Nigeria Rice Imports Seen Rising 12% on Demand, Lower Output

(Bloomberg) -- Nigeria, the world’s third-biggest rice importer, will likely receive 12 percent more of the grain from foreign sources in the 2018-19 season as demand spikes at a time of declining output due to higher costs and insecurity, an industry body said.

“We foresee a significant drop in rice production this year,” Mohammed Sahabi, chairman of the rice farmers’ association in Kebbi, a state that’s one of the country’s top three producers of the grain, said by phone from the local capital, Birnin Kebbi.

The amount of land allocated to rice in the Kebbi area has likely fallen by half this year from the 200,000 hectares (494,200 acres) cultivated in 2017, he said. Other major producing states such as Kogi and Ebonyi are dealing with an increasing number of clashes between nomadic herders and farmers, which keep planters from tilling their land.

Internally Displaced

Nigeria’s rice imports are set to increase to 2.9 million metric tons in the 2018-19 season from 2.6 million tons in 2017-18, according to the U.S. Department of Agriculture. Reasons cited included conflict, population growth and more people giving up traditional coarse grains in their meals in favor of rice. Nigeria is Africa’s most-populous nation with almost 200 million inhabitants.

The forecast output-drop is a setback for government plans to stop rice imports by the end of this year to save foreign currency. Production had increased more than 50 percent over the past five years to 3.7 million tons last year. Domestic demand rose 4 percent to 6.7 million tons in the 2017-18 year that ended in May.

President Muhammadu Buhari, 75, is seeking to diversify Nigeria’s oil-dependent economy by boosting agriculture, especially rice production. Elected in 2015, he has overseen investments of almost $1 billion in rice farming and milling, virtually banned importers of the grain from buying foreign exchange, raised tariffs and pushed the central bank to lend to farmers. At the same time, rice smuggling through neighboring Benin and Niger has soared over the past years.

©2018 Bloomberg L.P.