The Imota Rice Mill, owned by the Lagos State government, has successfully introduced its rice, Eko Rice to the market. The rice has been listed for trade on the Lagos Commodities and Futures Exchange (LCFE) since Tuesday.
Governor Babajide Sanwo-Olu has now officially launched the Eko Rice Forward Contract Programme, worth N5 billion, at the UAC Building in Marina. This milestone marks the State Government’s significant efforts to promote agriculture and enhance food security in Lagos.
The Forward Contract is a collaborative initiative between the Lagos State Rice Company (LASRICO), a government-owned entity, and Commodities Tradenet Limited. It is part of the N30 billion Private Commodity Notes Issuance Programme facilitated by the Lagos State Government. The objective is to ensure a steady supply of quality paddy, improve transaction efficiency, and enhance transparency.
The Eko Rice Forward Contract is the first of its kind to be listed and traded in Nigeria’s commodities exchange ecosystem. The private listing generated excitement among commodity brokers, farmers, and investors in the commodities market. The initial 5,000 contracts issued on the exchange floor were traded at a value of N195 million.
The offer for 50kg of Eko Rice opened on June 13 at a rate of N33,000 per Note. Trading of the commodity is expected to continue until next Monday, June 26, 2023. The Note has a tenor of 60 days.
Commodity brokers attributed the encouraging performance of Eko Rice during its first trading in the Commodities Exchange to its well-cleaned grains and high-grade texture, positioning it competitively against imported rice in the market.
Eko Rice is laboratory-tested to ensure it contains less than 2 percent impurity and has a moisture content of 14 percent.
Governor Sanwo-Olu described the Eko Rice Contract Programme as a game-changer that aims to establish Lagos as a hub for agricultural production and processing in Nigeria. Rice is a staple food consumed by over 80 percent of the Lagos population, making the Forward Contract a crucial component of the Government’s food security plan to ensure the availability of affordable rice.
To maintain an uninterrupted supply chain, the State Government has invested in the development of the rice value chain. This includes capacity building for farmers, provision of inputs, and infrastructure in rice production centers across Lagos.
As a result of these efforts, local paddy production has increased by 63.5 percent, leading to the creation of over 2,620 direct and indirect jobs. The intervention has also stimulated economic activities and improved livelihoods in rice-producing communities.
Sanwo-Olu Launches N5Billion Forward Contract As Eko Rice Hits Market
The Imota Rice Mill, owned by the Lagos State Government, requires 200,000 tonnes of paddy annually. The Commodities Exchange will provide a steady market for the 2.5 million bags of 50kg of rice produced by the mill each year.
Mr. Akinsola Akeredolu-Ale, the Managing Director of LCFE, emphasized that rice is among the 13 crops approved by the Securities and Exchange Commission (SEC) for trading in the commodities exchange market. The listing of Eko Rice represents a significant moment for the capital market.
Akeredolu-Ale expressed confidence that the collaboration with the Lagos State Government would drive paddy supply to the Imota Rice Mill, integrate stakeholders in the rice value chain nationwide, and standardize head rice and paddy rice in Lagos.
Governor Sanwo-Olu officially commenced trading of the commodity contracts by ringing the open bell. He was joined by his deputy, Dr. Obafemi Hamzat, and other senior government officials.
Johnvents Industries Limited, an agro-processing firm, became the first investor to acquire 5,000 Forward Contracts worth N195 million on the Exchange floor.
Chief Onyenwechukwu Ezeagu, Chairman of the Board of Directors of LCFE, stated that the partnership complements the Exchange’s objectives in transforming the commodities market, redefining practice norms, and catalyzing economic growth in Nigeria.