The minimum price at which factories have to buy unprocessed rice from farmers has gone up by over a third, amid the rising production costs and negative climate change impact on farm productivity, The New Times understands. According to farm gate prices announced by the Ministry of Trade and Industry in a communiqué, on December 20, 2022, a kilogramme of unprocessed rice should be bought at, at least, Rwf450, for short grain rice variety locally called Kigori. This price represents an increase of 36 per cent compared to the previous price set in June. For long grain rice (of relatively better quality than the short grain variety), the same communiqué by the Ministry of Trade and Industry indicated, a farmer should be paid at least Rwf454 a kilogramme – or 33.5 per cent higher than the previous price of Rwf340 for the same quantity. Jean Damascene Rwamwaga, the president of Rwanda rice farmers' federation, told The New Times that some farmers requested that the price of rice not go below Rwf500 a kilogramme, considering the investments needed to produce it. “Fertiliser prices went up, the wage paid to farm labourers also increased,” he said, adding that drought also weakened rice production efforts. With the new pricing, Rwamwaga said that the farmer’s profit margin is expected to increase to between 18 and 25 per cent, from 11 per cent before. “This will help the rice farmer to afford other commodities and services they need, whose prices have also gone up,” he said. Processed rice prices soar Speaking to The New Times, Peter Uwamahoro, Vice President of Rwanda Forum of Rice Millers, said there was a reduction in rice production both in Rwanda and other countries because of rainfall shortage and floods. Also, he said, the Covid-19 pamdemic and the Russia-Ukraine war contributed to the increase of rice prices and supply disruption, through a hike in fuel prices and transport costs for the imported commodity, as well as for the locally sourced one. “For instance, in the country, where it used to cost Rwf10 to transport rice from a marshland to a mill, that cost is now Rwf20,” he said. As a result, he said, a 25-kilogramme sack of short grain rice costs from Rwf26,000 to Rwf27,000, while that of long grain rice is Rwf28,000 and Rwf30,000, depending on the quality. These prices imply an increase of up to 66 per cent for long grain rice, compared to the previous one where it cost Rwf18,000 for 25 kilogrammes, and an up to 80 per cent rise for short grain rice - from Rwf15,000 previously, according to the prices he shared. “The reduction of rice prices is not expected in the short term, as long as there are still climate change effects on farm productivity and the lingering impact of the Russia-Ukraine war,” he said. Meanwhile, imported aromatic rice from Tanzania costs Rwf40,000 a 25-kilogramme sack in some parts of Kigali, an increase of 60 per cent from Rwf25,000 two years ago. According to the Ministry of Trade and Industry, as of 2021, Rwanda’s demand for rice was estimated at 145,000 tonnes a year, while national supply accounted for about 40 per cent, and the 60 per cent deficit had to be met through imports. Rwanda relies on rice shipments from Tanzania, Pakistan, Thailand, and India, among others, to supplement local production.
