The deliberate holding back on imports of rice, thereby creating an artificial shortage of the commodity on the local market to force the government to yield to the demand for price increases, has been the strategic move of rice importers.
Tuesday, September 17, 2024/Rice importers here appear to be playing games with the Liberian Government over the nation’s staple in their bid to increase the commodity’s price on the local market at all costs.
The move follows their failed attempt to pressure the government into increasing the price of a 25kg bag of rice from US17.50 to US20, citing a 2023 20% sub-charge imposed on non-basmati rice exports from India in early February 2024.
As if that was not enough, one of the leading rice importers, K&K, over the weekend alarmed an imminent rice shortage on the local market, citing AMP Terminals Liberia Limited. This company handles shipment at the Freeport of Monrovia of being responsible due to their delay in allowing rice vessels to berth ahead of other cargo vessels.
However, documents this paper picked up on Monday debunk such claims and expose the games rice importers have played over the years in their bid to hike rice prices.
A comparative analysis of the document as it relates to rice imports from January to May year on year shows that each year, the rice importers made a demand for an increase in the price of 25kg rice on the local market, they held back on imports, giving rise to shortages and hikes in the price.
In 2020, for example, between January and May, rice importers brought in 178,905 metric tons of rice. In 2021, during the same period, when they demanded an increase in the price of the commodity, that number decreased from 178905 metric tons to 125,102 metric tons.
During the same period in 2022, rice imports increased slightly compared to 2021 by 39 301 metric tons (164 406 metric tons). In 2023, for the same period from January to May, rice imports were recorded at 240 467 metric tons.
Several factors accounted for the sudden jump in imports. The previous Government bowed to 2022 pressure and handed importers US12 m in the form of a subsidy to avert any crisis ahead of the 2023 elections.
However, in early 2024, rice importers again came back with their demands for another subsidy or an increase, citing both an increase in global food prices and a 20% Indian sub-charge tax on rice exports.
The new administration then refused to grant importers both the subsidy and the additional increase they sought to add.
This translated to a slump in rice imports. Compared to the same period from January to May 2023 and January to May 2024, rice importers brought in 83,056 metric tons.
This means they import in six months, what they imported in just one month in 2023.
The current issue
K&K Management has alleged that the Management of APM Terminals prioritizes cargo vessels over rice vessels, causing unnecessary delays and an increase in other charges after paying their berthing fees in the sum of US1 million. They alleged that these delays may result in rice shortages in the market.
The management said it had passionately appealed to the Management of APM Terminals Liberia to prioritize the berthing of its rice vessel at the port so that they could quickly remove their rice from the vessel for sale on the local market but to no avail.
Officials at K&K say they have made representations to the Management of the Free Port of Monrovia and the Ministry of Commerce and Industry regarding the matter, but they have not received redress for their concerns.
What is the standard procedure at the port?
The document in the possession of this paper establishes an established berthing protocol at the Freeport of Monrovia. This protocol is contained in the concession agreement and public tariff.
According to the document, vessels are expected to be berthed for operations on order of their arrival time unless the Harbor Master or APM Terminal decides otherwise.
This paper gathers that the present K&K consignment was brought into the country in July, after the Fouani and Fouta consignments arrived in May and June, respectively.
The Berthing protocol is as follows:
“Liner vessels (container and Roro) have priority one berth on a first come, first serve basis; Bulk Cargo vessels (wheat, clinker, rice…) and other non-linear vessels that can work in the rain will have priority on one month; Break bulk vessels (bagged rice, bagged cement…) have priority on one berth on first come first serve basis; In case of any conflict, liner vessels (container and Roro) have priority over bulk cargo and break bulk vessels. This is at the discretion of the terminal.”
In the said document, APM Terminals acknowledged that rice importers and bulk vessels face challenges such as demurrage, waiting at anchorage, and long handling times due to bad weather. However, management proposed that it would be cheaper for importers to convert rice from bulk to container.
The bulk-to-container measure was used during COVID-19, helping to reduce costs and address the challenges faced by importers during the rainy season.
Did K&K follow the protocol?
Sources say the late arrival of the K&K consignment puts it behind Fouta and Fuani, which came earlier. Therefore, it would have to follow the first-come, first-serve protocol. Writes Othello B. Garblah
