The chairman of BUA Group, Abdul Samad Rabiu, has stated that his company could significantly lower rice prices, warning that those stockpiling rice will face financial losses in the long term.
In a report by The Cable, Rabiu spoke to journalists on Thursday at the Presidential Villa during a meeting with President Bola Tinubu. He noted that Tinubu’s decision to remove duties on certain food staples has helped reduce food prices nationwide.
“Food prices are coming down in Nigeria, and we’re doing quite a lot to support that effort. You will recall that His Excellency granted a duty waiver last year for certain food items like brown rice, maize, wheat and sorghum to be imported into the country,” Rabiu said in Abuja.
“At the time, food prices were very high; the price of rice last year was about N100,000 per 50kg bag, the price of wheat or flour was about N80,000 for 50kg bag, maize was about N60,000 for 50 kg bag, and pasta was about N20,000 per carton,” he added.
According to the industrialist, hoarders are known to buy commodities like paddy rice during harvest season and hold them for months to encourage price hikes, however, the waiver policy frustrated those hoarding food, leaving them with unsold stock.
“The moment the season finishes, the prices 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 ton 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,” Rabiu said.
Adding that: “A lot of those hoarders are crying now and losing money. 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.”
Rabiu revealed that BUA Foods has imported enough rice to sustain Nigerians until the end of the year, which can contribute to crashing rice prices in markets for anyone currently hoarding the commodity.
“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. As soon as the season starts, the farmers will get the price they’ve always gotten, and the price of rice will stay the same, because people will be wary of hoarding. After all, if they hoard, they will lose money,” he said.
He expressed excitement over the decline in food prices, noting that they will continue downward.
Nigerians are currently seeing a crash in rice prices due to a global glut in India, the world’s largest producer of the grain. This glut has bolstered global stockpiles for the second consecutive season and driven rice prices to the lowest in 15 years.
Also, Rabiu attributed the surging cost of cement to the devaluation of the naira, saying that the dollar price is competitive globally.
“One dollar is N1,600. Cement price today, even if you take it at N9,000 per bag, or 20 bags, which is one ton, we are looking at N180,000 per ton,” he said.
“N180,000 is $110, maybe $120 per tonne. There’s nowhere in Africa, or anywhere, that you can get the price of cement much lower than 120 dollars. So, the issue is devaluation of the naira.”
“The devaluation happened two years ago, and it was necessary,” Rabiu said. “We needed to do that. And the price of cement at N9,000 is not high, because it’s about $110, $120. Well, N10,000 may be the retail price.”
“We are paying N15 billion monthly at one of my factories — the Obu plant, for the gas we consume. Two to three years ago, we were paying N5 billion. So, it’s like three times. Our spares, our experts, mining costs and all of that are paid in dollars,” he explained.
