Nigeria’s rice import will drop by 3.3 per cent to 2.9 million tonnes this year, a report released on Friday by the Food and Agricultural Organisation has said.

China, which was the world’s biggest importer of rice last year along with Nigeria, would raise its import volume by 5.2 per cent to 3.2 million tonnes in 2015 due to higher demand in the mainland, the FAO said in its rice market monitor report for April.

Last year, China and Nigeria each bought three million tonnes of rice from abroad.

According to the United Nations food agency, the global milled rice trade this year is forecast to drop by 2.5 per cent from 2014 to 41.3 million tonnes, due mainly to good stockpiles or higher production in Asia.
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Global paddy output in 2015 is forecast to edge up 1.1 per cent from last year to 749.8 million tonnes, the UN agency said.

Thailand is expected to be the world’s largest rice exporter this year with shipments of 11.2 million tonnes, followed by 9.3 million tonnes from India and 6.5 million tonnes from Vietnam.

As such, the three Asian nations would account for a combined 65 per cent of the world’s rice trade, down slightly from 68 per cent last year.

The FAO revised up India’s rice exports last year to 11.3 million tonnes from 8.2 million tonnes estimated earlier, making it the world’s largest exporter in 2014, followed by Thailand with 11 million tonnes and Vietnam with 6.5 million tonnes.

Nigeria’s purchases abroad are forecast to drop by 3.3 per cent to 2.9 million tonnes in 2015.

Rice output in China, also the world’s top producer, had been forecast to edge up 0.2 per cent to 208.5 million tonnes this year, the FAO said.

President Goodluck Jonathan had in January this year said rice farmers across the country had a new lease of life due to the transformation taking place in the sector.

He said over six million rice farmers had received improved rice seed varieties, boosting domestic rice production by an additional seven million metric tonnes.

He had said, “The rice revolution is taking place across the country, from Kebbi, Kano, Kaduna, Katsina, Zamfara, Sokoto, Bauchi, Gombe, Niger, Kogi, Ogun, Ekiti, Ebonyi, Rivers, Anambra, Delta, Edo to Bayelsa State. High quality Nigerian rice is now competing favourably with imported rice in the markets.

“Our rice millers have taken advantage of these new opportunities, and the number of integrated rice mills has expanded from one at the beginning of this administration, to 24 today.”

The President also read the Riot Act to rice importers, saying all those owing the nation rice import duties must pay, no matter how highly placed.

He said under no circumstance would he allow rice importers to hold the nation to ransom.

“Nigeria our dear country will not be held hostage by rice importers. There will be no sacred cows under my watch. All those owing Nigeria on rice import duties must pay,” Jonathan said.
http://www.punchng.com/business/nigeria-to-import-2-9-million-tonnes-of-rice/

Nigeria has no comparative advantage in producing rice. All this self sufficiency na wash.

Being self sufficient in food won't end hunger. Why? Because the primary cause of hunger is not a lack of food. It is a lack of money.

There is plenty of food in the market but are many not still hungry?

grandstar:
Nigeria has no comparative advantage in producing rice. All this self sufficiency na wash.

Being self sufficient in food won't end hunger. Why? Because the primary cause of hunger is not a lack of food. It is a lack of money.

There is plenty of food in the market but are many not still hungry?

No comparative advantage? Is that an off the cuff remark or do you have any data,Facts and figures.
Question two do you need to have a comparative advantage if you are producing for local consumption only

The top ten rice producing countries are
China
India
Indonesia
Bangladesh
VietNam
Philipines
Thailand
Myanmar
Brazil
Japan

Rice is very labour intensive and therefore better produced in poor countries with very cheap labour

omonnakoda:
No comparative advantage? Is that an off the cuff remark or do you have any data,Facts and figures.
Question two do you need to have a comparative advantage if you are producing for local consumption only

If you have comparative advantage in producing something, you won't be afraid of foriegn competition. You wont have to put high import duties to discourage imports.

Look at yams. look at plantain. look at pepper.

The Thai's, Indians and Vietnamese especially are very productive in producing rice. Its an all weather crop to them just like yam is to us.They will always produce rice even if they do not export it.

