Sharp rise in rice price imminent

Sharp rise in rice price imminent
… As FG hikes import levy

The Rice Millers, Importers and Distributors Association of Nigeria (RiMIDAN) has expressed concern over possible sharp rise in the price of rice, Nigeria’s major staple food, as the Federal Government imposed a 100 per cent special levy on the importation of the commodity into Nigeria.
According to a statement by RiMIDAN’s Secretary-General, Mr. Mohammed Shaibu, “the Federal Government, effective from January 1, 2013, raised the Special Levy on imported parboiled rice from 40 per cent to 100 per cent. With the 10 per cent statutory duty on rice, Nigerian importers now pay a total of 110 per cent duty on rice imported into Nigeria.”
The group cautioned that this move has serious implications for both ordinary Nigerians, whose major food is rice, and for the economy.
“The first major response of the market is that the price of rice is bound to increase sharply as the landing cost of a bag of rice has jumped to N11,000. It is, therefore, envisaged that the price of rice will soar to about N13,000 or N14,000 per bag. This is against the N10,000 it sells for now,” Shaibu said.

According to him, “the other dramatic effect of this hike in levy is that government seems to have declared a bonanza for smugglers because the duty on rice across the West Coast of Africa still remains 10 per cent. The import of this is that the profit margin of rice smuggled across the borders would be so high and tempting that everybody would want to take the risk to the detriment of Nigeria’s economy.
“We at RiMIDAN appreciate government’s desire for Nigeria to achieve self-sufficiency in rice production by 2015, but we advise caution, careful planning and the institutionalisation of the Rice Special Levy Fund (RSLF). With this and partnership with all major stakeholders in the rice chain, Nigeria should be self-sufficient in rice production by 2018.”
According to the group, former President Olusegun Obasanjo in 1999 introduced the charging of 20 per cent levy on rice imports into Nigeria to enable the government set up a fund for local rice development.
“This was later increased to 40 per cent a few years back. This levy is now 100 per cent yet the rice fund is yet to be set up,” the statement noted.
The statement claims that RiMIDAN membership, which include the Olam Group, Dana Group, Elephant Group, Flour Mill of Nigeria, PJS Group and Stallion Group, have thousands of hectares of rice farms and state-of-the-art rice mills across the country, urging the government to “carry us along in its plans.”