Reduction of benchmark value affecting us – Rice milling company

A rice milling company, Avnash Industries Limited, says the reduction of the benchmark value on imports at the ports has affected the sale of local rice.

Avnash for the past four to five years has been sourcing local rice from local rice farmers for both export and sale in the country.

Speaking to Citi News, the Head of Marketing, David Selorm Adikah says the company has some 200,000 bags of rice it bought from farmers last year, at its warehouse.

“At the beginning of the year, we were selling a bag of rice for GHS183.00. Currently, we are selling the same bag of rice at GHS155,00, delivered to the buyer anywhere in the country at our cost. This was occasioned in the custom charges at the port which made imported rice even cheaper and so we were forced to reduce our prices, losing GHS30.00 per bag. Those who were bringing the low valued rice which was selling above GHS200.00 per bag, suddenly were able to offer rice at about GHS150, GHS155, GHS170 to the traders so we were left very naked and had to go down to be able to compete,” he said.

“We have already lost, the rice is there, it could go bad anytime soon. Also, there are hundreds of thousands of bags on the farms and bush fires will consume them and when it rains all will get rotten on the farms,” he lamented.

Meanwhile, the Chief Executive Officer of the National Buffer Stock Company, Hannan Wahaab Abdul says they will meet with Avnash to find ways of salvaging the situation.

“The status report we have received is that they have a backlog. This means they still have the backs of rice from this farming season. But what we don’t understand is that Avnash is a Free Zones registered company. They are supposed to mill and export 70% and retain 30%. So, I spoke to the Free Zones Authority this morning. I requested for a meeting where I can understand the history of AvNash whether or not they have done some exports. A team from the Free Zones Authority are planning to meet us before we move to the North.

 Reduction in the benchmark value

In a bid to reform Ghana’s import duty regime and alleviate high taxes at the country’s ports, government announced earlier this year that, there will be a reduction in the benchmark value of import duties at all of the country’s ports.

The benchmark value of import duties was slashed by 50 per cent while importers of vehicles will enjoy a 30 per cent.

The move, which took effect from Thursday, April 4, 2019, is also to decrease smuggling and make the ports more competitive.

The reduction which affected the importation of rice by at least 50 percent is to enhance the growth and consumption of local rice in Ghana.