RWANDA—Rwanda’s rice industry is facing significant challenges due to an influx of relatively cheap imported rice, primarily from Tanzania.
This situation has left local rice mills with thousands of tonnes of unsold rice stocks, severely impacting their ability to purchase produce from farmers.
The issue arose shortly after the Ministry of Trade and Industry (MINICOM) announced new prices for rice purchases from farmers for the 2024 agriculture season B harvest.
The fixed prices, ranging from Rwf500 (US$0.38) to Rwf775 (US$0.59) per kilogram depending on rice quality and variety, were intended to stabilize the market. However, the competitive pricing of imported Tanzanian rice has undercut this effort.
Apollinaire Gahiza, Chairperson of a rice farmers’ union in the Rwamagana, Kayonza, and Ngoma districts, highlighted the severity of the situation.
“While the fixed rice prices are high, the heavy importation of low-cost Tanzanian rice has made it difficult for farmers to sell their produce at those prices,” Gahiza said.
He also noted that some industries collected rice from farmers without payments or contracts, exacerbating the issue.
The consequences for farmers are dire. They struggle to cover investment costs for fertilizers and other necessary inputs for the next season without the ability to sell their rice at fair prices. This creates a cycle of losses and potential damage to unsold rice due to adverse weather conditions.
Laurent Basabira, Nyagatare Rice Mill Managing Director, echoed these concerns. The factory is struggling to sell processed rice due to the competition from cheaper Tanzanian imports.
“We have over 2,800 tonnes of last season’s rice and 3,800 tonnes from the current season that we are unable to sell,” Basabira said.
The factory’s selling prices are significantly higher than imported rice, making it challenging to compete.
Laurent Ndagijimana, Chairperson of the Rwanda Forum of Rice Milling Industries (RFRM), also pointed out the industry’s difficulties.
“Rice industries already have large stockpiles and are working hard to pay farmers, but rice is accumulating in many industries,” he said.
MINICOM is aware of these challenges and has been discussing solutions with the federation of rice mills and farmers.
Cassien Karangwa, Director of Domestic Trade at MINICOM, stated that measures are being taken to support local rice farmers and industries. These include collecting rice directly from fields, establishing contracts with farmers, exploring new markets, and improving the quality of local rice to compete with imported brands.
The ministry is also considering other buyers, such as the school feeding program, to help reduce stockpiles.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.