Rice Price Moves Slightly to US$18.80 -GoL-Importers Impasse Broken Amid Exogenous Factors

MONROVIA: Over the last couple of days, the Government of Liberia, particularly through the Ministry of Commerce and Industry, has been gingerly engaging merchants in the country’s staple food market. They have been pushing the administration for an increment in price not only to save them (the importers) from bankruptcy or instability in supply, and eventual scarcity and price hike, of the commodity. The government negotiators were timidly aware they were between a scissor’s twin blades—the rice importers on the one hand and the impoverished majority of Liberians on the other, fearing hurt from offending one side. Finally, they have got a deal out of it all—a less than a dollar’s add to the original price—something a number of pundits say is a win-win situation, safe for the administration and good for both the merchants or consumers. The Analyst reports.

Commerce and Industry Minister Amin Modad and his team of government negotiators had been having restless time endeavoring to reach a political and economically sensitive deal with rice barons in the country who have been insisting on increment in the price of a 25kg bag of rice.

The importers have been making a case that borders on the survivor of their businesses, which according to them could face possible insolvency if the current price wasn’t adjusted upward.

Amongst other things, they had argued that their importation business was hamstringed by a couple of external factors, including the imposition of an additional 20% charge and the lengthened shipping routes, including through the Suez Canal, due to the hostilities in the Middle East. They also made the case of increased transportation costs from APM Terminal, Med-Tech, the National Port Authority (NPA), the Liberia Revenue Authority (LRA), among others.

With those conditions, the nation staple food barons thought without an upward adjustment of price, they would not guarantee stability of the supply of rice on the market and possibly hoarding, all of which are historically tied to constraints constituting their grievances.

The Government had to proceed with the negotiation extremely cautiously so that they didn’t fall to the gallery of the profit-conscious barons just like that; for there could be political backlash from the ordinary people whose poor purchasing power was under threat and politicians who use rice crisis to score political points.

Thus, after lengthy discussions between the government of Liberia and the Rice Importers Association of Liberia and considering all factors, a mutually unanimous decision was reached that will now put the price of a 25kg bag at $18.50 for that which originates from India from its initial cost of $16.50.

With the mutually agreed upon deal, the importers announced that rice will be available on the market year-round, while options will be explored alternatively by the importers in other markets outside India for possible lower price of rice in the future.

Speaking at a special press briefing the Minister of Commerce and Industry, Amin Modad reflected on all that was put into the negotiation to get the deal.

He said the agreement followed several meetings after the rice importers presented compelling reasons to the government why the price should be increased, among which was the 20% surcharge placed by the government of India on rice exported outside of the country in addition to the long route and cost associated with the same importers were confronted with to have the goods brought to Liberia.

“We had extensive discussions in all the meetings we attended with the importers and what we projected was the interest of the ordinary end users of the rice as well as the interest of the importers who are in business,” he told journalists. “And the need to ensure that the commodity remains available on the market.”

The Commerce Minister continued: “So, whatever the price that was agreed upon, it was the best offer that we can secure for our people which should be the case for now while the government sets into motion a permanent solution which is to secure food security with massive production of rice in the country for both local consumption and export.”

He also emphasized how the Rice Importers lamented the on-going conflict between Israel and Gaza, which has impacted the Suez Canal and led to longer shipping routes.

He also said rice dealers also pointed to heightened fees imposed by entities such as APM Terminals, Med-Tech, the National Port Authority, and the Liberia Revenue Authority as some of the challenges.

“It is a hard decision, but again as per the negotiations from the government of Liberia with the Rice Importers, the price has been agreed upon to 18.50 cent rather than the 20 dollars they were requesting in the rice increment,” Modad said, reassuring the citizenry that the government was however working with authorities at the Freeport of Monrovia to reduce the price of rice on the market.

With the exchange rate set at USD1 to LD192, the price of the 25kg bag of rice will now be sold at LD3,555 on the local market, a source familiar with the market said.

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