Happening in the Nigeria Rice Market

  • December Inflation figure is out and just has said on our previous update here after a downward streak for consecutive eight months. December breaks that trend, and like always food inflation leads that opposite trajectory. But the important thing I would like to talk about here is that though we are not sure of the authenticity of the NBS result, we must, however, note that this figure is for the previous month and as customers and businesses, we live in an ever-changing economic reality
  • What is in this for me? The food sub-index grew by 17.37% year on year. We wouldn’t go into the details of this but it’s worth mentioning that food prices rose by 2.19% from last month, November 2021. This then will lead to a demand push-back which can be reflected on every market such as the stock market which can have a crash or correction in price to reflect the true value of the stock. Price crash is however more difficult to occur in the food market because of different constraints facing the supply of food. In the absence of immediate fall in prices of food, painfully we need more money to buy the same food items.
  • Recently, it seems stricter regulation is placed on rice importation by the government, while it introduces more strategies to ensure that the people develop taste for Nigeria rice. Will the 1 million bags of rice unveiled last week have any impact?
  • First, the rice pyramid is no small feat but they are paddy rice, not processed rice. On the contrary, the prices of foreign rice are on the high side because the demand is more than supply. Foreign rice has increased by about 40% in the last 2 months, especially imported short-grain rice. It is telling that with limited options, people are gradually embracing our processed Nigeria rice whose price has also increased slightly because of more demand
  • It is a no-brainer that your choice would be obvious a few months ago. Our pots, plates, and then our stomachs had always been filled with foreign rice more than the Nigeria rice. However, the story is changing in favour of Nigerian rice. The popular adage that there is no forever champion is coming true in the rice market.
  • Foreign rice is becoming increasingly difficult to come by. It is much scarcer. It is getting more expensive and many buyers cannot put up with this in the face of cheaper and more readily available Nigeria rice. So, for how long are we going to have the demand for Nigeria rice growing, while that of foreign rice shrinking? Time will tell. But before then Nigeria rice is also not slowing down (about 10% increase in 3 weeks)
Optimum (Fortune Rice)

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