Dealers Crash Price of 50kg Bag of Rice as Farmers Scale Back Farming
- Falling rice prices in Nigeria lead farmers to reconsider production ahead of the 2026 planting season
- Over 60 rice mills have closed as local producers struggle to compete with cheaper imports
- Nigeria faces a looming food security crisis with rising reliance on imported rice amid local farming decline
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The price of a 50kg bag of rice is falling across Nigeria as a surge in cheaper imported grains reshapes the market, forcing local farmers to scale back production ahead of the 2026 planting season.
At the heart of the crisis is a steep decline in paddy prices. The cost of a ton of paddy has plunged by 51 per cent to about N350,800, down from a peak of N720,000 in 2025.
Source: Getty Images
The sharp drop, driven largely by rising imports and smuggling, has left many farmers struggling to break even.
Meanwhile, a market survey by Legit.ng confirmed that the price of the commodity fell to N56,000 per 50kg bag, down from N61,000 during the Easter period.
Dealers attributed the surge in imported grains to the recent tariff cut by the federal government.
For a country where rice remains a staple food for millions of households, the development signals both relief for consumers and deepening distress for producers, a BusinessDay report said.
Farmers pull back across key producing states
The impact is already visible in major rice-producing regions. In Kebbi State, widely regarded as Nigeria’s leading rice hub, fewer than 30 per cent of over 500,000 farmers cultivated rice during the just-concluded 2026 dry season.
According to industry sources, many farmers are now reconsidering participation in the upcoming wet season due to weak demand and unsold stock from previous harvests.
“They are pulling back,” said Muhammed Augie, a former leader of the Rice Farmers Association in Kebbi, noting that many producers are still holding onto unsold paddy because of a shrinking local market.
Farmers are increasingly diversifying into alternative crops such as sorghum, soybean, and sesame, which currently offer better returns.
Production decline looms
The slowdown is expected to extend into the next farming cycle. A March 2026 report by the United States Department of Agriculture projects Nigeria’s rice cultivation area will drop by seven per cent to 4.2 million hectares in the 2026/2027 season, down from 4.5 million hectares.
The report links the decline to a combination of falling prices, rising production costs, and persistent insecurity in key farming regions.
Despite growing consumption, low profitability continues to discourage farmers from expanding production, creating a paradox in Nigeria’s food system.
Rising costs, collapsing mills
For many farmers, the economics no longer add up. Musa Idris, a rice farmer in Jigawa State, said he has drastically reduced his cultivation from 50 hectares to just five.
“It is getting costlier to produce and sell at a profit,” he explained, adding that the two mills he previously supplied have shut down since 2024.
The collapse of rice mills is becoming widespread. Industry stakeholders estimate that over 60 mills have ceased operations, unable to compete with the influx of cheaper imported rice.
Why local rice struggles to compete
Nigeria’s rice industry faces structural challenges that make it difficult to rival foreign competitors.
Producers in countries like India, Thailand, and Vietnam benefit from economies of scale, integrated production systems, and government-backed infrastructure.
By contrast, Nigerian millers operate in a high-cost environment, providing their own power, water, logistics, and security.
Peter Dama, national chairman of the Rice Millers Association of Nigeria, said these conditions put local operators at a severe disadvantage.
“We generate everything ourselves, while foreign competitors get these at little or no cost,” he said. “It makes competition extremely difficult.”
Imports surge, smuggling persists
The pressure has intensified with a renewed surge in rice imports. Nigeria imported over 60,000 metric tons of rice from Thailand in the first five months of 2025, the highest level in nearly a decade.
Market surveys across Lagos show a growing presence of foreign parboiled rice on traders’ shelves, often preferred for its perceived quality and lower price.
Experts attribute the trend to multiple factors, including porous borders, strong consumer preference for imported varieties, and government policies aimed at easing food inflation.
Recent fiscal measures reduced import duties on bulk rice to 47.5 per cent from 70 per cent, while duties on broken rice were cut to 30 per cent.
Analysts warn that these changes could further accelerate the influx of cheaper imports.
Food security at risk
While falling rice prices may provide short-term relief for consumers, the long-term implications are troubling.
Nigeria still faces a significant supply gap, with annual demand estimated at 7 million metric tons of milled rice, compared to local production of roughly 4.6 million metric tons.
Source: Getty Images
As farmers retreat and mills shut down, the country risks becoming increasingly dependent on imports, undermining years of investment in domestic production.
For policymakers, the challenge now is clear: balance the need for affordable food with the urgent task of sustaining local agriculture before the industry slips into deeper decline.
Rice hits N61,000 as food prices surge
Legit.ng earlier reported that food prices across Nigeria have climbed sharply ahead of Eid al-Fitr, as a mix of Ramadan demand and rising logistics costs puts pressure on household budgets.
Market surveys conducted in Lagos show that staple items commonly used for popular meals like jollof rice and stew are now significantly more expensive than they were at the start of 2026, signalling a reversal of the brief period of easing inflation recorded earlier in the year.
The cost of rice, a key staple for many households, has risen noticeably. A 50kg bag now sells for about N61,000, up from an average of N56,000 in January, with variations depending on brand and grain quality.
Source: Legit.ng
