Nigerian Traders Alarmed as Bag of Rice Skyrockets by 29% in Two Months

The price of a bag of rice recorded a reported increase of 29% in two months. This surge has caused widespread concern among traders and consumers. 

The surge comes in line with a World Bank Food Security Update which noted that the prices of agricultural products, exports, and cereals increased by 6%, 4%, and 10% respectively at the end of July 2023.

The report also noted that the prices of Maize and Wheat rose, closing at 12% and 14% higher within the same period. Newsmen report that the price of rice in Lagos increased from N32,000 in June to N45,000 by the current date. They also revealed that locally produced rice in the Federal Capital Territory is currently priced at N37,000 per bag, while imported rice is selling for N48,000.

While these prices are alarming, let us take a look at some of the causes of the hike.

Hike in Transportation Costs

Speaking with newsmen, Francis Uwhakenan said the escalating cost of transportation over recent months has contributed to the rise in rice prices. He also explained that the expense of transporting a truckload of rice has doubled within this period. 

Depreciation of Naira 

Another importer told Newsmen that his rice supply comes from the Republic of Benin. He said of late, he has had to purchase dollars at a rate of N890/$, which he then converts to francs. He pointed out that after accounting for the high costs of acquiring this expensive foreign exchange, the end consumers inevitably bear the burden.

Low consumption of local rice

Moreso, wholesale distributors noted that local rice is not moving in the market. This is because most residents rarely consume local rice.

Godwin Imafidon, a wholesaler in Iyana Ipaja Market said, “Despite the buzz around local rice, people aren’t buying. They opt for foreign variants, praising its quality and lack of impurities.” 

Impact of floods on rice farms

Reflecting on the 2022 nationwide floods, Ade Adefeko, vice president of Olam Nigeria Limited, described its effect on their rice farm and the subsequent influence on rice prices.

He said,  “A considerable 25% of the rice crop was lost after the October 2nd incident.” 

With the ‘Ember Months’ looming, traders speculate that the cost of a rice bag might escalate beyond the financial capability of average wage earners by December.