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The short answer
A small rice mill buys paddy, parboils and dries it, hulls and polishes it, destones and sorts it, then bags it. BusinessDay reported paddy at ₦350,800 a tonne in April 2026, down 51% from a 2025 peak of ₦720,000, while the National Bureau of Statistics put local rice at ₦112,000 per 50kg retail in March 2026. In our labelled example, one tonne of paddy leaves about ₦189,600 before fixed costs, but the margin is sensitive to milling yield and mill-gate price.
The state of the rice milling market
Milling margins depend on two moving prices: what you pay for paddy and what buyers pay for milled rice. In April 2026, BusinessDay reported that paddy had fallen to ₦350,800 a tonne, down 51% from a 2025 peak of ₦720,000, citing cheap imports and smuggling, high production costs and a thinning milling industry. Peter Dama, national chairman of the Rice Millers Association of Nigeria, was quoted saying over 60 mills had shut down, and that millers generate their own power, water, roads and security to operate. Farmers in Kebbi and Jigawa were reported cutting the area they plant.
For milled rice, the NBS Selected Food Price Watch for March 2026, as reported by The Sun, put local short-grain rice at ₦112,000 per 50kg, up 20.5% from February. That is an average retail price; the mill-gate price you get from wholesalers is lower. Check current paddy and wholesale prices in your area before you commit.
How small-scale milling works
- Buy and clean paddy: remove chaff, straw and stones.
- Parboil: soak, steam and dry the paddy. This hardens the grain, cuts breakage and gives the colour Nigerian buyers expect from local parboiled rice.
- Dry to the right moisture; under-dried paddy breaks in the mill and spoils in storage.
- Hull to remove the husk.
- Polish to remove bran.
- Destone and grade: a destoner removes stones and a grader separates broken grains. Stones are the biggest complaint about local rice.
- Bag and label.
Machines: what a small mill needs
- Parboiling set
- Soaking tanks, steaming vessels and a heat source. Improved parboiling vessels give more even results than open drums.
- Dryer or drying floor
- Clean concrete or tarpaulin floor, or a mechanical dryer for the rainy season.
- Huller and polisher
- Separate units, or a combined mini rice mill.
- Destoner
- Essential if you want shop and supermarket buyers.
- Grader and colour sorter
- Graders are common; colour sorters cost far more and suit larger mills.
- Power
- Mills draw heavily; budget for a generator or three-phase grid supply.
We did not find a reliable published price list for small rice mills or destoners in Nigeria as at October 2026. Get several written quotes, and ask the seller to mill a sample of local paddy so you can see breakage and stone removal.
Worked example: one tonne of paddy (example figures)
Example only. Paddy uses the ₦350,800 per tonne price BusinessDay reported in April 2026. We assume 60% milling yield (600kg, or 12 bags of 50kg), ₦55,000 per bag at the mill gate, and 200kg of bran sold at ₦100/kg. Other lines are illustrative.
| Cost line (example) | Amount |
|---|---|
| 1 tonne paddy | ₦350,800 |
| Parboiling fuel and water | ₦40,000 |
| Labour | ₦40,000 |
| Milling power or diesel | ₦30,000 |
| 12 bags at ₦800 | ₦9,600 |
| Transport | ₦20,000 |
| Total | ₦490,400 |
Income: 12 bags × ₦55,000 = ₦660,000, plus ₦20,000 of bran, giving ₦680,000. The batch leaves ₦189,600 before rent, machine repayments, repairs and losses in storage.
How sensitive the margin is
| Scenario (example) | Bags | Cost | Income | Left over |
|---|---|---|---|---|
| Base case: 60% yield, ₦55,000 a bag | 12 | ₦490,400 | ₦680,000 | ₦189,600 |
| 55% yield, ₦55,000 a bag | 11 | ₦489,600 | ₦625,000 | ₦135,400 |
| 60% yield, ₦45,000 a bag | 12 | ₦490,400 | ₦560,000 | ₦69,600 |
A ₦10,000 fall in the bag price (about 18%) cuts the margin by nearly two-thirds, from ₦189,600 to ₦69,600. That is the squeeze the millers' association describes. Destoned, well-graded rice holds its price better against imports.
Selling milled rice
Local parboiled rice competes with imported rice on cleanliness, grain length and price. Buyers fall into a few groups, each with its own terms:
- Market wholesalers buy by the truckload and pay the lowest price, often expecting credit once they know you.
- Retailers and provision shops buy a few bags at a time at a better price.
- Schools, restaurants, caterers and canteens want reliable monthly supply and stone-free rice.
- Retail packs of 5kg and 10kg sell at a higher price per kilo, but need branding and, for supermarkets, NAFDAC registration.
Broken rice and bran are by-products with their own buyers: broken grains for cheaper markets and some food processors, bran for feed. Husk can fuel your parboiling, cutting the fuel line. A mill that sells all of these keeps more of each tonne.
Sourcing paddy
- Buy dry paddy of one variety; mixed varieties parboil and mill unevenly.
- Test moisture and do a small trial milling before buying a large lot.
- Build relationships with farmer groups and aggregators, and agree weights on your own scale.
- Store paddy in dry, ventilated rooms on pallets.
Where Pryme fits
Mills pay many farmers at harvest. Bulk payouts pay a list of farmers from a Pryme Business Account, and invoicing handles wholesalers. See also rice retail bag by bag and pricing when costs move.
Questions people ask
How much is a tonne of paddy rice in Nigeria?
BusinessDay reported ₦350,800 a tonne in April 2026, down from a 2025 peak of ₦720,000. Prices move with season and imports; check locally.
How many bags of rice from one tonne of paddy?
It depends on yield. At an example 60% yield, one tonne gives 600kg, or 12 bags of 50kg.
Why does local rice have stones?
Usually from drying paddy on bare ground and milling without a destoner. A destoner and clean drying floors fix most of it.
Is rice milling profitable in Nigeria?
It can be, but margins are thin and sensitive to paddy price, yield and competition from imports; over 60 mills were reported shut in 2026.
Sources
- Paddy price slump curbs Nigerian farmers' production plans for 2026, BusinessDay, 15 Apr 2026 · accessed Oct 2026
- Rice prices jump 20.5% as 50kg hits ₦112,000: NBS, The Sun, 7 May 2026 · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.