A recent report, the ‘AFEX Wet Season Crop Production Report for 2023,’ has unveiled a consistent surge in rice consumption in Nigeria, surpassing local supply capacity and resulting in an annual supply deficit of approximately two million metric tonnes.
The report highlights a notable 37% increase in grain prices in the year 2023. According to AFEX, the rising demand for grain in Nigeria correlates with the steady expansion of the grain market, nearly keeping pace with the annual population growth projection of 2.6%, which stands at two percent.
The substantial supply-demand gap of 2 million metric tonnes annually emphasizes the struggle to meet domestic grain consumption. Despite Nigeria’s potential to be a net grain exporter, the nation has incurred expenditures exceeding $15 billion over the past decade to fulfill its growing demand for cereal.
The report underscores the global surge in grain prices, reaching a nearly 12-year peak in 2023. Factors contributing to this global trend include India’s embargo on grain exports and the potential impacts of El Nino on key production regions.
The escalation is additionally exacerbated by disruptions caused by rainfall and fluctuations in quality during Vietnam’s summer-autumn harvest. In Nigeria, the 37% year-to-date surge in prices is linked to diminished production in 2022, mainly stemming from flooding in that year’s wet season.
The report also points to the ripple effect of international market dynamics as a factor influencing domestic prices. While anticipating a 4% increase in grain production, the report also predicts a further rise in the price of paddy grains, potentially reaching around 32%.
AFEX notes a remarkable 35% growth in milled paddy grains production in Nigeria, estimating an output of 5.4 million metric tonnes in 2022 compared to 3.9 million metric tonnes in 2015. Although grain cultivation is distributed across all agro-ecological zones in Nigeria, the Northwest region stands out, contributing to 72% of the total rice production in the country.