‘We will keep crashing rice prices,’ BUA Chairman Rabiu warns hoarders.
Abdul Samad Rabiu, Chairman of BUA Group, has committed to further reduce the prices of rice and other basic goods, which he claims have already dropped over the last year.
He praised President Bola Tinubu for providing a waiver on imported food goods, claiming that his “foresight” helped to reduce food prices in the country.
The Tinubu administration stated in July 2024 that customs charges on imported food goods would be suspended in order to reduce food inflation.
Rabiu told State House Correspondents after meeting with President Tinubu on Thursday that BUA Foods took advantage of the policy and was able to import a large amount of wheat, maize, and rice.
“Food prices were really high last year. For example, rice costs almost ₦100,000 for each 50-kilo bag. The flour was about ₦80,000 per bag, maize was about ₦60,000 per 50-kilo bag, and pasta cost more than ₦20,000 for every carton. So we tapped into that programme, and BUA was able to import a significant amount of wheat, maize, and rice.
“The moment the shipment arrived, we began processing. We drove down the prices of certain of these commodities. Rice prices have decreased from ₦110,000 to approximately ₦60,000. Flour currently costs ₦55,000 for each 50-kilo bag.
“Maize is approximately N30,000. This price decrease occurred as a result of Mr President’s foresight and vision in implementing a one-time duty waiver for six months, which allowed us to lower the pricing of certain items,” Rabiu stated.
The wealthy businessman went on to describe the causes of rising food prices and how the president’s approach helped to reverse the trend.
“So, what has been happening – and many people are probably unaware of this – is that Nigerians, as well as many Nigerian companies, typically purchase a large amount of paddy. That’s a rice paddy. Rice paddy is what is used to process rice. So, as the harvest season begins, many individuals will purchase a large quantity of this paddy and store it for three to four months. When the season ends, the price will double. Many people are unaware of this, yet it has long been a concern.
“That has no effect on the farmer because he is paid four to N500,000 per tonne of paddy. For those who buy and hold for three to four months, the price returns to ₦800,000 when the season ends. This explains why you are receiving N110,000 for every bag. So, when we implemented that intervention, it was a problem for those hoarders. We were in sales at the time of our import, and those orders contained a considerable volume of paddy that they were unable to sell, resulting in a later decrease in price, which has continued to fall.
So many of those holders are currently sobbing and losing money.”
He stated that the Rice Millers Association has banded together to combat the issue of hoarding by some businesses and that the association will not tolerate any of its members stockpiling rice.
“What we’re doing as rice millers is ensuring that rice millers don’t buy and hoard paddy, which is impossible to prevent at the end of the day. However, once they realise that rice is available, they import it because BUA has imported enough rice to last us till the end of the year, for example.
“So they know that if they try to hoard rice and take it up, Bucha would come and crash the price. So I hope rice prices do not rise in the future.
“And I’m confident that as soon as the season begins, farmers will receive the same price as before, and rice prices will remain stable since people will be mindful of stockpiling. If they hoard, they risk losing money. So that’s on rice.
“And once again, let me take this opportunity to praise His Excellency for his foresight and vision because I did not see that. I wasn’t sure if that would work, but we tuned in. We imported, we supported, and now prices are lower. We did this to help the government keep food prices low. And I’m confident prices will fall.
“It’s interesting that when prices were high, say, N100,000, everyone was shouting; now that prices are down or are coming down, it’s as if no one is coming out to say, ‘Look, food prices are coming down, but I’m happy to say that food prices are coming down, and they will continue to fall. That is what BUA Foods is doing to help the government keep food prices down,” Rabiu explained.