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Ghanaian government plans to stimulate rice production to reduce imports
Post’s forecast for Ghana rice production in MY 2004 is 165,000 MT up from 150,000 MT in 2003. MOFA announced the sector’s production target of 240,000 MT in MY 2004/2005 that is intended to reduce rice imports by about 30%. As reported in the Ghanaian Times on July 22, 2004, MOFA has received a grant from the U.K. for a three-year rice project to increase and improve the quality of locally grown rice in Ghana. The project activities include introduction of high yielding and disease resistance rice variety the ‘Nerica’ (New Rice for Africa); adoption of low cost water management practices; rehabilitation of irrigation facilities; introduction of mini mills; installation of more efficient par boiling equipment at the milling sites and extension of credit to rice brokers. In addition, efforts will be made to stimulate demand for locally grown rice. According to MOFA, these efforts will ensure that good quality domestic rice is made available to the Ghanaian consumer.

It is unlikely that MOFA will be able to meet the proposed production target, due to budgetary restrictions. In addition, domestic rice production, with an average yield of 2.3 tons/ha rice, is grown under rain fed conditions in valley bottoms/low lying areas, and employs traditional methods with limited irrigation and mechanization. Post estimates that with the supply of improved seeds and low cost water management practices a 10 percent increase in production in MY 2004/2005 is achievable.

The per capita consumption of rice in 2004 is estimated as 30 kg up from 18 kg in 2002. The estimated rice consumption in MY 2003/2004 is 570,000 metric tons. Rice consumption has increased because it has become part of the main meal in every Ghanaian home due to the convenience in its preparation and palatable recipes. Additionally, the increasing number of fast food vendors in the major cities in Ghana has also increased the demand for rice. Rice has become a major competitor of staple foods in Ghana.

Ghanaians prefer imported rice especially those that reside in the cities due to the high quality. US long grain rice, though one of the highest priced on the market, is preferred by Ghanaians due to its high quality and taste.
Information from rice traders and MOFA indicate that only 20 percent of locally grown rice is consumed in the cities due to its low quality and low production, whilst 80 per cent is consumed in the rural areas in Ghana.

The forecast for Ghana rice imports in MY 2004/2005 is 400,000 MT, nearly unchanged from MY 2003/2004. According to the industry, rice imports may drop due to the added cost to the product with the introduction of the National Health Insurance Levy (NHIL) of 2.5% on all imports. The bulk of rice imports to Ghana are supplied by the US, Thailand, Vietnam, China, Pakistan, India, and Korea. The U.S. is a major exporter of rice to Ghana contributing about 35% of the total market share. Different grades of rice are imported into Ghana ranging from the more expensive fragrant (Thai) rice, US rice, Chinese parboiled rice and to cheaper 70% broken rice. The average price of US rice in MY 2003/2004 was $410 per ton up from $250 per ton in 2002/2003. This doubled the price of US rice on the Ghanaian market. According to importers, the delivered price of Asian rice runs close to $50 per ton below equivalent US product since last year.

A major concern of the industry is the high rate of rice “smuggled” into Ghana. According to industry sources and as reported in the Daily Graphic on April 8, 2004 an estimated 250,000 metric tons of rice at an average cost of $250 per ton was “smuggled” in Ghana in 2002.
The duty on rice imported into Ghana is 20% compared to Cote d’Ivoire, 12.5%, and Togo and Benin, 14%, respectively. Ghana lost about 234 billion cedis of tariff revenue. Information on these undocumented imports over the last two years is not currently available.

In Ghana both imported and domestic rice are sold on the same market in the urban centers. The imported rice is more commonly available on the market due to the irregular supply of local rice. The local rice includes the parboiled, white rice and brown rice and have a market niche due to peculiar flavor and perceived nutritional qualities, but are considered low quality substitutes for imported rice. Traders buy rice directly from the importers or from wholesalers and retail on the open market. Imported rice is generally packaged into 50 kg and 25 kg bags. The retailers repackage 34 percent of the rice supplies from wholesalers. US rice is sold under names easily identified by retailers and consumers. The wholesale price of a 50 kg bag US rice ranges between 220,000 cedis to 360,000 cedis depending on the grade, Thailand rice costs 320,000 cedis and Vietnam 226,000 cedis. Industry sources indicate that due to the high quality of US rice sales have been consistent even though it is relatively expensive. In addition, US rice is publicized through effective advertising on television, radio and print media in Ghana.
MGR Archive 9.12.2004
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Russia Rapan $ 700
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