The cost of a 50kg bag of rice has plunged to N58,000 in several parts of Nigeria, especially in remote areas, due to a surge of rice imports arriving indirectly through the Republic of Benin, according to a report published by S&P Global.
The report revealed that the West African parboiled rice market has dropped to its lowest point in nearly two years. This decline follows India’s decision to scrap export taxes on parboiled rice, a move that significantly boosted supply across regional markets.
As a result, the price of a 50kg bag of rice, which had previously hovered around N80,000, has fallen sharply to N58,000, fueled by the flood of rice shipments into Benin, which then make their way into Nigeria.
Surging Indian Exports Drive Market Saturation
Platts, a unit of S&P Global Commodity Insights, reported that warehouses in Benin are overflowing with newly arrived, lower-cost Indian rice. Traders indicated that between September and December 2024, India exported about 2.11 million metric tonnes of parboiled rice to West Africa. This marked a substantial rise from the 720,000 metric tonnes exported during the same period in 2023.
Overall, data from the Agricultural and Processed Food Products Export Development Authority showed that in 2024, India shipped 5.35 million metric tonnes of parboiled rice to West African nations, up from 3.9 million metric tonnes the previous year.
A trader based in Togo noted that the market atmosphere across West Africa has turned “quiet and bearish,” with declining prices dampening enthusiasm for buying. Nigeria, being Benin’s largest rice market, continues to experience a surge in smuggled rice, causing both locally grown and imported rice prices to collapse within the past two weeks.
Local and Imported Rice Prices Slide
Currently, the price for a 50kg bag of locally produced rice in Nigeria has dropped from a range of N80,000–N90,000 to around N60,000. Meanwhile, imported Indian rice has also seen a significant decrease, with prices falling to approximately N80,000.
However, despite the falling prices, demand has not increased as might have been expected. According to the report, many buyers are adopting a wait-and-see attitude, anticipating further price declines before committing to bulk purchases. “Even though prices are sliding every day, buyers are hesitant, holding out for market stabilisation,” a trader explained.
A rice merchant in Benin suggested that any meaningful boost in demand might only materialize as the Christmas season approaches around September, when consumer purchasing typically ramps up.
Nigeria’s Rice Smuggling Dilemma
Nigeria remains the primary consumer of rice entering the Republic of Benin. In border communities such as those in Ogun State, rice prices have fallen even further, with 50kg bags selling for under N50,000 due to their close proximity to Benin.
Despite the government’s official ban on rice imports, smuggling continues unabated, making rice the most trafficked commodity across Nigeria’s borders. The Nigerian Customs Service faces ongoing challenges trying to curb this illicit trade, often engaging in relentless efforts to intercept smugglers.
Analysts argue that unless substantial structural reforms are implemented — such as improving local rice production and closing loopholes in border security — the illegal rice trade will likely persist, with prices remaining volatile and local farmers struggling to compete with cheaper foreign imports.
Looking Ahead
As global market dynamics continue to shift, particularly with India’s major role in supplying West Africa, rice prices in Nigeria are expected to fluctuate further. Observers anticipate that unless the government strengthens domestic agriculture and fully addresses smuggling activities, Nigeria’s rice market will remain vulnerable to external shocks and illegal cross-border trade pressures.