China was previously self sufficient in rice production but due to rising prosperity, many farmers have left the land and gone to the cities and land in China is quite expensive. So they are now forced to import. They are losing the edge they had due to rising prosperity.

When I saw Rivers and Delta amongst states producing rice then it became clear that we have been scammed.

grandstar:
Nigeria has no comparative advantage in producing rice. All this self sufficiency na wash.

Being self sufficient in food won't end hunger. Why? Because the primary cause of hunger is not a lack of food. It is a lack of money.

There is plenty of food in the market but are many not still hungry?

you are half right...

But what if you have money and no food on ground? Have you heard of famine?
No?

Nigeria can be self sufficient in rice production. Na irrigation go do the work
And ma only govt fit provide that on a large scale. Unfortunately for us, our govt is unreliable and a fan of wastage!

SLIDEwaxie:
you are half right...

But what if you have money and no food on ground? Have you heard of famine?
No?

Nigeria can be self sufficient in rice production. Na irrigation go do the work
And ma only govt fit provide that on a large scale. Unfortunately for us, our govt is unreliable and a fan of wastage!

What do you mean by famine?

Saudi Arabia is in a perpetual state of famine. Like most gulf states, it import over 80% of its food.

In a large part of Australia, they suffered drought for several years, It was so bad that citizens were told to restrict washing of their cars!
Yet, we heard none of it because less than 5% of them are farmers and people buy food from grocery shops. In these countries, you will think food grows in the supermarket.

Nigerians ate best during the oil boom era when we were heavy importers of food because people were better of then.

Quote me: Nigeria will never be self sufficient in rice production! Indonesia had tried for years and never succeeded. But the Indonesians have succeeded well in palm oil

Focus on where you have comparative advantage and you won't regret it

lt is still a shame while there are idle hands and land.

grandstar:


If you have comparative advantage in producing something, you won't be afraid of foriegn competition. You wont have to put high import duties to discourage imports.

Look at yams. look at plantain. look at pepper.

The Thai's, Indians and Vietnamese especially are very productive in producing rice. Its an all weather crop to them just like yam is to us.They will always produce rice even if they do not export it.

China was previously self sufficient in rice production but due to rising prosperity, many farmers have left the land and gone to the cities and land in China is quite expensive. So they are now forced to import. They are losing the edge they had due to rising prosperity.

I can see you are sounding off in typical Nigerian fashion on things you have ,to put it politely ,not researched. Agricultural production is a very political issue all over the world. In Thailand for example the government has spent billions of dollars in subsidies to support rice farmers for decades. This is the same with different crops all over the world whether in the European Union or the United States.

In 2014 China spent $261 billion on farming subsidies you can guess what the number one crop in China is. That is at today's prices more than 6 years of Nigeria's oil revenue on subsidizing farmers in 2014. and that figure is increasing by 10% this year.
As far as the farming conditions are concerned, rice is essentially a GRASS and the optimal conditions for its growth are swampy or water logged soils. Rice production has NOT dropped in China and so your attribution to farmers leaving the land is bunkum. The real issue is that rice production has been increasing in China but not kept up with population and there are competing uses for land which is a finite resource.

Many countries produce food whether or not they have comparative advantage for several reasons including creating employment and also to ensure security . Agricultural subsidies are one of the most contentious issues at the World Trade Organization. The reason that organization exists is because countries always try to outsmart each other.
Food can be used and is used to exert pressure on nations as we see increasingly.
When any poor country enters IMF programmes that is one of the first thing they are forced to cut while their own farmers enjoy unlimited patronage of government money.Then they come and sell us the theory of comparative advantage.There is a textbook world and a real .
Nigeria has everything to be self sufficient in rice production,don't let anyone pull the wool over your eyes.
When a country that produces rice lend you money and tells you not to subsidize your farmers but subsidize their and then turn around to tell you you don't have comparative advantage something is fishing fishy. I call that Iwealanomics

http://www.ft.com/cms/s/0/644225ee-e3f5-11e2-b35b-00144feabdc0.html#axzz3X59yIdZu



July 17, 2013 2:52 pm
Thai farm subsidy creates rice mountain

By Emiko Terazono

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/644225ee-e3f5-11e2-b35b-00144feabdc0.html#ixzz3X5AiD3l3

Europe has had its butter mountain and wine lake. Now the Thai government is sitting on a rice hoard large enough to supply half of global imports for a year – and traders fear a price collapse as it starts to sell.

