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Rice sellers blame low patronage on smuggling

By on September 12, 2015

The volume of rice entering Nigeria from Cotonou, Republic of Benin, has increased and local dealers are complaining about their inability to compete.

According to a dealer who spoke with our correspondent, rice that comes in from Cotonou is about N300 cheaper than the rice sold locally.

Rice, Nigeria’s staple food, has been a major issue in the past few months.

The Central Bank of Nigeria had in June issued a directive stopping the sale of foreign exchange to importers of rice and 40 other items through the interbank forex market.

The apex bank in a circular hinted that the move was aimed at conserving forex and boosting local production.

Our correspondent gathered that rice importers currently access forex from the black market at the rate of N226 to a dollar as against the official exchange rate of N196 to a dollar.

A major rice importer, who spoke on condition of anonymity, said the move had been encouraging smuggling of rice through the Cotonou border which, according to her, had hit an all-time high lately.

The importer said Nigerian importers were negatively affected by the development, noting that while they brought in rice at 70 per cent duty and also coped with high forex rates, smugglers sneaked in the commodity at lower cost.

She said, “They are just punishing us for nothing. The whole thing cannot work.

“Trailers of smuggled rice are still offloading every morning at major rice sales depots.”

A source from Daleko market, a major rice depot in Lagos, confirmed her reports.

The source, one of the rice traders, told our correspondent that rice was becoming more expensive every day adding that some traders were now compelled to join others in receiving supplies of smuggled rice since the ones supplied by local importers were becoming expensive and buyers were shunning them in favour of the cheaper ones.

“A bag of Cotonou rice sells for N8,300 while a bag of refined rice supplied by importers sells for N8, 500.

“Customers cannot spot the difference between the two, except that one is cheaper and they naturally prefer the cheaper version.

I have lost many customers because of the decision not to patronize smuggled rice, so I have changed course, I now mix my imported rice with Cotonou rice,” the source said.

The President, Rice Traders Association of Nigeria, Mrs. Olufunmilayo Olufunke, confirmed the report in an interview with our correspondent.

She said the local traders were complaining bitterly that rice supplied by importers was more expensive than rice brought in from Cotonou.

Olufunke, who is also the Iyaloja (market leader) of Iddo market, said she had prevented people in her market from selling Cotonou rice and the instruction was eliciting a lot of complaints from traders who said they were finding it increasingly hard to compete with sellers of Cotonou rice.

Nigeria recently adopted the ECOWAS Common External Tariff which allows free movement of goods at a uniform tariff within the ECOWAS sub-region.

The PUNCH learnt that some importers of the commodity, in an attempt to escape the high tariff imposed on rice by the government, had taken advantage of the CET and diverted their cargo to Cotonou where duties on rice were lower.

From Cotonou, the commodity is brought into Nigeria and passed off as rice originating from that region.

“The volume of rice coming through that region has increased up to 98 per cent. Everywhere you go in Nigeria, you are bound to see Cotonou rice,” a source from Olam Rice who also pleaded anonymity said.

“You will find them in Ibadan, Port Harcourt, Abuja, Ilorin and Badagry.

“The bags come in varying labels which the importers keep changing every week. The labels on the bags are never consistent.”

A rice importer, Mrs. Uju Isaiah, suggested the establishment of a task force whose members would be rice importers.

According to her, members of the task force will be able to spot rice smugglers by going to the major rice depots.

She said, “We know the people who are genuine rice importers; the government will not be able to stop smuggling. we are the people who can stop the practice because we can spot rice smugglers in the various markets if we constitute a task force that can move from one market to the other.”

Olufunke also supported the idea of setting up a task force. She however cautioned that the importers would be the best people to do that and not traders.

“The traders don’t like anybody telling them not to sell smuggled rice. So if any of us tries to set up a task force to stop smuggling, the traders will oppose the move.”

Meanwhile, the Comptroller of Customs in charge of Information and Communication Technology Unit,   Mr. Terseer Aber, has said the service is closing in on rice smugglers.

He told our correspondent on the sidelines of NCS forum on e-registration that smugglers were being isolated through the process of e-registration.

 

[Punch]