In a momentous event held at the
UAC Building in Marina, Babajide Sanwo-Olu, the governor of
Lagos State,
launched the groundbreaking N5 billion Eko Rice Forward Contract Programme on
the Lagos Commodities and Futures Exchange. This launch marked a significant
milestone in the state government’s ongoing efforts to promote agriculture and
bolster food security within the region.
The Forward Contract initiative,
developed through a collaboration between the Lagos State Rice Company
(LASRICO) and Commodities Tradenet Limited, represents the initial phase of a
larger N30 billion Private Commodity Notes Issuance Programme facilitated by
the state government. The primary objective of this program is to ensure
uninterrupted paddy supply, enhance quality management, and improve transaction
efficiency and transparency within the rice industry.
Governor Sanwo-Olu emphasized
that by guaranteeing the availability of affordable rice, the state is
safeguarding the food security of over 80 percent of Lagos families. He
expressed, “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 program that will provide a
platform for farmers, processors, and traders to buy and sell rice contracts at
a fair price.”
He further explained that the
program would provide assurance regarding the quality and quantity of rice
produced, thereby enhancing the confidence of buyers and sellers within the
market. The utilization of the Lagos Commodities and Futures Exchange is a
crucial component of the government’s plan to establish a transparent and
efficient marketplace for the trading of agricultural commodities and
derivatives. The governor highlighted the Exchange’s potential to transform the
agriculture sector by providing a reliable and efficient market for farmers,
processors, and traders.
Governor Sanwo-Olu underlined
that the state-owned 32-metric-tonnes-per-hour Imota Rice Mill, inaugurated by
former President Muhammadu Buhari in January, requires an annual supply of
200,000 tonnes of paddy. He emphasized that the Commodities Exchange would
create a stable market for the 2.5 million bags of 50kg rice produced by the
mill each year.
“The Bell Ringing ceremony
today signals the listing of rice paddy contracts for the Lagos Rice Mill in
Imota for open transactions,” the governor declared. “This highlights
the opportunities available in rice processing and other value chains within
the Lagos Agricultural sector. It will draw the attention of local and foreign
investors to the Lagos Rice Mill forward contract and showcase the role of the
Capital Market in driving development within Lagos’ commodities ecosystem. We
are committed to expanding the program to cover other commodities, such as
cassava, maize, and vegetables.”
The Forward Contract for Eko Rice
stands as the first to be listed and traded within Nigeria’s commodities
exchange ecosystem. The initial 5,000 contracts issued on the exchange floor
were traded at a total value of N195 million.
The offer for 50kg of Eko Rice
commenced on June 13 at a rate of N33,000 per Note. The trading of this
commodity is expected to continue until Monday, June 26, 2023. The tenor of the
Note is set at 60 days.
