Nigerian rice mills reopen as paddy prices drop by 32%

Onwubuke Melvin
Onwubuke Melvin

Rice millers who were forced out of business in Nigeria are beginning to reopen their factories as it becomes affordable to source critical inputs.

The recent lifting of sanctions on the Niger military junta by the Nigerian government was responsible for their renewed ability to import paddy- a key input for their operations, according to Businessday.

The chairman of African Rice Mill in Nasarawa, Jonathan Joshua said “Some mills that shut down production owing to the scarcity of paddy last year and early this year are now reopening as they can easily source the grain from neighbouring countries owing to the reopening of the Nigeria-Niger border.

“We are expecting the prices of paddy to drop further when farmers commence harvesting in two months.”

Prices of paddy have reduced by 32 per cent since March 2024 when the country reopened its land border with Niger.

A Market survey carried out by Businessday reveals a ton of paddy now cost an average of N425,000 in April, compared with the February price of N625,000 per ton.

The rice milling industry had witnessed a downward trend since October 2023 when Nigeria shut down its border with Niger.

According to the Rice Processors Association of Nigeria RIPAN, Nigeria needs 11 million tons of paddy to meet domestic consumption but it is producing around 4.8 million tons which gives 2.64 million tons of rice. So for the subsector, there is a shortfall of 6 million tons of paddy.

The country’s rice milling industry has a processing capacity of 7.5 million metric tons, data from RIFAN shows.

According to the association’s 2023 report, due to macroeconomic challenges and a shortage of paddy that year, most millers have a large unutilized capacity and therefore high overheads per unit of capacity used.

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