Following scarcity of containers, a total of N290 billion ($579.75 million) will be paid to shipping lines as freight rates by rice importers before the end of the year.
The affected rice importers, who have their rice trapped in Thailand and other Asian countries, are from Nigeria, Ghana, Togo and Republic of Benin.
Findings revealed that in the first week of October, 2021, the shipping lines imposed $150 on a tonne of parboiled rice valued at $405 because of scarcity of containers.
Of the total amount, it was revealed by Thai Rice Exporters Association (TREA) that Nigerian rice merchants, who have ordered two million tonnes of the grain would pay $300 millon; Benin, $81 million for 540,000 tonnes; Togo, $56.25 million for 375,000 tonnes and Ghana, $142.5 million for 950,000 tonnes.
Also, it was gathered that the shift from container to bulk shipments had affected the cost of foreign rice importation into Nigeria and other West Africa countries from Thailand, Singapore India and other Asian countries in the last quarter of 2021.
Presently, a bag of foreign rice sells for between N29,000 and N30,000 for the long grain and small grain variety in Nigerian market respectively, while a bag of the local grain is sold between N22,000 and N25,000 depending on the quality.
Statistics by a global trade portal, Index Mundi, revealed that the country imported 1.8 million tonnes or 28 per cent of local consumption last year despite stringent measures by government as local production of the milled rice dropped from 5.04 million tonnes to 4.7 million tonnes in the period.
The Thailand exporters have complained that container freight costs from Asian origins such as Thailand and India were almost twice the levels break bulk ships loaded with rice arrived in West Africa amid clogged ports.
Thailand rice exporters have already cut the price of the grain from $507 to $405 in October, 2021, in order to enable them supply their cargoes to the West African buyers.
The development is coming as plan to achieve self-sufficiency in rice production by the Federal Government in 2022 becomes doubtful as the country still depends on 1.8 million tonnes of smuggled rice from neighbouring Benin to meet local consumption despite the agreement entered into by the Federal Government and the Republic of Benin, in Abuja, to end rice smuggling.
Government has been making substantial efforts for a decade to encourage rice cultivation in order to eliminate imports through subsidised loans, cheap fertiliser, free farmland and tax rebates, but it was gathered that some farmers refused to pay back their loans to the Central Bank of Nigeria (CBN).
According to Rice Farmers’ Association of Nigeria (RFAAN), Niger State chapter, some farmers have been dragged to court for defaulting in repayment of loans taken from CBN.
The association noted that farmers, who benefitted from the CBN special intervention project for rice farming were expected to return a certain amount of their harvests as loan repayment.
But the state coordinator of the project, Idris Makaranta, complained that they had refused to redeem the return expected from them from their last season harvest as agreed.
Makaranta explained at the inauguration of the centre coordinators of the state RIFAN/CBN Special Project in Bida that “from the 40,000 farmers, who participated in last season’s rice farming, we were supposed to recover between 300,000 and 400,000 bags of paddy rice, but we have only recovered about 100,000 bags.
“We have handed the defaulters over to court to recover our return for us, while anyone who has brought more than 60 per cent of the returns would be considered for dry season farming.”
It would be recalled that the Federal Government had made moves to attract N250 billion investments in rice production following plans to establish an additional 14 rice mills in the country.
However, efforts to boost domestic production have been curtailed by smuggling through the porous borders.
Between January and April, 2021, the Federal Operation Unit, zone A of the Nigeria Customs Service (NCS) in Lagos seized 41,652 bags of 50 kilogrammes smuggled parboiled rice from Idiroko and Ipokia in Ogun State and Lagos.
Also in Ogun State, 20,538 bags of rice were intercepted by the Service between March and April, 2021.
Meanwhile, the National Chairman of Rice Processors Association of Nigeria (RIPAN), Alhaji Mohammed Abubakar Maifata, had said that smuggling of foreign rice would soon come down to zero level, while the local rice would fill the gap conveniently if farmers received necessary support from government.
The chairman urged all stakeholders to join in the campaign against the activities of smugglers through advocacy and sensitisation to ensure attitudinal change on the part of the outlaws.