Papua New Guineans Pay up to 100% More For Rice Than They Should Be

By: PNG Business News July 21, 2023

Papua New Guineans are paying 100% more for rice than they should be, according to a local commercial rice company, Rigo Rice. Rigo Rice has been growing and selling rice for the last five years in their small commercial farm at Rigo in Central Province. They sell their rice to wholesalers for K3 plus GST. Owner of Rigo Rice, Mr. Jeffery Kennedy said the company made good profit from selling their rice at a fair price.

An investigation completed by the Department of International Trade and Investment over the weekend found the price of rice in the shelves of shops in Port Moresby showing Rigo Rice to be the cheapest sold at K3.50 per kilo while the most expensive rice is HS Jasmine Red/Gold retailing at K7.48 per kilo as per the table enclosed.

Minister for International Trade and Investment, Hon. Richard Maru said he could not understand the rice pricing if rice was a price-controlled item.

“ICCC must explain why there is a big difference of up to 100% more from the cheapest rice to the most expensive one. This is totally unacceptable. Rice is a very basic food item of Papua New Guinea. The people of this country are being ripped of as far as I am concerned. ICCC needs to give a full explanation to our country and our 11 million rice consumers why the price of rice is not fixed at K3.50 per kilo across the board if Rigo Rice is saying that they are making a very good profit even at selling their rice at K3.00 per kilo to wholesalers. This is one of the reasons why our people have been complaining about the high cost of living which has reached the highest level since independence,” said Minister Maru.

As a result of the investigation into rice pricing, Minister Maru is now calling on ICCC to explain to the country why the price of rice is expensive as it is and why rice is not price controlled. We spend K900 million to import rice annually.

“We are now also referring the entire rice industry (those who import rice into PNG) to the IRC. We suspect that there is huge transfer pricing, and they are ripping off this country and its people and making profits through their middlemen in other countries. We want IRC to investigate all the rice companies, do a tax audit, and it will not surprise me that they will owe IRC millions of Kina in profits that are kept offshore by their foreign owners,” said Minister Maru.

Minister Maru said the Government now had two immediate options to take,

“One is to immediately go into a commercial joint venture with Rigo Rice to go into massive commercial rice farming in Central Province and also throughout the country so we can produce more cheaper local rice and create jobs and business opportunities for our people, our businesses, SMEs, and the landowners. The other option is for our Government, using the commercial joint venture with Rigo Rice maybe under Kumul Rice brand to immediately import rice from other countries and repackage the rice in Papua New Guinea and sell it at the local market and compete with these companies. Those are the immediate options available to the Government,” said Minister Maru.

Minister Maru thanked Rigo Rice for making available the data and information as part of their Rice Special Economic Zone application process.

“While importers can say Rigo Rice only produces a medium grain variety, other variety should not cost over 100% more to produce. Using the data and information that Rigo Rice has provided, we can now understand the real cost of producing rice in PNG and how it is profitable even to sell rice at K3.50 per kilo when imported rice is being sold up to 100% more in price, allowed for by ICCC,” said Minister Maru.

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