Analysts at Africa Exchange (AFEX) have projected a 50% year-over-year rise in paddy rice prices for 2025, citing the likely effects of the 150-day import waiver on food commodities.
This projection is detailed in their Annual Commodities Review & Outlook report, titled “An Uneasy Calm,” published on February 20, 2025.
On July 10, 2024, Abubakar Kyari, the Minister of Agriculture and Food Security, unveiled a 150-day duty-free import window for essential food items, including maize, husked brown rice, wheat, and cowpeas.
This initiative, which waives all duties, tariffs, and taxes to enhance food supplies, was slated to run from July 15 to December 15, with the federal government hoping it would effectively reduce the high cost of food in Nigeria.
AFEX analysts note that the import waiver has allowed major processors to accumulate stocks of paddy rice, temporarily dampening current demand.
However, they anticipate that demand will gradually pick up in 2025, and if import leverages end, it could trigger a substantial 50% increase in paddy rice prices compared to last year.
The analysts also projected a 23% year-over-year increase in sorghum prices. They noted, “Despite an expected 7.6% rise in sorghum volume compared to last year, we anticipate a 23% increase in price due to higher production costs and challenging climate conditions.”
Market trend
Paddy rice began 2024 priced at around N500,000 per metric ton, climbing to a peak of nearly N700,000 between the fourth week of March and the first week of April.
- However, throughout May, prices fell below N600,000.
From May to September, a bullish trend emerged, pushing prices above N900,000 during July and August, before settling back to N800,000 as the import waiver began to ease supply pressures.
In contrast, sorghum has experienced a strong upward surge, starting at N500,000 per metric ton and gaining strong bullish momentum in the Nigerian commodities market.
- By the fourth quarter of the year, sorghum prices spiked to N900,000.
Possible key drivers of the projected surge
AFEX identified several factors likely to influence the price surge of paddy rice, including expected reduced production in 2025 and rising market demand.
- They noted that if rice prices ultimately go against predictions and stabilize in 2025, it could be due to low international demand, moderate opening stocks, and current trade policies.
- Regarding trade policies, they remarked, “Trade policies from key producing regions might provide a stabilizing force for rice market prices.”
For sorghum, analysts highlighted that rising production costs and persistent harsh climatic conditions could significantly affect growth, likely leading to an increase in prices.
