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Why the Price of Rice Will Keep Increasing


By Samuel George

Rice dealers in Nigeria have attributed the rise in price as
well as the scarcity of the commodity to the activities of the government and
some specific stakeholders.

Just a year ago a bag of rice that was sold at N9000 is now
sold at N18500. Although prices have plunged temporarily in a few state owing surplus
availability of the commodity. Ganiyu Quadri, chairman of Alimosho LGA, says a
bag of rice will drop to N9000 in Lagos before December. But the question is
how long will it last?

Retailers are of the opinion that the raising price of rice
is due to the ban of its importation. They believe that the hike in price is
due to the activities of some individuals who monopolize the market. Since the marketers
got their Form M approved last year, it is said they began stockpiling the now
scares commodity. This of course made it easy to monopolize the market after
the ban was instated.

Retailers are also of the opinion that the government also influenced
the price of the commodity by using the expert hands of the customs in seizing
most brands excepts the brands which belong to the importers.

In march 24 trucks of rice were seize in Owerri, on May 3,
800 bags of rice were also seized in Lagos, May 27, 575 bags of rice were
confiscated and of course just recently 2500 bags of rice were withheld by the
Nigeria Custom Service.

According to retailers, rice are not bought from
distributors except from the few brands for the fear the fear of their products
being impounded. 

A trader said “Before we talk of banning importation we must
increase local production to avoid scarcity”. Nigeria consumes 5 million tons
of rice yearly and currently produces less than 2.5 million tons. Obviously
with rice being the staple food of the Nigerian population, it is not producing
nearly enough to fight food scarcity.

Contrary to Mr Gniyu Quadri’s claims, the probability of the
commodity price falling to as low as N9000 is simply false hope. Not when the
Christmas celebration is just around the corner. If at all a miracle happens
and the price of rice falls, it won’t be as low as N9000 and defiantly won’t
last long as Nigeria is not self sufficient and does not have the necessary
infrastructures such as silos to store the commodity.

If rice is to sell N9000 by December the government might
have to temporarily lift the ban of the importation of the commodity or the
commodity may well sell at over 20,000 by Christmas.

Follow me on twitter: @9jasamuelgeorge , I will follow back and we will talk more


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