Rice crash: Why prices fell to N48,000 and what it means for farmers

The price of rice has dropped sharply across parts of Nigeria, with a 50kg bag now selling for between N48,000 and N49,000. The decline is linked to an influx of cheaper imported rice following federal government import waivers, but local millers say the policy is hurting domestic producers.

Consumers gain, farmers worry

Peter Dama, National Chairman of the Rice Millers Association of Nigeria, said the lower prices are being driven partly by cheaper imports after government measures aimed at improving food availability and reducing inflation. He noted that consumers, particularly in Lagos, are pleased with the relief, but argued that the benefits are coming at the expense of local producers.

Dama said imported rice can now be sold at around N48,000 to N49,000 per 50kg bag, making it difficult for locally produced rice to compete. He pointed out that countries such as India, China, Malaysia and Japan provide substantial support to their rice farmers, allowing them to produce at lower costs and remain competitive in export markets. Nigeria, he said, does not provide comparable support, leaving domestic producers exposed to rising input, energy, labour and transportation costs.

Rising costs force millers to shut down

The disparity in production costs means Nigerian millers can spend significantly more producing rice than the prevailing market price allows them to recover. Dama highlighted the rising cost of labour as a major challenge, saying workers involved in drying, washing and processing paddy now demand substantially higher daily wages.

Transportation and loading expenses have also surged. Dama cited the cost of loading bags onto trucks as an example, saying charges that were previously as low as N15 per bag had risen to about N500 in some cases. For a truck carrying hundreds of bags, the additional cost quickly becomes substantial and ultimately shows up in the price of locally produced rice.

The association chairman said the rising costs have already forced some rice millers to shut down because they could no longer compete with cheaper imported products. He said local producers need to make a profit to remain in business, but are increasingly being pushed into situations where production costs exceed selling prices.

Government policy and import changes

The Federal Government approved a 150-day duty-free import window in July 2024 for selected food commodities, including husked brown rice, maize, wheat and beans, as part of measures to tackle food inflation. The Nigeria Customs Service subsequently released guidelines allowing qualified importers to bring in the affected commodities at zero import duty and other associated levies.

Although the 2024 measure was a temporary intervention, later fiscal and tariff reforms changed the import regime. In 2026, the government introduced broader tariff changes that reduced duties on several agricultural products, including rice, rather than keeping the earlier blanket zero-duty arrangement.

What it means for the naira and consumers

The latest price decline presents a dilemma for policymakers. Consumers are benefiting from cheaper rice, but domestic farmers and millers say they are struggling to survive under the same market conditions. The earlier report also noted that Lagos Rice was slashed to N57,000 per 50kg bag by Governor Babajide Sanwo-Olu, offering some relief ahead of Christmas, but the broader pressure on local production remains unresolved.