Rice imports drop by 53% as prices rise

The volume of rice being imported into the country has dropped by 53 per cent in the last one month just as the price of the commodity has increased by over 20 per cent in the market, following the Central Bank of Nigeria’s decision to place rice among 41 items not valid for foreign exchange.

The CBN had last month warned banks and bureau de change operators against making available foreign exchange to importers of rice and 40 other items in a bid to conserve the hard earned forex and boost the production of those products.

Already, the decision is beginning to take a heavy toll on the importers of the affected items and the general business environment. In the case of rice, statistics from the Nigerian Ports Authority obtained on Friday revealed that out of 37 ships expected to berth at the seaport terminals between July 9 and August 1, rice was not included.

The ships carrying other food commodities and other products are expected to berth at the APM Terminals, Apapa Bulk Terminal, GDNL, ENL, Lister, among other port terminals.

It was gathered that since the beginning of the month, only one ship carrying about 34,000 metric tonnes of rice had berthed on July 2 at the ENL/GDNL Terminal.

But in May, the Lagos ports received a total of 71,630 metric tonnes of rice. The 34,000MT of rice for July, therefore, shows a decline of 52.5 per cent.

It was gathered that rice importers were finding it difficult to import the product due to high cost of buying dollars at the parallel market for business.

The value of naira had been depreciating for the past one month. And as of Thursday, the value of naira to dollar stood at N244.

The Afrinvest Research, in its foreign exchange market review of the past week, stated that importers of items banned from accessing foreign exchange at the official market had continued to scramble for hard currency in the parallel market.

It said, “We anticipate that the foreign exchange policies in Nigeria will affect local manufacturing companies that depend on the importation of some of the listed items for raw materials. This may further have some impact on growth rate and inflation in the third quarter of 2015.”

In its circular released on the June 23, the CBN explained that the move was to encourage the local production of the goods and sustain the stability of the forex market.

The CBN Governor, Godwin Emefiele, had threatened to sanction banks that flouted the directive and provided foreign exchange to importers of the banned products.

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