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Sunday, February 25, 2024

Soaring local rice prices hit 73.2% surge in one year despite central bank funding

The cost of production, transportation, and inflation contribute to the steep rise; concerns raised over the disparity in market-based figures and official projections

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Amidst significant multi-billion-naira funding support from the Central Bank of Nigeria aimed at fortifying the nation’s rice value chain, the price of local rice has surged by a staggering 73.2% within a year. The increase is attributed to elevated production costs, transportation expenses, and various economic factors.

Despite efforts to boost local production and curb the importation of foreign rice, the commodity’s price now ranges between N55,000 and N60,000 for a 50-kg bag, varying across regions. The average price of 1kg of local rice has seen a sharp rise of 73.2%, soaring from N500.80 to N867.20 between November 2022 and November 2023.

Comparatively, the price of 1kg of foreign imported rice has increased by 61.53%, escalating from N704.13 to N1,137 during the same period, according to data from the National Bureau of Statistics (NBS). Lagos State reports the highest cost for local rice at N1,122.42, despite the operation of the Lagos Rice Mill, while Kebbi State registers the lowest at N688.

Governor Babajide Sanwo-Olu’s optimistic claims during the inauguration of the Lagos Rice Mill, promising a significant impact on rice importation, now face scrutiny as the price surge persists. The mill, designed to produce 2.5 million 50kg bags annually, was expected to alleviate the cost burden on consumers.

Kabir Ibrahim, the National President of the All Farmers Association of Nigeria, attributed the escalating prices to inflation and heightened production costs, including logistics, packaging, and labor. Disputing NBS figures, Ibrahim emphasized the disparities in market-based assessments and official projections.

While acknowledging the past administration’s substantial investment in rice production, Ibrahim called for a nuanced approach to analyzing commodity prices. He expressed skepticism about the reported 70% increase, citing potential discrepancies between official data and the reality observed in local markets.

In a related development, a joint report by the Food and Agricultural Organisation and the World Food Program predicts increased staple food prices, including rice, maize, and millet, across Nigeria and other West African countries in 2024.

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