Global rice prices soar to 15-year high

A recent report from the Food and Agricultural Organization has sent shockwaves through the global rice market as prices soar to a 15-year high. The surge in prices can be attributed to India's ban on Indica white rice exports in July, a scarcity of supplies ahead of new crop harvests, and uncertainty surrounding the ban's duration. To shed light on the situation, Kola Masha, CEO of Babban Gona, joined CNBC Africa for a discussion on the impact of these developments on Nigeria's rice industry. Despite Nigeria's efforts to reduce rice imports in recent years, the country still heavily relies on imports from countries like India to supplement local production. The shortage of rice in the northern producing regions has raised concerns, prompting a closer look at the state of the industry. Masha highlighted the significant increase in rice production in Nigeria since the launch of initiatives in 2012-2013, amounting to nearly 2 million metric tons of additional production. However, challenges persist due to the country's growing population, especially in urban areas where rice consumption is on the rise. The mismatch between domestic demand and supply poses a significant shortfall, with projections indicating a peak demand of over 30 million tons by 2035, while current production stands at just over 5 million tons. The recent government release of grains, including rice, while helpful in the short term, was deemed insufficient to address the underlying supply issues. As Nigeria grapples with the repercussions of India's export ban, Masha emphasized two critical areas for intervention: investment in irrigation and support for effective land preparation. Infrastructure development in these areas is vital to enhance rice production efficiency and address the growing demand. Additionally, Masha called for a focus on improving access to quality rice seeds, citing a lack of investment in the seed sector as a significant obstacle. He underscored the importance of creating incentives for private sector involvement in seed production to boost quality and availability. The discussion also touched upon the challenges of rice smuggling, driven by porous borders and the need for strategic partnerships with neighbouring countries to combat the illicit trade. Despite these challenges, Masha expressed optimism about the profitability of rice farming in Nigeria, citing strong economics and investment in productivity improvements. Looking ahead, he stressed the importance of expanding irrigation coverage and enhancing seed quality to further support rice farmers and elevate the industry's performance. While the global rice market faces turbulence, Nigeria's rice sector braces for a period of transformation and adaptation to ensure food security and sustainability in the face of market dynamics.