The Indian government in August 2023, faced with the challenge of conducting state and national elections, to control domestic rice prices placed a 20% Free on Board (FOB) export duty on India’s 5% broken parboiled rice, increasing the cost to US$558 per ton.
After the decision was taken, Liberian rice importers officially wrote the then CDC-led government informing it of the 20% export duty (FOB) placed on 5% broken parboiled rice, proffering the option for an increase in the cost of rice on the Liberian market.
Unfortunately for the rice importers, the CDC-led government was engulfed in political and campaign activities and did not pay any attention to the communication. Regrettably, the CDC did not win the presidency, leaving the Unity Party (UP) government with the quest of solving the rice situation.
In early April, to address the rice importers’ request, the Commerce Minister met with the rice importers. Predominantly, in summary, he requested the rice importers to show good faith to the Unity Party (UP) government by reducing the cost of 5% broken parboiled rice by US$ 0.25 (twenty-five cents), allowing rice to be sold at US$16.75 (sixteen dollars and seventy-five cents). He promised that once the good-fate is actualized, the UP-led government would increase the cost of the 5% broken parboiled rice to US$18.50 (eighteen dollars and fifty cents). The rice importers were assured that the increase would be done with the consent of President Joseph Nyuma Boakai.
Perhaps, the Commerce Minister did not tell the rice importers the whole truth that he was acting alone and the President of Liberia had little or no knowledge of his endeavors. Without getting the President’s consent and taking up time to educate the Liberian people of the global economic and financial markets, he hurriedly held a press conference at the Ministry of Information where he announced that the 5% broken parboiled rice was to be sold on the Liberian market at US$18.50 (eighteen dollars and fifty cents).
The new price tag for 5% broken parboiled rice was immediately and emotionally rejected by President Boakai during a meeting between him and rice importers. During their encounter, the President unceremoniously and emotionally walked out of the meeting without hearing the pros and cons of the unfolding rice saga.
The President would then hurriedly compose and announce a rice committee with a term of reference (TOR) that is unachievable under the one-year lifespan of the Executive Order.
Numbers Don’t Lie Or Play Politics:
In the past, rice importers were importing 100 pounds bag of rice, which accumulated to 20 bags a ton. Fortunately, or unfortunately, 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 US$13.95 per bag of rice. If one adds US$64 for freight per ton and US$5.50 for insurance per ton, it will sum to US$627.50 per ton.
If one divides the 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 US$15.68 per bag.
Landed at the Freeport of Monrovia, the cost of a ton of 5% broken parboiled rice is placed at US$627.50 (six hundred twenty-seven dollars and fifty cents), which includes US$558 purchase and FOB, US$5.5 for insurance per ton and US$64 per ton for freight.
However, the rice importers incur other costs to take the rice from the Freeport of Monrovia into their respective warehouses: on or before the arrival of the consignment of rice, the rice importers pay US$1 (one dollar) per ton for BIVAC. They also pay US$14.50 (fourteen dollars and fifty cents) per ton for container clearing and US$1.85 (one dollar and eighty-five cents) for transportation per ton.
Other expenses include US$5.0 (five dollars) per ton for offloading and stacking, US$0.50 (fifty cents) per ton for survey fees, US$0.28 (twenty-eight cents) per ton to the shipping line and US$3.0 (three dollars) per ton for warehouse rent.
The rice importers also pay US$3 (three dollars) wage transport per ton, US$19 (nineteen dollars) financing per ton, US$3.0 (three dollars) utility per ton, and US$3.0 (three dollars) miscellaneous per ton.
If one calculates the total expenses incurred at the Freeport of Monrovia, it sums up to US$54.63 (fifty-four dollars and sixty-three cents) per ton.
If one adds the cost of 5% broken parboiled rice landed at the Freeport of Monrovia, US$627.50 per ton, to the expenses incurred in taking the commodity from the Freeport of Monrovia to the individual rice importers’ warehouse, US$54.61 per ton, the total cost of a ton of 5% broken parboiled rice landed legally at the importers’ warehouse will cost US$682.13 (six hundred eighty-two dollars and thirteen cents). If one divides US$682.13 by 40 bags, the cost of one bag of rice landed at the importers’ warehouse sums up to US$17.05 (seventeen dollars and five cents).
If one minuses the current selling price of 5% broken parboiled rice of $16.75 from $17.05, it sums up to a loss of $0.30 (thirty cents). Investigation continues.