Bangkok’s rice buying policy, designed to boost farmers’ incomes, has led to a stockpile of 17m-18m tonnes. With the new crop set to be harvested in October, the Thai government needs to dispose of its existing inventory to raise money for the new purchases.

Rice market experts are on high alert as Bangkok could issue tenders for about 350,000 tonnes of its rice as early as next week. Concepción Calpe, senior rice analyst at the Food and Agriculture Organisation in Rome, warns the effects on world prices could be serious if Thailand floods the market with its rice.

More
On this story

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beyondbrics Rice policy costs Thais export crown
Thai rice exports set to plunge
beyondbrics Thai rice plan risks boosting world price
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“It could potentially have catastrophic consequences,” she said.

Bangkok has been buying rice from farmers at about 40 to 50 per cent above market prices, leading to state losses of $4.4bn during the crop year to September 2012, the government said.

The populist purchasing scheme has alarmed international economists and debt analysts, prompting credit rating agency Moody’s to warn last month that the “increasingly expensive” scheme was negative for Thailand’s sovereign ratings. The losses from the policy “increase the difficulty of the government’s task of reaching its goal of a balanced budget by 2017”, said Moody’s.

Following the Moody’s report, Prime Minister Yingluck Shinawatra quickly replaced the minister of commerce in charge of the rice purchase scheme, and the government announced that the official rice buying price would be cut by 20 per cent. However, after protests by farmers, it quickly reversed its decision, triggering volatility on the rice markets.

Thailand has long prided itself as the world’s leading rice exporter but the scheme, which replaced a direct farmers subsidy after Ms Yingluck came to power in 2011, has hit its overseas rice sales. The state-supported prices have made the country’s rice exports uncompetitive compared with those of other producers including India and Vietnam, and Thailand fell from its top spot last year to third place.

Thailand’s overseas sales plunged 35 per cent to 6.9m tonnes in the 2011-12 crop year, while India, which relaxed its export restrictions in 2011, exported a record 10.3m tonnes of rice in 2012, making it the largest exporter for the first time.

Thitinan Pongsudhirak, a professor at Chulalongkorn University in Bangkok, believes that the rice buying scheme has been a “disaster” for the country. “Fundamentally it’s a poorly conceived policy. It’s unsustainable and not tenable in the long term,” he adds.

Bangkok’s artificially high official purchase prices have led to allegations of fraud, with some farmers accused of passing off lower grade rice as high quality stock, as well as claims of traders smuggling of cheaper rice from neighbouring Cambodia and Myanmar into Thailand.
"It’s a poorly conceived policy. It’s unsustainable and not tenable in the long term"

- Thitinan Pongsudhirak, professor Chulalongkorn University
Tweet this quote

The policy has also meant that the country’s rice price, long a global benchmark, is no longer used by institutions such as the FAO and the Organisation for Economic Co-operation and Development, which have instead started to use the Vietnamese rice price in their reports.

“[The Thai government] has completely distorted the market,” says Ms Calpe of FAO.

Bangkok is not alone in facing the unintended consequences of farming subsidies. Europe’s common agricultural policy led to overproduction, while India is currently struggling to get rid of its massive state wheat stockpile.

“Every country creates its own demons,” says Rahul Bajoria, regional economist for Barclays in Asia.

Yet critics of the ruling Puea Thai party points out that it has put itself in a position where it cannot pull back from its populist pledges even as they add to the fiscal burden.

As well as the rice buying programme, Ms Yingluck, the sister of the exiled former leader Thaksin Shinawatra, introduced a minimum wage and subsidy schemes for first-time car and home buyers. Earlier this year, she also announced an ambitious plan to invest $66bn in infrastructure development projects.

With elections expected to be called next year, the government needs the support of the country’s rice farmers, especially those in the northeast of Thailand, who are the ruling party’s natural supporters, says Romen Bose, analyst at country risk consultancy IHS.

