Nigeria’s rice production volume for 2020 is put at 8 million tonnes – with 2.5 million tonnes expected from Kebbi state. However, that expectation suffered a huge setback with over 2 million tonnes of rice washed away by floods among other factors.
According to the KPMG Rice Industry Review, rice is the third most consumed staple food in Nigeria (after maize and cassava). With the festive season fast approaching, the demand for rice is expected to increase.
Backstory: Nairametrics earlier reported that the recent floods in rice-producing Kebbi State had destroyed over 25% of Nigeria’s expected 8 million tons of rice harvests this year. The Kebbi State Commissioner for Agriculture, Attahiru Maccido, disclosed to newsmen that it had lost N1 billion worth of rice and other commodities in the state.
It also reported that the Pipeline and Product Marketing Company (PPMC), Ibadan depot issued an internal memo on September 2, 2020, notifying all stakeholders of an increase in the pump price of petrol to N151.56 per litre.
What to expect
Senior Research Analyst, Financial Derivatives Company, Temitope Olugbile explained that scarcity of rice is expected, as 450,000 hectares of rice – 2 million tonnes, were washed away in Kebbi state out of the expected 2.5 million tonnes this year. This will lead to a high demand for the scarce commodity, resulting in a price increase.
The new pump price of petrol, which led to increase in the cost of transporting farm produce to the market will inevitably cause a price surge for rice.
Journey to rice sufficiency
Nigeria’s journey to rice sufficiency has been full of ups and downs, especially with the tough decision of border closure to curb smuggling and boost local production. According to data from Index Mundi, Nigeria had a production volume of over 5 million tonnes of milled rice last year.
The current gains in rice production are evident, as volume increased by 11.06% in 2019. However, it is noteworthy that the country is still far from being self-sufficient in rice production.
She emphasized that the policies and programs which the government has implemented from forex restrictions to border closure and the Anchor Borrowers Program, which provides farm inputs to farmers, are all impressive.
However, these policies, as a stand-alone without adequate infrastructures, are not sufficient to combat exogenous factors like flood, which is beyond the control of the government and the rice farmers.
She called for proper irrigation and drainage infrastructure, as this would help to cushion the effects of water-logging in farms.
Industrial Index loses -12.39 points, as BUA and Lafarge Cement shares top losers list
The NSE Industrials index lost 12.39 index points in the first trading week in the month of April.
The Nigerian Stock Exchange Industrial Index at the close of trading activities for the first week in the month of April closed on a bearish note, following a 0.66% decrease in the shares of BUA CEMENT and Lafarge.
At the close of trading activities on the Nigerian Stock Exchange on the 9th of April 2021, the industrial index depreciated by 55.01 index points, to close lower at 1,928.18 index points for the week.
When compared to the overall performance of the market, the NSE Industrial index underperformed, noting that the NSE All-Share Index and Market Capitalization depreciated by 0.66% to close the week at 38,866.39 and N20.3350 trillion respectively.
What you should know
The NSE Industrial Index was designed to provide an investable benchmark to capture the performance of the Industrial Sector. It comprises the most capitalized and liquid companies in the industrial sector and is based on the market capitalization methodology.
The index tracks the performance of ten industrial companies on the Nigerian Stock Exchange which includes Dangote, BUA, and Lafarge Cement.
The overall performance of the companies for the week was bearish, as the index closed on a negative note driven by the decrease in the share price of BUA Cement and Lafarge.
MEYER (19.51) was the only gainer for the week, while BUACEMENT (-1.09%) and LAFARGE WAPCO (-3.00%) were the only losers for the week.
- MEYER up by19.51% to close at N0.49.
- WAPCO down by -3.00% to close at N21.00.
- BUACEMENT down by -1.09% to close at N72.70.
BUA says its export-focused sugar project will create jobs and checkmate price hike
BUA Group has assured Nigerians that its export-focused sugar project in Port Harcourt will checkmate arbitrary price hike in the sugar industry.
BUA Group, one of Nigeria’s leading manufacturing conglomerate has assured Nigerians that its sugar export-focused project in Port Harcourt, will checkmate arbitrary price hike in the sugar industry and create jobs for Nigerians.
This disclosure was contained in a letter written by Abdulsamad Rabiu, the Chairman and Founder of the BUA Group, to the Minister of Industry, Trade and investment, Niyi Adebayo.
The letter was a response to the Minister’s request for information on the status and operations of the BUA Sugar Refinery at the Bundu Free Trade Zone in Nigeria, noting that the Minister’s demand for more information was triggered by another letter jointly written by Aliko Dangote of Dangote Industries and John Coumantaros of Flour Mills Nigeria Plc.
In reaction to this, Abdulsamad explained that what BUA is doing in the Sugar Industry is legal and within the confines of the law. In line with this, the billionaire explained that the only way BUA’s export-focused project will affect Nigerians is that Nigerians will pay lower prices for sugar.
He noted that the company had spent over $250 million on the Port Harcourt project, which currently employs over 1,000 Nigerians. In line with this, any move to shut the project down or stifle its operations will cost jobs and exert pressures on the country’s economy.
According to him, the Group’s project in Port Harcourt is mainly for exports, however, the company is allowed to do so under the Nigeria Export Processing Zones Authority (NEPZA), as the NEPZA Act upon which the project is based, gives the permission to process, add value, and export at the same time.
Hence any move to tamper with the current approval of the sugar project in Bundu Free Trade Zone will have a significant economic impact capable of eroding investors’ confidence under the Export Processing Zones (EPZ).
What you should know
- Nigeria’s sugar refining capacity had increased to 3.4 million metric tons per annum from 2.75 million metric tons per annum. This shows that the refining capacity increased from 170% over the last year’s import quota to over 210%.
- Abdulsamad in his letter revealed that BUA remained the only company of the three dominant players (Dangote Sugar Refinery and Flour Mills), spending serious money and seeking to complete its BIP project by 2022.
- BUA in total has three sugar holdings in Nigeria, the first one is a 720,000 mt sugar refinery in Apapa, Lagos, which commenced operation in 2008 and is covered by the Backward Implementation Programme of the National Sugar Master Plan.
- The second is a 20.000-hectare Lafiagi Sugar Plantation and Ethanol Production Complex (Also covered by the NSMP), while the third is the export-focused sugar refinery at the Bundu Free Zone in Port-Harcourt, Rivers State.
Nairametrics | Company Earnings
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- MTN Nigeria raises N73.5 billion from CP Issuance to finance operations.
- Jaiz Bank proposes dividend worth N884 million for shareholders.