Nigeria’s Rice Imports Cost for 2023/24 May Surpass Total Anchor Borrowers Funding

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The United States Department of Agriculture (USDA) projects that Nigeria’s rice imports for the 2023/24 marketing year could exceed the cumulative N1.08 trillion spent under the Anchor Borrowers Program (ABP) over eight years. The USDA report forecasts a 10% increase in parboiled rice imports to 2.3 million metric tons (MMT) in 2024. With a current selling price of $568 per ton, Nigeria may spend $1.31 billion on rice imports in 2024. Factors such as insecurity in farming areas, high input prices, inadequate mechanization, and consumer preference for foreign rice contribute to the reliance on imports.

Key Points:

  1. Rice Import Projection:
    • The USDA projects that Nigeria’s rice imports for the 2023/24 marketing year could reach 2.3 MMT, a 10% increase from the previous year.
  2. Potential Cost of Imports:
    • With a current price of $568 per ton for parboiled rice, Nigeria may spend $1.31 billion on rice imports in 2024, exceeding the total funding for the Anchor Borrowers Program (ABP).
  3. Factors Driving Imports:
    • Insecurity in farming areas, high input prices, inadequate mechanization, and the demand for foreign rice contribute to the preference for imports over local production.
  4. Quality Issues:
    • Despite increased productivity and expanded mills, the poor quality of most local rice varieties and high production costs make imported rice more attractive to consumers.
  5. Consumer Preference:
    • Nigerians have a high preference for foreign parboiled rice due to quality concerns and issues related to local rice quality and cost of production.
  6. Impact on Local Millers:
    • Nigerian rice millers are reducing production due to high operating costs, including diesel and paddy costs. Additional challenges include a weakening Naira and increased smuggling of foreign brands.
  7. Production Forecast:
    • The USDA report forecasts a decrease in Nigeria’s rice production to 8.1 MMT in 2024, citing factors such as higher fertilizer prices, reduced access to farmlands in conflict-prone areas, and increased unrecorded rice imports.

Conclusion:
The USDA’s projection of Nigeria’s rice imports exceeding the total funding for the Anchor Borrowers Program (ABP) highlights the challenges faced by the country’s rice sector. Factors such as insecurity, high production costs, and consumer preferences contribute to the reliance on rice imports over local production. Addressing these challenges, improving the quality of local rice, and supporting local rice millers are crucial for achieving sustainable food security and reducing dependence on imports.

BD

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