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GeneralLiberia newsON 2ND THOUGHT

On 2nd Thought: Global hike to affect rice Prices in Liberia

-As Liberians brace for price increase

News of the Indian Government announcing an additional 4% export tax on rice could affect an upward adjustment in the price of rice here on the Liberian market this week.

By Othello B. Garblah

The continual surge in food prices on the global market, particularly rice, Liberia’s staple, is expected to cause an upward increase in the commodity’s price locally.

The move comes as India, the world’s biggest exporter of rice, which imposed a 20% export tax on rice in 2022, has announced an additional 4% export tax on rice, bringing it to a total of 24%.

India accounts for more than 40% of global rice shipments. It currently accounts for about a quarter of non-basmati white grain rice exports, mainly consumed in Liberia and other parts of Africa and Asia.

This means that countries such as Liberia, which is heavily dependent on imported non-basmati rice from India, will be forced to increase the commodity’s wholesale and retail prices to avoid a shortage.

In July, last year, experts warned that India’s move could push up global food prices.

“It’s fair to say this will have quite an impact on global food prices,” said Emma Wall, head of investment analysis and research at Hargreaves Lansdown.

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So how prepared is the new Government of President Joseph Boakai?

As this paper has learned, closed-door negotiations are said to be ongoing back in Liberia between the government of Liberia, through the Ministry of Commerce and Industry, and rice importers to find an amicable solution that will see a minimum increase.

These negotiations are coming on the heels of a similar request made to the previous regime by Rice Importers.

In October last year, Rice Importers sent a letter to the Weah administration requesting an increase in the price of rice from $17.50 to $20. Their request, which came just around the 2023 elections, was not honored due to the political situation at the time.

This paper has gathered that in February of this year, the importers wrote a similar letter to the new administration outlining the reasons for their quest for a price increase.

They cited the imposing of an additional 20% charge, lengthened shipping routes through the Suez Canal due to the war in the Middle East, and increased transportation costs from APM Terminal, Med-Tech, NPA, LRA, etc.

However, sources say, unlike previous regimes, which provided subsidies to the tune of tens of millions to rice importers to keep the price of rice here low, the Boakai regime has chosen to save the amount spent on rice subsidies to importers on local production.

Sources in the corridor of the Ministry of Commerce said the government, through Commerce Minister Amin Modad, has appealed to the importers not to raise the price due to the new government and the fact that rice is a politically sensitive commodity.

The source further explained that, per the minister’s appeal, the Importers and the Ministry of Commerce agreed at the time to reduce the price of rice to $16.50 while considering long-term investment in local rice production.

The agreement was said to have been contingent on the importers bringing rice and selling it at $16.50 until May while observing if the Indian government would reduce tariffs.

However, on May 14, the importers once again wrote to the government requesting an increase in the price to $21, citing the previous reasons and an additional 4% increase imposed by the Indian government.

The new request, which is said to be under discussion currently, would see the new price of rice set at $18.50, with importers providing different varieties of rice.

The importers were said to have assured the minister that there would be no shortage of rice on the market. They made an initial commitment of $200,000 for local rice production and expressed intentions to increase the investment in the future.

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