Price of rice up 20% to N9,000

The price of rice has increased by 20 percent, to a minimum of N9,000 per bag, up from N7,500 on the back of a new benchmark price for imported rice.

The Federal Government has put the benchmark price for imported rice at USD$673 (N106, 334) per ton, which is the equivalent of 20 bags of rice in the fourth quarter of the year (October - December).

The government has explained that the new benchmark is to discourage importation of rice and  improve on domestic production, to meet local consumption.

BusinessDay findings however show that the commodity still attracts varied prices, as different brands sell for N9,000. N10,500 and N12,000 per bag, as the case may be.

Our findings also show that the market will still witness more price increases as the yuletide season usually comes with increase in demand for consumer goods, particularly rice.

A rice dealer who introduced herself to our correspondent as Yetunde Thompson, confirmed that prices usually go up in expectation of increased household demand, along with the Federal Government’s new benchmark.

In a statement signed by Ngozi Okonjo-Iweala, the Coordinating Minister for the Economy and Minister of Finance, and published by the Nigeria Customs Service (NCS), the breakdown of the new benchmark price of rice, shows that the importer is expected to pay USD$613 per ton for Free on Board (FOB) and USD$60 per ton for freight, totaling USD$673.

According to the circular, the new benchmark price was arrived at, based on advice of an Inter-Ministerial Committee, comprising of the Presidential Committee on Trade Malpractices (PCTM); Federal Ministry of Agriculture (FMA); Nigeria Customs Service (NCS); Federal Ministry of Trade and Investment (FMTI); Budget Office of the Federation and Federal Ministry of Finance; Rice Millers; Importers and Distributors Association of Nigeria (RIMIDAN).

“The price is inclusive of freight charges and should be noted accordingly for implementation”, said the minister in the circular. She further enjoined the officers and men of the Customs to ensure strict compliance with the above benchmark in their appraisal, as well as valuation of all consignments of rice within the quarter.

It would be recalled that the Federal Government at the beginning of third quarter (1st July 2012) increased the levy paid on imported brown rice to 25 percent and duty paid rate of 30 percent. Also, the levy paid on imported polished rice was put at 40 percent, including duty paid rate at 50 percent, while the domestic production duty rate received 100 percent, which is to commence on December 31st, 2012 into 2013.

According to government, the effort is geared towards discouraging Nigeria from depending on imported rice, through massive domestic production.


Source: Business day