The unspoken fact that is to soon be realized is that rice importers are losing heavily but are taking their losses quietly, not to be seen as fighting or undermining the Unity Party government of President Joseph Nyuma Boakai. The unspoken truth among rice importers, due to the heavy losses, is that after the depletion of the current consignment of rice on the Liberian market they (the rice importers) will not be requesting new Import Permit Declarations (IPDs) until the situation is addressed, giving rise to an avoidable political situation.
According to an on-going independent investigation being conducted by the Hot Pepper, the woes of the importers actually started in 2022 when India, the world’s largest exporter of rice, decided to increase the cost of the product by US$8.00 (eight dollars) on a ton of rice.
This situation was immediately reported to the then CDC-led government through a formal communication from the rice importers—that India had increased a ton of 5% broken parboiled rice and they, too, were opting for an increase in the price of the country’s staple, rice.
In response, after a lengthy negotiation with the rice importers, the Government of Liberia (GOL) decided to subsidize the cost of rice on the Liberian market through a budgetary allocation of US$21 million (twenty-one million United States dollars). Unfortunately, only US$11 million (eleven million United States dollars) was made available to the rice importers, leaving the current Unity Party government indebted to the rice importers to the tone of US$10 million (ten million United States dollars). It is reported that some of the rice importers received a part of the US$11 million subsidy, while up to press time others have not received a penny.
In August 2023, the Indian government, to control domestic rice prices ahead of a key 2024 state and national elections, increased the duty of 5% broken parboiled rice by 20% Free on Board (FoB), increasing the rice price to US$558 per ton.
In the past, Liberian rice importers were importing 100 pounds bag of rice, which accumulated to 20 bags a ton. Fortunately, or unfortunately, Liberian rice importers are now importing rice at 50 pounds a bag, accumulating to 40 bags a ton.
If one calculates 40 bags into US$558 per ton, it will sum up to $13.95 per bag of rice.
According to the Hot Pepper’s investigation, importers are paying US$64 for freight per ton and US$5.50 for insurance per ton. If one adds the two amounts to the price of a ton of rice, which is US$558, it will sum to US$627.50 per ton.
If one divides US$627.50 per ton of rice by 40 bags, the cost of landing a bag of 5% broken parboiled rice at the Freeport of Monrovia will sum up to $15.68 per bag. This amount excludes other charges at the Freeport of Monrovia. Investigation continues.