Chairman of BUA Group, Abdul Samad Rabiu, has recognized hoarding as a key driver of meals inflation in Nigeria’s rice market, citing how paddy rice purchased at harvest for N400,000 is resold at N800,000 simply months later.
Rabiu disclosed this to State Home Correspondents after a gathering with the President on Thursday on the Presidential Villa, Abuja.
He famous that a number of corporations intentionally hoard in the course of the harvest season solely to resell it months later to double their revenue, therefore contributing to the post-season value spikes that burden shoppers.
“The second the season finishes, the value will double. That has at all times been the issue. And that doesn’t actually have an effect on the farmer in any means as a result of the farmer is getting his N400,000 to N500,000 per tonne of paddy.
“However the individuals which are shopping for and hoarding for 3 to 4 months, as soon as the season finishes, it goes again as much as N800,000,” he mentioned.
Rabiu famous that this speculative apply locations undue stress on the buyer market whereas farmers stay unaffected by the eventual value surge.
In response to the value manipulation, Rabiu disclosed that members of the Rice Millers Affiliation had taken a collective stance towards hoarding amongst their ranks.
“So, I’m hopeful that on the finish of the day, the value of rice, going ahead, won’t go any larger than what it’s at present.”
“And I’m certain as quickly because the season begins, the farmers will get the value they’ve at all times gotten, and the value of rice goes to remain the identical, as a result of individuals will probably be cautious of hoarding, as a result of in the event that they hoard, they are going to lose cash.”
As one of many key gamers within the Rice Millers Affiliation, he disclosed that BUA Meals has constructed up sufficient inventory to provide the market till the tip of the 12 months.
“Anyone who tries to hoard rice and attempt to take the value up, we’re going to crash the value,” he warned.
Nigeria’s rice market has lengthy been a recreation of energy not by farmers or millers, however by merchants who know when to carry again provide and when to launch it.
Costs had reached report highs, with a 50kg bag of rice promoting for as a lot as N100,000 in some cities. In July, alarmed by skyrocketing meals inflation and the factitious shortage gripping native markets, President Bola Tinubu authorized a 150-day duty-free import window for key grains together with maize, husked brown rice, wheat, and cowpeas.
The plan was aimed toward flooding the market with reasonably priced meals by permitting importers to carry it in duty-free by way of each land and sea borders.
As a part of the identical plan, the federal authorities additionally import 250,000 metric tonnes every of wheat and maize to replenish the depleted Nationwide Strategic Grain Reserve.
BUA Group Chairman, Abdul Samad Rabiu, has linked the current drop within the costs of rice, flour, and maize to the federal authorities’s duty-free meals import window.
In response to him, the corporate took benefit of the waiver scheme to herald giant volumes of rice and different grains, flooding the market and altering the value dynamics.
He mentioned the elevated provide attributable to official imports underneath the scheme disrupted the marketplace for grain hoarders who have been banking on shortage to promote at inflated charges.
“It is very important defend our farmers, however on the identical time, we even have 250 million Nigerians who’re paying much more than what they need to be paying, due to what few corporations or people are doing,” he mentioned.
BUA chairman famous that lots of those that stockpiled grains in anticipation of upper costs are actually struggling to promote and are incurring losses because of this.
What you need to know
Nairametrics has reported that paddy rice costs might rise by 50% in 2025, following decreased manufacturing, rising market demand, and the potential finish of the federal authorities’s 150-day import waiver.
Whereas costs stay secure for now because of stockpiling by main processors, the outlook suggests a big improve if present commerce circumstances change
