and found in flour. Similarly, it can also be used to make beers and liquors.
Also, rice straws can be used to make paper and be woven into mats, hats, and other products. Ibrahim said that Nigeria plays a fundamental role in food consumption in Nigeria. “Only Lagos State consumes 47 trailers of rice per day, which means 600 bags of rice multiplied by 47 trailers,” he said.
This shows the magnitude of rice consumed in the country, which Ibrahim estimates at over 8 million MT annually.
The inability of Nigeria to meet its domestic demand, despite increasing production over the years has affected the price of rice. He estimated that Nigeria records an annual deficit of up to 3.5 million MT annually, which is compensated for by importation and smuggling.
Ibrahim Maigari also highlighted the factors that have kept Nigeria’s production below desirable levels despite significant investments in the agricultural sector. Some of the factors causing Nigeria’s low production according to Ibrahim Maigari include very serious infrastructural deficits, a lack of high-yielding seeds, and a lack of agronomic practices.
He said, 92% of the farmers in the country make use of manual harvesting. “It takes about 30 people to work on a single hectare of land manually. Only to harvest 25 bags of rice, while using a machine will take just 30 minutes and harvest 37 bags of rice.”
Ibrahim Maigari noted that the increased level of insecurity in the northern region of the country worsened the supply of food in the country. In his words, “insecurity in Nigeria was a recipe for disaster.”
The rising cases of kidnapping and rural banditry hindered the farmlands from accessing their farmlands, which has affected supply significantly.
He however noted that there have been some improvements in the level of security in the country, which should have had some impact on food production before the recent incidence of flooding.
The Covid-19 pandemic, which started in the early part of 2020 in Nigeria caused global food chain disruption, as movement restrictions were placed in major areas of the world.
Production and distribution of goods were affected by the covid-19 pandemic in most parts of the world, which saw the prices of goods rise to unprecedented levels. The world was about to recover from the pandemic when the Russia-Ukraine war sent the global market into a frenzy.
The price of crude oil rose to record highs earlier in the year, triggering a global-scale energy and food crisis due to the influence that Russia and Ukraine play in sectors respectively.
As a result of the rising cost of energy, which saw the price of diesel surge past N800 per litre. The cost of food production has also risen significantly. According to Ibrahim Maigari, water pumping machines, harvester machines, transportation, milling plants, and bag production, all of which depend on petrol or diesel have affected the cost of production.
He noted that transporting a trailer filled with rice from Jalingo in Taraba State to Kaduna as of last year used to be within the range of N500,000 and N600,000 but has now increased to a minimum of N1.2 million.
He also added that from Jalingo to Lagos has also risen above N2 million per truck. “These increases will reflect on the prices of rice eventually.”
The recent incidence of flooding according to Ibrahim Maigari has wiped out over 50% of rice farms in the country and virtually all the rice farms in Jigawa System.
He added that the system of farming has also enabled the flooding to cause more havoc on Nigeria’s food production. He also mentioned that only a few farms in the country make use of adequate irrigation systems.
The flooding has also affected other food items important to the livelihood and survival of Nigeria, some of which include, sorghum, maize, and poultry.
Ibrahim Maigari then projects that the price of domestic rice to surge over N40,000 into the festive period as Nigerians currently do not have the paddy available to produce rice in other to meet demand.
In another conversation with Sola Obadimu, Director General at the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), the traders are now panic-buying rice in a bid to hedge against possible inflation as we head into the festive period.
He noted that the flooding has exacerbated Nigeria’s underlying infrastructural problems, bordering around insecurity, weak infrastructure, and persistent inflation rate, causing a surge in the prices of rice. He also added that the depreciation of the local currency has also affected the general prices of goods and services in the country, food included.