India’s rice export restriction led to increased local purchases in Senegal in 2023: Trade observers predict
SENEGAL – While awaiting the National Agency for Statistics and Demography (ANSD) report for the year 2023 import data, the trade analysis observers in Senegal predict an increase in local rice purchases linked to the restrictions applied by India, its first supplier.
The prediction follows the latest foreign trade analysis note from ANSD that has indicated that rice purchases reached a record amount in 2022, hitting nearly 347 billion CFA francs (US$578 million).
The spending, according to the note, is up 32.1% on a year-on-year basis and marks the 3rd consecutive increase since 2020.
According to the public body, this strong increase is linked to the growth in volume which has accumulated at 1.48 million tonnes, or 24.6% more than a year earlier.
In Senegal, rice is the second category of imported goods in volume after finished petroleum products.
According to International food policy research, by 2018, an average Senegalese consumed about 85 kg of rice each year, and the consumption is projected to reach 95 kg per person per year by 2027.
However, despite favorable conditions for cultivation, production is still below par forcing the West African nation to import 60 percent to meet its local demand.
While it is true that this dynamic of external purchases reflects the strength of cereal consumption against a backdrop of production deficit, several observers nevertheless point out that the strong import demand could also be the consequence of the tax boost, granted by the government in 2022.
At the beginning of 2022, several measures were put by the Senegalese authorities to support the purchasing power of consumers, including the elimination of VAT on imported rice and the reduction of customs duties of 12.7%, previously on imported broken and unflavored rice at 2.7%.
According to ANSD, these provisions widened the gap a little further with the rules of the ECOWAS Common External Tariff (CET) (which imposes a customs duty of 10%,) as well as stimulated imports intended for the local market.
However, for the 2023 report, some observers are already predicting a decline in foreign rice purchases with the rise in prices of the basic commodity, linked to the restrictions applied by India, its first supplier.
According to observers, a recent report by the United States Department of Agriculture (USDA) reported that arrivals of Indian rice on Senegalese soil had fallen by 60% in 2023.
In addition, the country in November 2023, the executives announced that the country plans to reduce its wheat imports by at least 40% over the next five years, an initiative that will reduce the bill dedicated to future cereal purchases.
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