N5 billion rice contract launched on commodities exchange

To support the growth of agriculture in Nigeria, Lagos Commodities and Futures Exchange (LCFE) has announced the launch of the N5 billion series one of N30 billion Eko Rice Contract by the Lagos State Governor, Babajide Sanwo-Olu, on the exchange.

This is the first forward contract to be introduced into the commodities space. The asset will be listed on the floor of LCFE at a later date.

The contract will create a market for rice spots and futures derivatives, ensure product standardisation, enhance the availability of the high quantity of paddy rice, promote adherence to global best practices, provide organisational support through collateral management services and create business opportunities for small suppliers of the product.

Speaking at the event, Sanwo-Olu, who launched the rice contract, restated the Lagos State Government’s commitment to transforming the state into a hub of rice production in Nigeria.

“This is a significant milestone in our efforts to make Lagos state the hub of rice production in Nigeria. This will create job opportunities and wealth. Lagos State rice has become a key driver in growing our economy. Our goal is to make rice available and affordable through enhanced rice production.

“We want the entire investing public to go into the rice production and the entire value chain for the agricultural sector. We shall be deepening the market together. We are not just stopping at rice production. We are building a mega market hub in the whole of West Africa.

“We shall also create a space for the Lagos Commodities and Futures Exchange in the process so that there will be a cleaning room to monitor the products from any part of the country and ensure a transparent system,” said Sanwo-Olu.

Managing Director, LCFE, Akin Akeredolu-Ale, commended the Lagos State government on its initiatives towards enhanced food production in Nigeria and assured the governor of the exchange’s readiness to support the initiatives.

“By this singular act, Lagos State has proven once again its capacity and foresightedness in championing and promoting food security for the good people of Lagos in particular, and Nigeria, in general. This collaboration will ensure Paddy Rice supply to the Lagos Rice Mill Imota, integration of rice value chain stakeholders in and outside the state, and drive paddy rice and head rice standardisation in Lagos state.

“LCFE will provide an opportunity for investment in the rice value chain through the creation, onboarding and listing of commodities instruments for paddy aggregation and trading while also providing opportunities for Rice distributors and stakeholders to trade on the exchange through capital market operators,” Akeredolu-Ale said.

Chairman, LCFE, Onyenwechukwu Ezeagu expressed gratitude to Governor Sanwo-Olu and his team.

He said: “The capital market is therefore opening to the idea of commodities trading and commodity instruments and this would not have been possible without the support and partnership of our regulator SEC, the capital market Operators and all the other stakeholders too numerous to mention.”