The Ghana Commodity Exchange, playing the role as the link between agricultural and commodity producers and buyers, has now added rice, produced locally to its listed items after it gained approval from the Securities and Exchange Commission (SEC).
This brings to the table, a total number of five items the Exchange trades which includes maize, sorghum, soybean, and sesame.
Rice is considered the second most important grain food in Ghana, next to maize, accounting for 58 per cent of the country’s cereal imports.
With its consumption estimated at 1 million megatonnes in 2017 and 2018, the government expects that the annual per capita consumption to reach 40 kilogrammes this year.
But the dependency on foreign rice has become a phenomenon of worry for many in Ghana after the consumption rate started increasing steadily in the 1980s. But now, it accounts for more than 70% of local consumption.
According to the Ministry of Food and Agriculture, Ghana spends almost over a billion dollars on rice importation annually since 2015. For many years, rice farmers in the Builsa South District of the Upper East Region and other parts of the country have lamented the lack of a ready market for their produce.
Despite assurances from the Ghana Buffer Stock, some have been forced to keep their farm produce for many months without buyers, a situation that has been blamed as a result of inadequate warehouses.
Before December 2019, a campaign for the consumption of local rice received widespread support, leading to an increase in demand for local rice during the festive season.
The government also responded by getting the Ghana Buffer Stock Company to buy some of the rice, while discussions have started to get banks to provide credit to players in the local rice value chain to expand and meet local demand. In effect, the government also promised to end the importation of rice by 2022.
According to the Chief Executive Officer of the Ghana Commodity Exchange, Dr. Kadri Alfah, this intervention by the Ghana Commodity Exchange will help rice farmers and millers to find ready markets with competitive prices once they meet the expected quality standards.
“We’ve just had an approval from our regulator, the Securities and Exchange Commission. They’ve given us the go-ahead to trade rice, so this is good news to the Exchange, the farmers and the general Ghanaian public. So, you would see that we will be listing rice contracts on the Exchange and then trade in them in the coming months.”
Dr. Alfah also believes that local rice farmers have the capacity to produce enough to meet the country’s demand.
“To be honest with you, we haven’t really done a lot on rice, we are still importing a lot of rice, but we don’t need to import rice, we should actually be exporting rice because we have the climate, we have the resources. There’s been a lot of support also from the government through the Planting for Food and Jobs initiative. Rice farmers have been largely supported. The Exchange has also been set up to ensure that we are able to provide market linkages and get the farmers to get better market,” he added.
The Exchange Commission, as part of efforts to make room for its new addition, has also secured warehouses to store enough rice in the next few months.
“Usually, we would bring in new products at the harvest season so we are targeting the next quarter or so. We’ve actually even started because when we are starting with a new product, we start with the feasibility studies, we look at the buyers and sellers and some of the dynamics, the price trends and we just make sure that the market understands what we are doing. We also consult with the industry. We’ve also gotten two warehouses that we want to commit to the trading of rice and we’re looking for more warehouses. We have a warehouse in partnership with Juaben Food Market and we also have a warehouse in Bolgatanga where we are working with institutions.”
Meanwhile, due to the coronavirus pandemic, Dr. Alfah says its buyers within the off-taking chain have reduced. Already, the Exchange says the amount of produce it receives for the five listed items is now less, all due to the outbreak of COVID-19 in the country.
“We’ve also suffered from the off-taker side as well because those who were buying from us were mainly processors of food. They were businesses that were processing. They buy raw material from us and process. Most of them have actually scaled down their operation and some of them have actually shut down completely. So that is the reason why the off-taking side has gone down,” Dr. Alfah said
