Global Rice News

Ghana’s Love Affair with Rice: A Growing Demand and Dependence on Imports

Ghana, known for its delicious jollof, waakye, and the popular ‘Omotuo’ enjoyed on Sundays, has a special place in its heart for rice. It seems that Ghanaians cannot get enough of this versatile grain. Whether it’s birthdays, weddings, Christmas, or even funerals, rice is a staple at almost every occasion. It has become an indispensable part of Ghanaian cuisine, loved for its convenience in cooking and its ability to create a wide variety of mouthwatering dishes.

In fact, according to IDH Sustainable Trade, Ghana consumes approximately 1.5 million metric tonnes of rice per year, which is equivalent to a staggering 54,000 40ft containers of rice. However, here’s the catch – a significant portion of this rice, about 60%, is imported from abroad. This translates to approximately 950,000 metric tonnes of rice, making Ghana the 13th largest importer of rice in the world. In 2021 alone, Ghana spent $552M on rice importation, highlighting its heavy reliance on imported rice.

So, where does Ghana source its rice from? The main import origins for Ghana are Vietnam, Thailand, India, China, and Pakistan. These countries are crucial suppliers of rice to satisfy the nation’s growing demand. However, this heavy dependence on a few countries poses a significant risk to the stability and affordability of rice prices in Ghana. Even the smallest disruptions to the supply chain from these countries can lead to price hikes and affect the rice market in Ghana.

Growing Challenges for Local Rice Production

The domestic rice production in Ghana is falling short of meeting the country’s demand. Currently, Ghana produces around 963,000 metric tons of paddy rice, equivalent to 650,000 metric tons of milled rice. This only fulfills about 40% of the national demand, leaving a substantial gap that needs to be filled by imports.

The Ministry of Food and Agriculture (MoFA) attributes this shortfall to various challenges faced by the local rice industry. These include a lack of modern milling machines and adequate processing facilities, insufficient silos for paddy storage, and the absence of comprehensive quality testing procedures for rice seed and milled rice. These factors contribute to the lower competitiveness and quality of domestically produced rice.

The situation is further exacerbated by the fact that Ghana is highly vulnerable to any shocks in the supply of rice from its main import sources. Currently, about 90% of rice imports come from just three countries, namely Vietnam, Thailand, and India. Any disruptions in the rice supply chain from these countries can have a significant impact on the availability and affordability of rice in Ghana.

Price Volatility and External Shocks

Recent developments in the global rice market have raised concerns for Ghana’s rice importers. For instance, India, one of Ghana’s major rice import destinations, implemented a 20% duty on parboiled rice exports. This policy change led to a delay in shipments of 500,000 metric tons of rice to mid-October, causing potential supply shortages in Ghana and driving up prices.

In addition to that, Thailand, another important rice exporter, is facing a water shortage that is expected to result in a decline in rice supply. This water scarcity could lead to a decrease of up to 30% in rice production, causing prices to skyrocket. The combination of robust demand and restricted exports from these countries has pushed the rice price index to its highest level in 15 years, intensifying concerns about rice affordability in Ghana.

Policies and Initiatives Towards Rice Self-Sufficiency

The Ghanaian government has recognized the importance of increasing rice production to achieve self-sufficiency and reduce dependence on imports. Various strategic policies and initiatives have been implemented to boost rice production in the country.

The Planting for Food and Jobs (PFJ) program, launched in 2017, has been instrumental in promoting rice cultivation and increasing output. The program subsidizes 50% of the cost of fertilizer and rice seed, making it more accessible for farmers. Additionally, initiatives like the National Rice Development Strategy (NRDS) and the Ghana CARES program are focused on strengthening the rice value chain and enhancing production capacity.

Despite these efforts, achieving rice self-sufficiency by 2024 seems unlikely given the current level of sufficiency. Therefore, it is crucial for Ghana to diversify its rice import sources and intensify import substitution efforts. This will help protect the country from vulnerabilities and ensure a stable and affordable rice market.

Source: MyJoyOnline