Duty-free food import: Will rice price drop near-term?

The delay in the implementation of the 150-day duty-free food import window in Nigeria has sparked concerns over the recent surge in staple food prices, particularly rice, as the yuletide season draws near. Bamishe Ogunleye, Head of Domestic Markets at Afex, shed light on the recent commodity price movements and the near-term outlook in a recent interview on CNBC Africa. The ember months typically witness higher prices for staples in Nigeria, with local rice prices soaring by 152% as of September. The retail prices for a 50kg bag of imported rice have ranged between 80-125, adding pressure on consumers. Ogunleye attributed the price surge to a supply-demand imbalance, noting a reduction in the total output of paddy compared to the previous year. The insufficient supply, coupled with increased demand during the festive season, has led to the upward trend in prices. While the government aims for year-round farming to boost production, Ogunleye highlighted the need for strategic grain reserves and prompt execution of import duty waivers to alleviate food inflation. He urged the government to extend the duty-free import timeline to enhance market supply and stabilize prices. Ogunleye forecasted that rice prices may remain below 800,000 per metric tonne by year-end, emphasizing the importance of sustainable government interventions in the agriculture sector. Despite previous initiatives like the rice pyramids, Ogunleye stressed the necessity of effective policy implementation and resource dissemination to smallholder farmers. The success of government incentives lies in timely delivery and meticulous monitoring to ensure maximum impact at the grassroots level.