The Thai rice hoard could yet grow larger.

omonnakoda:
I can see you are sounding off in typical Nigerian fashion on things you have ,to put it politely ,not researched. Agricultural production is a very political issue all over the world. In Thailand for example the government has spent billions of dollars in subsidies to support rice farmers for decades. This is the same with different crops all over the world whether in the European Union or the United States.

In 2014 China spent $261 billion on farming subsidies you can guess what the number one crop in China is. That is at today's prices more than 6 years of Nigeria's oil revenue on subsidizing farmers in 2014. and that figure is increasing by 10% this year.
As far as the farming conditions are concerned, rice is essentially a GRASS and the optimal conditions for its growth are swampy or water logged soils. Rice production has NOT dropped in China and so your attribution to farmers leaving the land is bunkum. The real issue is that rice production has been increasing in China but not kept up with population and there are competing uses for land which is a finite resource.

Many countries produce food whether or not they have comparative advantage for several reasons including creating employment and also to ensure security .Food can be used and is used to exert pressure on nations as we see inreasingly

Many thanks for exposing some interesting facts to me.

I have secretly wondered how Thailand was able to be an exporter of rice. The cat is now out of the bag. I have long known about China's ridiculous determination to be self sufficient in food production despite having 20% of the worlds population but 7% of the world's arable land.

The question is: are these subsidies fair? Because something is done does not make it right.

Economists have always condemned these subsidies. They are the primary reasons why world trade talks always end in deadlocks because countries either do not want to open up their agric sectors and allow in heavily subsidised crops or that countries refuse to remove these subsidies.

These subsidies cause huge imbalances in world trade. Without the subsidies, Thailand would be a net importer of rise assisting greatly its poorer next door neighbour Vietnam. They should not be competitors.

China's huge trade imbalances especially with America was one major factor that plunged the world into a serious recession. A huge cut in these subsidies will help reduce the trade imbalance with many countries.

America's $3billion a year subsidies to its cotton farmers once pauperized West African farmers. It is sad.

And as you said its really a political issue.

Many governments will like to reduce or get rid of these subsidies but the interest groups that benefit from it fight tooth an nail to protect them. French farmers are infamous for going berserk when the touchy issue of subsidy reduction is being discussed. American senators from where food are produced always lobby for maintaining these subsidies in order to "protect" their farmers and win votes.

grandstar:


Many thanks for exposing some interesting facts to me.

I have secretly wondered how Thailand was able to be an exporter of rice. The cat is now out of the bag. I have long known about China's ridiculous determination to be self sufficient in food production despite having 20% of the worlds population but 7% of the world's arable land.

The question is: are these subsidies fair? Because something is done does not make it right.

Economists have always condemned these subsidies. They are the primary reasons why world trade talks always end in deadlocks because countries either do not want to open up their agric sectors and allow in heavily subsidised crops or that countries refuse to remove these subsidies.

These subsidies cause huge imbalances in world trade. Without the subsidies, Thailand would be a net importer of rise assisting greatly its poorer next door neighbour Vietnam. They should not be competitors.

China's huge trade imbalances especially with America was one major factor that plunged the world into a serious recession. A huge cut in these subsidies will help reduce the trade imbalance with many countries.

America's $3billion a year subsidies to its cotton farmers once pauperized West African farmers. It is sad.

And as you said its really a political issue.

Many governments will like to reduce or get rid of these subsidies but the interest groups that benefit from it fight tooth an nail to protect them. French farmers are infamous for going berserk when the touchy issue of subsidy reduction is being discussed. American senators from where food are produced always lobby for maintaining these subsidies in order to "protect" their farmers and win votes.

If you are talking of fairness that means you are buying into the myth of free trade and all of that. Countries act in their national interest first and foremost.In the same way that parents protect the interests of their children. There never was and never will be an economic free for all. Food is also a weapon so no wise country will allow itself to be dependent on others in the name of playing fair.That would be naive in extremis. Concepts like Comparative advantage and all that are MODELS. They help us to understand reality but are far from reality. Let us take something as simple as rifles and bullets. Should a country depend on a potential enemy for those in the name of comparative advantage? See how Nigeria was jumping from pillar to post recently looking for where to buy weapons.

FYI Nigeria was colonized by the Royal Niger Company which was essentially a company with a private army and British support.That company is today Unilever. They came those days in the name of "trade"