Speaking to State House Correspondents after a meeting with President Bola Tinubu on Thursday, Rabiu lauded the President's administration for its decision to grant waivers on imported food items. He described this policy as "foresighted" and instrumental in the recent decline of food prices across the country.
It will be recalled that in July 2024, the Tinubu administration implemented a suspension of customs duties on imported food commodities as a strategic measure to combat escalating food inflation.
Rabiu stated that BUA Foods proactively embraced this policy, enabling the company to import substantial quantities of wheat, maize, and rice. He provided a stark illustration of the price fluctuations, noting that the price of a 50-kilogram bag of rice, which stood at approximately N100,000 last year, has now fallen to around N60,000. Similarly, the price of flour has decreased to N55,000 per 50-kilogram bag, and maize now sells for about N30,000, a significant drop from previous highs. Rabiu attributed these price reductions directly to President Tinubu's "foresight and vision" in introducing the temporary six-month duty waiver.
The BUA Group Chairman further elucidated the dynamics that historically contribute to food price surges, particularly concerning rice. He explained that a common practice among some Nigerian companies involves purchasing and hoarding large quantities of rice paddy during the harvest season, holding onto these stocks for three to four months. As the harvest season concludes, the limited availability then allows them to inflate prices significantly, a practice that doesn't necessarily benefit the local farmers who typically receive between N400,000 and N500,000 per ton of paddy at harvest. However, those who hoard paddy can later sell it for as high as N800,000 per ton, ultimately leading to retail prices of around N110,000 per bag of rice.
Rabiu highlighted that the government's intervention through the import waiver disrupted this hoarding strategy. The influx of imported commodities by companies like BUA Foods created competition, forcing hoarders to lower their prices as they struggled to sell their stockpiled paddy. This, he asserted, is why many of these hoarders are currently facing losses.
He also mentioned that the Rice Millers Association is actively working to address the issue of hoarding among its members, aiming to discourage this practice within the industry. While acknowledging the inherent difficulty in completely preventing hoarding, Rabiu expressed optimism that the consistent availability of imported rice, particularly BUA Foods' substantial imports projected to last until the end of the year, will deter hoarding. The knowledge that companies like BUA are ready to release supplies and stabilize prices will make hoarders wary of accumulating excessive stock, fearing potential losses if they try to inflate prices artificially. Consequently, Rabiu anticipates that the price of rice will remain stable at its current lower level, even as the next harvest season begins, ensuring farmers receive fair prices without triggering significant retail price increases.
Rabiu reiterated his gratitude to President Tinubu for his "foresight" and "vision," admitting that he was initially skeptical about the effectiveness of the import waiver but has since witnessed its positive impact on price reduction. He affirmed BUA Foods' commitment to continuing its support of the government's efforts to further bring down food prices.
In a notable observation, Rabiu pointed out the relative silence surrounding the decrease in food prices compared to the widespread outcry when prices were high. He expressed satisfaction in being able to report the positive trend of declining food prices and BUA Foods' role in supporting this development.