The price of locally produced paddy rice is expected to surge by approximately 55% during the 2024/2025 season, exacerbating the already high cost of living, a new report has revealed.
The Afex Wet Season Crop Production 2024 report, obtained by Nairametrics, highlights a steady rise in rice prices.
The report states that during the 2023/2024 season, rice prices saw a seasonal increase of 78%, with the average price climbing to N630,000 per metric ton.
This sharp rise was attributed to constrained supply in the market and increasing demand for rice, which exceeded available stock.
Furthermore, the report forecasts an additional seasonal price increase of around 55%.
The projected rise is primarily driven by the high starting price for the 2024/2025 season, estimated at around N750,000 per metric ton, reflecting persistent supply shortages.
By the third quarter of 2025, paddy rice prices are anticipated to escalate further, reaching between N1,100,000 and N1,300,000 per metric ton.
Factors responsible for the increase in price
According to the report, the price of paddy rice in 2024 was influenced by several key factors:
- Low Access to Financing (38%): Farmers struggled to secure affordable loans, limiting their ability to invest in productivity.
- Low Access to Inputs (31%): The unavailability of essential resources like fertilizers and seeds reduced overall yields.
- Delayed, Insufficient Rainfall (10%): Late rains disrupted planting schedules and negatively impacted crop growth.
- Excess Rainfall (6%): Flooding in some areas destroyed crops and reduced harvests.
- Insecurity (3%): Farmers in conflict-prone regions were unable to fully utilize their lands due to safety concerns.
- Low Access to Farmland (2%): Limited availability of affordable farmland restricted the expansion of rice cultivation.
These challenges combined to drive up the cost of rice in 2024.
What you should know
- While the federal government has maintained a restrictive stance on rice importation, some Nigerians believe these measures could help lower food prices.
- Data from the National Bureau of Statistics (NBS) shows that food inflation in Nigeria has risen to 39.16% year-on-year.
- In response, the government waived import duties on certain food items like wheat, maize, brown rice, and beans to curb rising food prices.
- Nigeria’s rice production has surged to about five million metric tonnes as of 2023, this only covers roughly 60% of the country’s consumption needs.
- The shortfall has led to the illicit importation of rice, driving a significant price increase in the market.
- Between 2016 and 2023, rice prices have surged dramatically despite the government’s heavy investments, such as the N1.1 trillion Anchor Borrowers’ Programme, in rice production.