Nigeria’s rice tariff slash sparks concerns over prices, Benin trade routes

The Nigerian government's recent reduction in rice import tariffs to 47.5% could impact prices in local markets and the trans-border rice trade between Nigeria and Cotonou, market participants said April 15.

The Nigerian government announced broad revisions to import tariffs in multiple sectors in a 2026 fiscal policy document seen by Platts, part of S&P Global Energy. The import duty on rice in bulk or quantities over 5 kilograms was reduced to 47.5% from 70%, while the tariff on broken rice was reduced to 30% from 70%.

Tariffs on other products were also adjusted, with raw cane sugar and beet sugar in powder form both saw a reduction to 57.5% from 70%.

"The Cotonou rice market will be watching this new tariff because that could mean importers will prefer to import directly to Nigeria rather than use the Cotonou route," a Cotonou-based trader said.

The trader said that with the new official rate of 47.5%, imports into Benin will be cheaper, but that if importers incorrectly declare it as broken rice, importing into Nigeria will be cheaper.

Meanwhile, a Delhi-based importer expressed skepticism about the impact of lower duties on import volumes, saying that import volumes to Nigeria would depend on the availability of foreign exchange.

"If Nigeria's direct import increases due to lower import duty, it would impact Cotonou local market supply and prices negatively," a Dubai-based exporter said, adding that the situation might lead to exporters keeping their cargo in bonded warehouses for a long period of time.

Pre-election move

A Nigeria-based miller said the move is a pre-election effort to curb inflation, rather than a significant policy change.

"The Nigerian elections are next year in February, and this new policy is a short-term food policy with the government balancing consumer prices versus farmers' incomes," the miller added.

Another local miller said that the 47.5% duty on finished rice would not be immediately disruptive to the market, but noted that the reduction in broken rice could be problematic, or a policy error.

Platts, part of S&P Global Energy, assessed the West African parboiled rice breakbulk price at$414/metric ton on April 15, amid a spike in freight rates due to knock-on effects of the Middle East conflict.

A third miller said this new reduction is coming at the wrong time, with the industry adjusting to a major shock and prices at multi-year lows.

"The government will have to give better options to farmers on seeds, agrochemicals, and fertilizers to lower paddy prices; otherwise, local production of rice in Nigeria will die," the third miller said.

The third miller said that although the new fiscal policy says it will provide support for local industries by reducing tariffs on machinery, that does not have an immediate impact on already existing rice mills, for example.

A Nigeria-based trader said that importing brown rice and milling it in Nigeria is not an easy task, so a reduction on its imports is not as concerning as a reduction on broken rice imports, where chances of misdeclaration while importing are high.