Why Rice Prices Are Falling: What It Means For Nigerians

Rice prices in major markets in Lagos have taken a sharp dive, providing much-needed relief for households but triggering losses for traders who stocked up during the price surge earlier in the year.

A 50-kilogram bag that previously sold for between ₦80,000 and ₦85,000 now sells for between ₦55,000 and ₦70,000, depending on the brand and market.

The reduction, which represents as much as 35 percent in some cases, has been recorded across key markets such as Mile 12, Oyingbo, and Arena in Oshodi.

Why Rice Prices Are Dropping

The drop is the result of a convergence of supply and policy factors. Recent import inflows through land borders have increased market supply, following a temporary duty waiver granted by the Federal Government on essential food commodities, including rice.

This policy, combined with fresh local harvests from northern producing states, has flooded the market with both imported and locally milled rice.

Analysts say timing played a crucial role. Many shipments arrived just as traders were holding large stocks purchased at record prices, creating a sudden oversupply. With demand unable to keep pace, market forces quickly pushed prices downward. The relative stability of the naira in recent weeks has also helped reduce transport and import costs, further contributing to the decline.

Who Benefits from the Price Decline

Consumers are the immediate winners. For many Lagos households, the lower prices have brought long-awaited relief from months of food inflation.

“With rice now cheaper, we can finally stretch our budgets,” said a shopper at Mile 12 Market, who noted that the change has eased the strain on family spending.

Restaurants, caterers, and small retailers are also benefiting from reduced costs, allowing them to maintain steady prices or expand sales volumes. Retail traders who depend on quick turnover are seeing higher demand as consumers buy more at the lower price points.

Who Bears the Impact

While consumers rejoice, the story is different for wholesalers and local producers. Traders who stocked up when prices were high now face significant losses.

“We’re selling below cost just to recover our capital,” said a dealer at Oyingbo Market.

“The fall was too sudden; many of us are struggling to stay afloat.”

Local rice millers and farmers are equally affected. The influx of cheaper imported rice has weakened demand for domestic brands, forcing some producers to sell at near break-even prices. With input costs still high, from fertiliser to energy, profit margins have thinned dangerously, raising fears that smaller millers could shut down if the trend persists.

What This Means for the Nigerian Economy

The price crash highlights the Federal Government’s ongoing policy dilemma: balancing short-term consumer relief with the long-term health of domestic agriculture. While temporary import waivers have succeeded in easing food prices, they risk undermining Nigeria’s drive toward self-sufficiency in rice production.

Economists warn that if the current glut is not managed, the market correction could reverse once existing stocks are exhausted, especially ahead of the festive season when demand typically spikes. “Nigeria risks eroding years of progress toward rice self-sufficiency if local farmers and millers cannot compete with imports,” said an industry analyst.

To sustain stability, experts are urging a consistent policy direction, one that supports local production while keeping staple foods affordable.

Strengthening storage systems, improving logistics, and ensuring access to affordable credit for farmers remain key to preventing further market shocks.