INTERVIEW: Africa's largest rice mill sees potential in Nigerian rice market amid challenges

Local rice millers in Nigeria have continued to invest in processing capacities to significantly bridge the demand and supply gap; however, the non-availability of raw materials and access to cheap working capital remain the biggest challenges, Palash Jain, cofounder and CEO of Kiara Rice Mills, told Platts in an interview.

Kiara Rice Mills is Africa's largest rice mill, with an annual paddy rice processing capacity of 350,000 metric tons. It only processes locally sourced paddy rice, Jain said.

Rice pricing dynamics in Nigeria, Benin Republic

Globally, the price of rice has plummeted due to a record production in origin markets such as India and Thailand, leading to an oversupply in destination markets and stifling the Cotonou rice market, one of the biggest destination markets for parboiled rice, as the Nigerian government becomes stricter on its border routes.

Platts, part of S&P Global Energy, assessed 5% parboiled CFR Cotonou at $400/mt Nov. 12, $111 lower than the same period in 2024.

"There was so much rice inventory in the Benin Republic that it ended up putting downward pressure on prices here in Nigeria," Jain said.

"Nigeria does not produce enough rice to meet local demand; hence, smugglers benefit from smuggling rice from the Benin Republic, which is sold openly in Nigeria."

Jain said the company's warehouse has rice inventories that could cover over three to four months, and the company makes its own packaging bags made from polypropylene, which account for one of its biggest production costs.

Local rice farming amid Nigeria's mounting insecurity

Rice farming in Nigeria, particularly in the northern regions, faces significant challenges due to the emergence of pockets of insecurity in recent years.

The northern states, which are known for their agricultural potential, have been affected by conflicts, robberies and insurgency, disrupting farming activities and threatening food security.

The ongoing insecurity has led to reduced agricultural output, the displacement of farmers, and increased difficulty in accessing markets.

"For us, in Niger State, there are portions of the state that have a lot of security challenges. The Mokwa local government has been lucky enough not to face those," Jain said.

"Additionally, we take other measures; we have a high level of armed security at our factory premises, and we make sure that we have good relationships with the community around us by doing corporate social initiatives so that the community is always standing with us."

"We process only locally sourced paddy and not imports. The import is open, but it remains highly restricted with high duties," he said. "In early 2025, the Nigerian government allowed imports of brown rice to very specific mills, which we did not get, but that's good for us."

Improved seedlings, farm inputs to boost yield

The lack of quality rice seedlings and essential farm inputs has significantly impacted rice yields in Nigeria, hindering the country's efforts to achieve self-sufficiency in rice production.

Quality seedlings are crucial for ensuring robust plant growth and maximizing harvests, yet many Nigerian farmers struggle to access improved varieties that are better suited to local conditions. Coupled with this challenge is the high cost of essential farm inputs, such as fertilizers, pesticides, and irrigation facilities, which are vital for enhancing crop productivity.

Jain said the company is involved in a seed multiplication technique to improve the quality of seedlings and yields.

"The company also has over 1,200 hectares of rice farm, but the volume of rice from the farm is less than 5% of the local paddy that comes into the rice milling facility," Jain said.

"To improve seed quality, we buy nuclear and certified seeds, which are developed by the research institutes, which we then multiply further in our farm for our internal use and also to distribute to various farmers around the region."

Jain noted that the availability of raw materials and access to cheap working capital remain the biggest challenges.