Rice processing cost: Consumers to pay more as millers groan

Rice millers in the country are currently battling the rising cost of diesel, petrol and erratic electricity supply.   The situation has pushed the cost of processing rice at the mills to an unprecedented level, and this may translate to an increase in the final product in the market.   Russia-Ukraine war: Ban export of […]

Rice millers in the country are currently battling the rising cost of diesel, petrol and erratic electricity supply.  

The situation has pushed the cost of processing rice at the mills to an unprecedented level, and this may translate to an increase in the final product in the market.  

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Findings in the market showed that a 50kg of milled rice, which some months ago sold between N25,000 and N28,000, now goes up to N32,000 for some of the popular brands, as at the time of this report.

For weeks now, power supply across the country has been epileptic and some small scale millers who mostly operate during the day are now forced to stay awake anytime of the night to use electricity anytime it comes.

Major millers who rely heavily on diesel to run their factories also face exceptional increase as the product has now reached a record high of N600 per litre. In some places, reports showed it goes for up to N650.  

“The cost of moving the rice by trucks to the mills has now increased enormously, the same thing with the cost of running the machines at the factory.  You know that most of the big trucks and the power generating plants at the factory use diesel and that product has gone up significantly. If you want to rely on electricity, you won’t see any rice at the market. Even the small millers use diesel most of the time because electricity supply is a big issue,” a medium scale rice processor, Alhaji Sani Yakubu, said.  

Our correspondents across the country report that processors are lamenting a situation that will push up the price of rice in the market.  

In Taraba State, rice millers have decried high cost of diesel and poor power supply.  

They said cost of production had increased, leading many of them to suspend production.  

Alhaji Ali Sarkin Noma, owner of Ganzaki Rice Mill in Jalingo, told Daily Trust on Sunday that a litre of diesel now sold at N600, as against N400 few weeks ago.  

He said there was also the scarcity of diesel and poor power supply from the national grid.  

Sarkin Noma explained that consumers of locally processed rice would pay more because of the increase of diesel and paddy rice.

According to him, they purchase paddy rice from markets across the state and transport fares are up.

He said a 50kg bag of locally processed rice was sold at N23,500 before the increase of diesel, and now, millers have no option than to increase their prices in order to remain in business.

Musa Garba, another miller, also told Daily Trust on Sunday that he reduced his production level from 600 bags of paddy rice to about 100 bags daily because of high cost of diesel and poor power supply.

He said consumers of locally processed rice would pay more if the current trend of high cost of diesel was not addressed.

A large-scale irrigation farmer, Yahaya Mafindi, said many rice farms had dried because farmers could not afford to buy both diesel and petrol to water their rice farms.

Yahaya Mafindi stated that rice millers got supply of paddy rice from irrigation farmers this time and many farmers are unable to fully cultivate their farm, which means there will be less paddy rice for the millers.

Meanwhile, findings revealed that a liter of petrol is now sold at N300 while diesel is sold at N600 in Jalingo.

In Kano State, it was gathered that all the three categories of rice mills operating in the state are virtually affected by the ongoing fuel scarcity. The mega, medium and small scale mills in the state are all complaining about the current fuel scarcity.

According to the proprietor of Premier Rice Company, Ilyasu Nazifi, an engineer, many rice mills are running on diesel, which is currently selling at N500 per litre, which he said had made production very expensive. He explained that the fuel hike in price and its scarcity had affected not only production but other logistic aspects of the rice value chain.

He further revealed that the price of rice had not changed as rice has been one of the main stabled commodities in the country. He, however expressesed worry that rice mills would be left with no option than to increase the price should the hike and scarcity persist longer than necessary.

He called on the authorities concerned to arrest the situation before it gets out of hand and result in an increase in the price of milled rice.

It was also revealed that most rice mills across the state are really finding it very difficult to keep the business going due to issues surrounding the current fuel scarcity.

Malam Hannafi Alhassan, an operator of a small rice mill in Mariri Kumbotso Local Government of Kano State, said he had to increase the processing charges per bag of paddy to N3,000 from N2,500 due to the hike in the prices of diesel and petrol, as well as its scarcity. 

Another small-scale rice mill operator Habu Baffa Kiru said he had stopped milling for the mean time pending the availability of diesel, as he claimed he could not afford to continue milling with the current price of diesel.    

The situation is not different in Katsina State as the situation resulted into lean revenue for the millers in recent months.  

Alhaji Mustapha Mu’azu Maiauduga, the manager of Beto Rice in Malumfashi, said that unlike before, people were less patronizing their packaged rice ostensibly because of the price.  

“The assumption of every Nigerian is that when rice is locally produced and milled, its price has to come down, but unfortunately we cannot sell a 50kg of milled rice less than N22,000 due to surge in the cost of production. Diesel is now over N400 a litre and there is no consistent electricity supply to operate our machines,” he said.

Another rice miller in Funtua, Abdulrazaq Isma’ilm said because of high cost of production they had since resolved to operate as service providers. 

“We now don’t mill rice for sale directly here; rather, we mill for individual consumers and rice sellers who bring in their paddy. This, in our consideration, is more profitable to us as we only charge N2,500 per bag of paddy rice. We have regular customers across Faskari, Kankara, Funtua, Bakori and Danja local government areas,” he said.

On whether they operate on diesel or electricity, Abdulrazaq said for the business to be sustained one would be on electricity, otherwise cost of diesel would force the business to fold up.’

Daily Trust on Sunday observed that people from far and near now prefer to go for local rice sections of Dandume, Funtua or Bakori to make choice of the stable instead of going for the packaged one which now costs above N22,000 per 50kg.

Rice millers in Kaduna State are also expressing worry over what they described as high cost of production due to poor and epileptic power supply, as well as the scarcity and high cost of petrol and diesel.

Our correspondent reports that small-scale processors who rely on firewood for the parboiling process of paddy rice say a ban on tree felling in Kaduna State has equally impacted on production cost which has resulted in the high price of rice in the market.

Imam Saidu, who operates a local rice mill in Kaduna, described the situation as sad, saying that rice, one of the major staple foods in Nigeria, is now becoming unaffordable for low income earners. 

He said the rice sector, like other agricultural sectors, was debased by security and infrastructural challenges, as well as economic challenges.

“Our farmers are unable to produce the required paddy rice because of the insecurity in most parts of the rice producing states. Now, with the little we are able get from farmers, the cost of processing the rice is now high because our machines work on diesel since the government’s power is inefficient and unreliable, especially at the moment,” he said.

Daily Trust on Sunday gathered that epileptic power supply, coupled with scarcity and high cost of petrol and diesel, has surged the price of rice in the market. Our correspondent gathered that a bag of 50kg of rice which sold at N22,000 late January is now sold at N27,000. 

Also speaking in Kaduna, Alhaji Idris Sarkin Alhazan Rigachikun, a local miller said, “We used to process and bag each 50kg of rice at N2,200, but we now do it at N3,000. There is no electricity, so we have fallen back on the generating set, and you know the present situation in Nigeria.”

By Vincent A. Yusuf (Abuja), Lami Sadiq (Kaduna), Magaji Isa Hunkuyi (Jalingo), Ibrahim Musa Giginyu (Kano) & Mahmoud Idris (Katsina)