Chairman of BUA Group, Abdul Samad Rabiu, has identified hoarding as a key driver of food inflation in Nigeria’s rice market, citing how paddy rice bought at harvest for N400,000 is resold at N800,000 just months later.
Rabiu disclosed this to State House Correspondents after a meeting with the President on Thursday at the Presidential Villa, Abuja.
He noted that several companies deliberately hoard during the harvest season only to resell it months later to double their profit, hence contributing to the post-season price spikes that burden consumers.
“The moment the season finishes, the price will double. That has always been the problem. And that does not really affect the farmer in any way because the farmer is getting his N400,000 to N500,000 per tonne of paddy.
“But the people that are buying and hoarding for three to four months, once the season finishes, it goes back up to N800,000,” he said.
Rabiu noted that this speculative practice places undue pressure on the consumer market while farmers remain unaffected by the eventual price surge.
Millers discourage price speculation
In response to the price manipulation, Rabiu disclosed that members of the Rice Millers Association had taken a collective stance against hoarding among their ranks.
“So, I am hopeful that at the end of the day, the price of rice, going forward, will not go any higher than what it is today.”
“And I’m sure as soon as the season starts, the farmers will get the price they’ve always gotten, and the price of rice is going to stay the same, because people will be wary of hoarding, because if they hoard, they will lose money.”
As one of the key players in the Rice Millers Association, he disclosed that BUA Foods has built up enough stock to supply the market until the end of the year.
“Anybody who tries to hoard rice and try to take the price up, we are going to crash the price,” he warned.
Backstory
Nigeria’s rice market has long been a game of power not by farmers or millers, but by traders who know when to hold back supply and when to release it.
Prices had reached record highs, with a 50kg bag of rice selling for as much as N100,000 in some cities. In July, alarmed by skyrocketing food inflation and the artificial scarcity gripping local markets, President Bola Tinubu approved a 150-day duty-free import window for key grains including maize, husked brown rice, wheat, and cowpeas.
The plan was aimed at flooding the market with affordable food by allowing importers to bring it in duty-free through both land and sea borders.
As part of the same plan, the federal government also import 250,000 metric tonnes each of wheat and maize to replenish the depleted National Strategic Grain Reserve.
Prices of rice today
BUA Group Chairman, Abdul Samad Rabiu, has linked the recent drop in the prices of rice, flour, and maize to the federal government’s duty-free food import window.
According to him, the company took advantage of the waiver scheme to bring in large volumes of rice and other grains, flooding the market and altering the price dynamics.
- Rabiu explained that prices have come down significantly from last year, with a 50kg bag of rice now selling for about N60,000, compared to N100,000 previously.
- Flour is currently at N55,000 per bag, while maize sells for around N30,000.
He said the increased supply caused by legitimate imports under the scheme disrupted the market for grain hoarders who were banking on scarcity to sell at inflated rates.
“It is important to protect our farmers, but at the same time, we also have 250 million Nigerians who are paying a lot more than what they should be paying, because of what few companies or individuals are doing,” he said.
BUA chairman noted that many of those who stockpiled grains in anticipation of higher prices are now struggling to sell and are incurring losses as a result.
What you should know
Nairametrics has reported that paddy rice prices may rise by 50% in 2025, following reduced production, growing market demand, and the possible end of the federal government’s 150-day import waiver.
While prices remain stable for now due to stockpiling by major processors, the outlook suggests a significant increase if current trade conditions change
