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Wednesday, June 12, 2024

Liberian President Keeps Taxes on Rice, Dropped $11 Million Subsidies While Seeking India’s Relief

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Liberian President Joseph Boakai is asking the government of India to grant special dispensation that would relax taxes on the export of rice to the West African nation, as he struggles to curb surging food prices.

After failed negotiation with importers of the commodity who are seeking price hike due to growing costs associated with the transportation and production of rice, Boakai has directed the Minister of Foreign Affairs to write Indian authorities to waive the 20% export levy, according to the people privy to the plan.

The President has sidestepped food subsidies introduced by his predecessor George Weah. To stabilize the price of rice, the Weah administration introduced $11 million of subsidies in the 2022 budget, but the measures failed to prevent hikes and shortages as shipments were delayed and some funds failed to reach importers.

Rice is the main diet for Liberians, tension is creeping again as price moves upward. Concern Worldwide ranked Liberia’s hunger level as serious in its recent Global Hunger Index, placing it 113th out of 121 countries.

Sources said the President’s policy thinking is that removing the tax could limit cost and put traders in a better position to import more of the nation’s staple commodity and keep price affordable. The Executive Mansion is tightlipped on the matter. Presidential Press Secretary Kula Fofana phone did not connect when contacted.

Commerce Ministry Monday introduced a 5.7% increment in the price of the commodity due to pressure from the country’s powerful Rice Importer Association who are demanding 20% upward adjustment in the pricing structure.

The importers cited surge in charges imposed by the Indian government on 5% broken parboiled rice, resulting in higher costs for rice imports to Liberia.

External factors such as the conflict between Israel and Gaza disrupting shipping routes and increased fees by various entities like APM Terminals, Med-Tech, the National Port Authority, and the Liberia Revenue Authority have further compounded the challenges faced by rice dealers.

Following .public outcry the President reversed the pricing decision and placed ban on cross border trade of the commodity as he look to India for redemption.

India is the world’s largest rice exporter, making it a significant player in the global rice market. A global rice shortage is anticipated amid rising geopolitical tensions and commodity prices. To safeguard domestic consumers from exorbitant price shocks, India has banned the export of non-basmati white rice since July 2023.

The benchmark Thai rice price has risen 14%, Viet Nam rice prices are up 22%, and India white rice prices are up 12%.

In August 2023, in an effort to prevent exporters from undermining the ban, India put a surcharge of 20% on exports of parboiled rice and instituted a minimum sales price for basmati rice.

Myanmar, the world’s fifth largest rice exporter, announced that it too would ban rice exports for 45 days. On September 1, the Philippines put price ceilings in place to cap retail rice prices.

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