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January 26, 2009

Strong Nigerian demand pushes up price of broken rice

by Abimbola Akosile

The price of broken rice has gone up by 13 per cent in the last one week because of demand from Nigeria, the Philippines News Agency reported in early January. The price per tonne is now $350, according to the Ministry of Agriculture and Rural Development's Policy and Strategy Research Institute, Vietnam.

The institute attributed the rise to larger contracts from Nigeria and the Philippines, with the latter recently contracting to buy 500,000 tonnes of this kind of rice from the Southern Food Corporation. Nigeria has already bought 250,000 tones from Vietnam, citing prices $80 to $90 lower than in Thailand.

A survey conducted last year by the Dutch Agricultural Development and Trading Company (DADTCO) showed that Nigeria is currently estimated spending $1.3 billion every year to import around 2.2 billion kg of rice in order to fulfil its domestic requirements. The report, which was presented at the signing of a Memorandum of Understanding (MoU) between DADTCO and the Taraba State Government on the Taraba Rice Project, stated that it was wasteful for Nigeria to continue to deploy its scarce resources in rice importation.

President Umaru Musa Yar'Adua has often expressed deep concern over the high level of rice importation in the country as Nigerians spend almost N130 billion yearly on it. Estimates indicate that about three billion people eat rice everyday, with Nigerians consuming over three and half million MT annually.

It is the opinion of many experts that Nigeria and other West African countries were blessed with abundant resources, and if the resources were harnessed, they could create an environment that would be free of hunger and import-dependent for grain.

Minister of Agriculture and Water Resources, Alhaji Sayyadi Ruma, had announced last year that domestic rice farmers would have access to the N10 billion-rice development fund, a government package to help Nigeria achieve self-sufficiency in rice production. Ruma had said that the major challenges facing local rice production were poor processing, storage, preservation, lack of credit facilities, decayed and inadequate infrastructure and poor quality of farm inputs. The fund was intended to spur initiatives and help address the challenges in the rice sector.

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