Tin Can port handled N4m rice in nine months

The volume of imported rice coming in through one of the nation’s seaports has drastically declined due to dollar scarcity, with government revenue in form of duty falling sharply in the process, IFE ADEDAPO writes

The importation of rice

, a major staple in Nigeria, has declined in volume due to the scarcity of foreign exchange occasioned by falling oil prices globally.

Statistics obtained from the Tin Can Island Port in Lagos indicated that in the past nine months, the country imported 13.4 metric tonnes of the product.

There are 1,000 kilogrammes in a metric tonne, while there are 20 bags of 50kg each in a metric tonne. On the average, each bag of rice costs N15,000. Therefore, each metric tonne of rice has a market value of N300,000.

Therefore, 13.4 metric tonnes of rice have a market value of N4.02m at N300,000 per metric tonne.

This quantity of rice in its various forms only fetched the country N336,337 in tax payment from September 2015 to May 2016.

In September 2015, the volume of rice imports was five metric tonnes; it declined to one metric tonne in October and peaked at five metric tonnes in November of the same year.

In December, when rice import was expected to be high due to the festivities, only one metric tonne was imported through the Tin Can port. The volume further dipped to 0.5MT in February 2016, but rose slightly to 0.8MT in March, while 0.1MT was recorded for May 2016.

There was no importation of the commodity through the port in January and April 2016.

The value of rice imports through the seaports has been on a steady decline since the first quarter of 2015.

According to the foreign trade report released by the National Bureau of Statistics, semi-milled or wholly milled rice secured the fourth position of all imported commodities in the fourth quarter of 2014 based on its worth of N49.34bn.

However, in the first three months of 2015, rice occupied the third position in the list of imported products with a value of N33.44bn, and dropped to the fifth position with a value of N25.38bn in the second quarter of the year.

The value of rice imports between July and September 2015 declined by 61.8 per cent to N9.69bn, occupying the 15th position, the lowest for all the commodities imported through the seaports in the third quarter of last year.

By the fourth quarter of the same year, rice had completely fallen out from the list of high value imported commodities into Nigeria.

Rice was among the 41 items that the Central Bank of Nigeria excluded from official foreign exchange window in August 2015, leading to difficulties in accessing foreign exchange by importers and high cost of importation when forex is sourced from the black market at over N300 to a dollar.

Investigation showed that the price of the commodity had doubled between September 2015 and May 2016 from N7,500 per 50kg bag to an average of N15,000.

When our correspondent visited Daleko, a major rice market in Lagos State, the traders explained that most of the rice being offered for sale were brought in from Cotonou, Benin Republic due to the ease of importation and payment of duty.

A trader in the market, Alhaja Tawa Kasali, said the price of the commodity brought in from Cotonou was N5,000 per bag but the duty rate and high cost of transportation had made it expensive, adding that those who smuggled the product only risked their investments and lives.

She said the price would have been more competitive if locally grown and milled varieties of the produce were available for sale at lower prices.

However, due to the reduced rice imports, millers in the country are enjoying huge patronage due to rising demand.

The Personnel Manager, Umza International Limited, a rice mill, Mr. Ali Aliyu, admitted that business was booming and the company has had to turn down orders due to its inability to meet traders’ request.

He said, “It gets to a point that we had to call some people that we wouldn’t be able to get them the quantity of rice they wanted. The demand is much more than expected but at the same time, we are not very happy for not being able to fulfil our customers’ demand.

“But there is nothing we can do. We cannot force our machines to work beyond their capacities.”

According to him, the changing trend of the business as well as the high cost of input has made it necessary to increase the price of the locally milled produce.

Presently, he explained that the major factors contributing to the increase in price were poor electricity supply and high cost of paddy, a major raw material for the millers.

Aliyu explained, “We are presently selling for N10,700 per bag instead of the N9,000 we were selling a couple of days ago. A lot of factors contributed to the price increase. Sometimes we will stay for two or three days without having electricity.

“And that means buying more diesel and the price of diesel is not as low as we expect. It sells for N150 per litre and the minimum price is N135; but before now, we were getting electricity for about 10 hours a day. The cost of production has doubled and the paddy rice is very difficult to get.”

He added, “The farmers producing paddy rice are not producing much and there are so many people demanding for it now more than before. Due to the Federal Government’s forex policy, a lot of people will prefer to buy paddy, process and sell.

“The price of the paddy has skyrocketed. It is now N8,000 per bag compared with N4,000 that we used to buy before. Therefore, we have to increase our price.”

As a form of intervention in the rice value chain, the knowledge management and communications specialist, GEMS4, a project of the United Kingdom’s Department for International Development, Ms. Enene Ejembi, explained that smallholder paddy farmers and large scale ones in Kano State were educated on the quality standards of paddy and supported to supply paddy in sufficient quantity to commercial millers.

So far, she said the intervention, which began in 2015, had mobilised 1,199 rice farmers, and earned about £1,195,245 for them.

 

“Activities to develop the rice value chain began with the mobilisation of farmers and aggregators through community engagement, rice fairs, communication campaigns and farm demonstrations by the Brent Group,” Ejembi added.