One of Nigeria's biggest industrial groups has put a guaranteed buyer behind a large slice of the country's rice crop. Dangote Rice Limited has signed a Memorandum of Understanding with the Niger State Government for the supply of paddy rice over the next ten years, according to Punch.
The Offtake Commitment
Under the agreement, the company committed to a guaranteed offtake of one million metric tonnes of paddy rice to be supplied by Niger Foods, the state's agricultural company, in support of national food sufficiency efforts, according to MSME Africa. Guaranteed offtake matters in a sector where farmers have repeatedly been left holding unsold grain, since a fixed buyer removes the risk that a good harvest ends in a price collapse.
Farms and a Mill to Match
The Chairman of Niger Foods, Sammy Adigun, said the state would be required to develop 25,000 hectares of commercial rice farms under the partnership, an initiative running for ten years that is expected to create about 50,000 direct jobs, Punch reported. On the processing side, the Regional Director and Senior Adviser to the Dangote Group's President and Chief Executive, Fatima Wali-Abdurrahman, said construction of the 32 tonnes per hour Dangote Rice Mill on a 30 hectare site at Wushishi was progressing steadily and remained on track for completion, according to The Guardian.
Rice is the staple whose price shapes household budgets more than almost any other, and more milled local supply is the surest route to easing it. FoodPrices Nigeria tracks verified rice prices across Lagos markets, where the results of deals like this are eventually measured.
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