Agribusiness Company, Finatrade, has revealed there has been an increased demand for local rice after government clamped down on the importation of rice.
The Trade Ministry on October 14, 2013 directed that all importation of rice into the country must be done through the airport or by sea.
The policy, according to the Trade Ministry, was “intended to provide a framework of administrative procedures through which the numerous unfair trade practices, including evasion of import duties and other taxes, under-invoicing, infringement of trademarks and smuggling, shall be controlled.”
Mr. John Awuni, Corporate Affairs Director of Finatrade, distributors of a brand of locally produced rice ‘Pride Rice,’ said even though supply levels have not been reduced, demand seems to outstrip supply and therefore wants the Trade ministry to sustain the restrictions.
Imported rice, which usually attracts about 40% import duties, has become more expensive as the cedi falls, compared to locally produced rice. For example, 50kg foreign rice costs GHC 250 compared to GHC170 for the same quantity of local rice with comparable quality.
The price of 25kg of locally produced rice is GHC70 as against GHC85 for the same quantity and quality of imported rice.
Market watchers say the absence of cheap smuggled rice, which is sold below market rates of both locally produced rice and legally imported rice, is contributing significantly to the demand for local rice.
Market watchers believe that the development is a major incentive for local rice production and should motivate farmers to produce more.
The Trade Ministry was however pressured to withdraw the restrictions last month.
Business World (with notes from the Finder)