Sanwo-Olu Launches N5 Billion Eko Rice Forward Contract Programme For Paddy Supplies

Lagos State governor, Babajide Sanwo-Olu, on Wednesday, launched N5 billion Eko Rice Forward Contract Programme on the Lagos Commodities and Futures Exchange.

The launch which took place at UAC Building in Marina, marked a significant milestone in the state government’s drive to promote agriculture and enhance food security in the state.

The Forward Contract, which is a joint initiative of the government-owned Lagos State Rice Company (LASRICO) and Commodities Tradenet Limited, is the first series of N30 billion Private Commodity Notes Issuance Programme facilitated by the state government to ensure undisrupted paddy supply, enhance quality management, transaction efficiency and transparency.

Sanwo-Olu noted that by guaranteeing the availability of affordable rice, the state is ensuring food security for over 80 percent of Lagos families.

He said: “The N5 billion Series of N30 billion Eko Rice Contracts Programme being launched today is part of our efforts to ensure a sustainable supply of rice paddy for the smooth running of Lagos Rice Mill in Imota. The exchange market is a public-private partnership programme that will provide a platform for farmers, processors, and traders to buy and sell rice contracts at a fair price.

“The programme will also provide a guarantee for the quality and quantity of rice produced, which will enhance the confidence of buyers and sellers in the market. Leveraging the Lagos Commodities and Futures Exchange is a critical component of our plan to create a transparent and efficient market for the trading of agricultural commodities and derivatives. The Exchange has the potential to transform the agriculture sector by providing a reliable and efficient market for farmers, processors, and traders.”

According to the governor, the state-owned 32-metric tonnes per hour Imota Rice Mill, which was inaugurated by former President Muhammadu Buhari in January, requires 200,000 tonnes of paddy annually, stressing that the Commodities Exchange would create a steady market for the 2.5 million bags of 50kg rice that would be turned out from the mill yearly.

“Today’s Bell Ringing is to herald the listing of rice paddy contracts for the Lagos Rice Mill, Imota for open transactions. This highlights the opportunities available in rice processing and other value chains of the Lagos Agricultural sector. It will draw attention of local and foreign investors to the Lagos Rice Mill forwards contract, and project the role of the Capital Market in driving development in Lagos commodities ecosystem. We are committed to expanding the programme to cover other commodities, such as cassava, maize, and vegetables,” Sanwo-Olu said

Forward Contract for Eko Rice is the first to be listed and traded in Nigeria’s commodities exchange ecosystem. First 5,000 contracts issued on the exchange floor were traded at the value of N195 million.

The offer for 50kg of Eko Rice opened on June 13 at the rate of N33,000 per Note, with the commodity being expected to be traded till next Monday, June 26, 2023. Tenor of the Note is 60 days.