Nigeria’s rice milling industry is facing growing pressure as cheaper imported rice gains market share, with millers warning that rising operating costs and inadequate government support are making local production increasingly difficult.
National Chairman of the Rice Millers Association of Nigeria, Peter Dama, said the decline in the price of imported rice had provided some relief for consumers but was placing significant pressure on domestic rice businesses.
Dama said consumers in Lagos were among those benefiting from the lower prices, with some able to purchase rice for between ₦48,000 and ₦49,000. He, however, noted that the reduced prices were coming at a significant cost to local producers.
According to him, the major challenge is the wide disparity between the cost of producing rice locally and the cost of importing rice from countries where governments provide substantial support to their agricultural sectors.
He cited India, China, Malaysia and Japan as countries that support their rice industries through various forms of agricultural subsidies, enabling producers to achieve higher output and maintain surpluses for export.
Dama argued that Nigerian farmers and millers were unable to compete fairly because similar levels of support were not reaching domestic producers.
He explained that when production costs significantly exceed selling prices, producers are inevitably forced to operate at a loss.
The association chairman said the challenges extend beyond the cost of paddy rice, noting that labour, transportation, electricity and other processing expenses have all increased considerably.
He said labour costs had become particularly burdensome, with workers engaged in drying, washing and handling paddy reportedly demanding about ₦5,000 per day in some locations.
The cost of transporting and handling finished rice has also risen sharply. Dama said loading bags onto trucks, which previously cost considerably less, could now reach about ₦500 per bag in some cases.
For a truck carrying approximately 600 bags, he explained, such charges translate into a significant additional cost before the rice reaches the market.
According to him, the combination of rising expenses and increased competition from imported rice has forced some millers to suspend operations because locally processed rice can no longer compete effectively.
Electricity costs have also emerged as a major concern, with millers relying on public power supplies and alternative sources of electricity to keep their operations running.
Dama said the high cost of energy was further reducing the profitability of rice milling businesses and limiting their ability to remain competitive.
The concerns come amid the Federal Government’s efforts to address food inflation through changes to food import policies.
In July 2024, the government approved a 150-day duty-free import window covering selected food commodities, including husked brown rice, maize, wheat and beans, as a temporary measure to increase food supply and ease pressure on consumers.
The Nigeria Customs Service subsequently issued guidelines providing for zero import duty and related levies on eligible imports under the policy.
The policy later evolved beyond the original temporary waiver, with broader fiscal and tariff reforms introduced in 2026 reducing duties on several agricultural commodities, including rice, rather than completely removing them.
Despite the policy changes, farmers groups have continued to express concern over imported rice.
The All Farmers Association of Nigeria (AFAN) has also criticised the continued inflow of imported rice, warning that increased competition from foreign products could undermine domestic production and discourage investment in Nigeria’s rice value chain.
The millers are therefore calling for stronger government support, lower production costs and policies that protect domestic investment while ensuring that consumers continue to have access to affordable rice.
