West Africa’s Rice Conundrum by Vivek Gahlaut, Co-Founder – Terra Firma Commodities, Dubai UAE

Dubai [UAE], January 18: In West Africa, rice has been a staple food for generations, typically served with curries made from meat, vegetables, or seafood. While the ingredients used with the curries may not seem surprising, the reliance on rice is notable for a different reason.

Many of you would be wondering why it is concerned, so the major reason to be concerned is that nearly 40% of the imported rice consumed in the region, primarily from countries like India, Thailand, Vietnam, and Pakistan, all of which produce surplus rice. This raises an intriguing question: why does a region like West Africa, which has abundant arable land and freshwater sources, continue to depend heavily on imported rice?

The potential for agricultural self-sufficiency in West African nations is evident, notwithstanding their historical struggles with poverty in comparison to their Southern and Eastern African neighbors. Actually, they have more than enough water and arable land to grow all the rice their country needs. Then why is this staple food imported to such a large extent?

One convincing explanation is economic efficiency. When global markets provide a surplus of rice, it might seem more practical for West African nations to import rice while using their agricultural land to grow higher-value cash crops. This strategy could generate much-needed foreign exchange and boost local economies. In fact, this has been the logic driving the import of rice for decades. It’s a business that creates jobs on both ends of the supply chain, ensures affordable nutrition for the local population, and supports a steady flow of rice from exporters to eager importers in the ECOWAS region. As a result, West Africa has become the largest importer of rice globally, accounting for 20% of the world’s rice trade.

Since 2014, Terra Firma Commodities (Co-Founder of Vivek Gahlaut) has been a key player in this trade, especially in markets such as Ivory Coast, Burkina Faso, Mali, and Ghana. The top wholesalers in the area recognise and trust our local rice brands. Before a big disturbance, the system had been running well for years.

India is the world’s leading exporter of rice, and in September 2023, India outlawed the sale of all varieties of white rice other than basmati and as a result of this one event alone, broken white rice to spike by $100-150 per metric ton almost overnight, rising from around $400 to $600-650 per metric ton.  The broken white rice price index jumped from $400 to $600–650/metric tonne in the span of a single trading day, as a result of this one event alone.

This sudden increase made imported rice significantly more expensive than locally grown varieties, and it was unclear whether other rice-producing nations could fill the supply gap left by India’s decision. India’s ban, driven by its own internal concerns, has had a profound effect on the global rice market, and West Africa, as one of the largest importers, has been hit hard.

As a participant in this business, Terra Firma Commodities (Co-Founder of Vivek Gahlaut) has enjoyed reaping the benefits of this trade, with good incentives for owners and company employees alike.  However, the current situation is unsustainable. The rice trade, as we knew it, has been disrupted which clarifies that we can no longer rely on the same model. Our company has decided to invest in the local agricultural ecosystem beyond superficial, transactional interactions in order to engage with the community more thoroughly.

In response to the prohibition, Terra Firma has initiated discussions with West African governments and local cooperatives to support domestic rice production. We’re doing our best to equip farmers with cutting-edge tools, milling equipment, and knowledge about how to grow rice in the most efficient way possible. It may take many years for the region to become self-sufficient, BUT we are taking a step in the right direction!

Our main objective is to find a way out of this dilemma and work towards lasting solutions that will help the people of West Africa and the international rice market. We hope that by collaborating and innovating, West Africa will lessen its reliance on imported rice and establish a more resilient agriculture economy.