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Increasing Food Price Triggers Inflation to 2-Year High

From Joy Okeke, Lagos

 The rising cost of food in the country has pushed the inflation rate, a two years high of 13.

7 per cent as prices of food rose by 16.67%  for the 13th consecutive months.

The National Bureau of Statistics (NBS) said this in its September report, released on Thursday, explaining that the food supply chain has been ensnaring terribly on all sides. 

Some of the factors that contributed to the spike in food prices include: the closure of the land borders since 2019 ensures that cheap food was barricaded out if the country.

Secondly, President Muhammadu Buhari’s order to the central bank to stop providing foreign exchange for food and fertilizer imports again cut short the inflow of cheap food.

Thirdly, the on-going raid by herders on farms also ensured that food became very scarce in the country.

The government had, however, said that the policies were geared towards self-food sufficiency, the immediate impact has left Nigerian with fixed salaries deflated while food prices continue to soar.

The spike in prices of food items, such as bread, cereals, potatoes, yam and other tubers, meat, fish, fruits and oils and fats, accounted most for the rise in inflation in September, the National Bureau of Statistics (NBS) said in its Consumer Price Index September 2020.

Daily Asset findings showed that a big basket of Oval-shaped tomatoes now sells for an average of N17, 000, indicating a 6.3 per cent rise in the price when compared to N16, 000 recorded in September. 

A big bag of Melon increased by 22.4 per cent, to sell for an average of N46, 500.

Also a carton of Turkey increased by 5.8 per cent to sell for an average of N18, 333, compared to an initial average of N17, 333 recorded in September 2020, and carton of full Chicken that was sold for an average of N14, 000 two weeks ago, now sells for an average of N14, 500, representing a 3.6 per cent increase in price.

A big bag of Bush mango seed, popularly known as “Ogbono” now sells for N100, 000 at Mile-12 market. 

A 5.3 per cent increase compared to N95, 000 reported earlier, while a big bag of dry Onions increased by 48 per cent to sell for an average of N55, 500, compared to an initial average of N37, 500.

Furthermore, a big bag of new Onions rose by 60.8 per cent selling at N41, 000 as against the N25, 500 it was initially sold for. 

A bag of Pepper increased by 9.7 per cent to sell for an average of N17, 000, while a medium-sized bag sells for an average of N9, 000 – a 38.5 per cent increase in price.

Also, a big basket of Sweet Potato now sells for an average of N13, 500, from an initial average of N14, 000 – a 3.6 per cent reduction in price, while the price of a big basket of Irish Potatoes reduced by 29.5 per cent to sell for an average of N21, 500, compared to N30, 500 recorded in September.

For rice, 50kg of Royal Stallion Rice still sells for an average of N30,333, Mama Gold (N29,750), Caprice (N29,667), and Mama’s Pride (N25,500). 

A big sized bag of Brown Beans still sells for an average of N33, 000.

Consumer prices rose 13.7 per cent from a year earlier, compared with 13.2 per cent in August, the National Bureau of Statistics said in a report published on its website on yesterday. 

Goldman Sachs Group Inc. expects Nigeria’s inflation to accelerate in coming months, peaking close to 18 per cent year-on-year in the second quarter of 2021. The main source of price pressure has been pass-through from the recent naira depreciation, analysts at the bank said in a research note.

The food index rose by 16.7 per cent from a year earlier, while costs increased 1.9 per cent in the month, the most since June 2017.

The International Monetary Fund expects Nigeria’s economy to shrink 4.3 per cent.

The central bank in September said inflation is likely to rise to up to 14.15 per cent at the end of December due to supply shocks as a result of the pandemic, which has curtailed economic activity and created disruptions.

Prices rose in September across the range of goods and services, rising more in cities than in rural areas, the statistics office said.

“The urban inflation rate increased by 14.31 per cent (year-on-year) in September 2020 from 13.83 per cent recorded in August 2020, while the rural inflation rate increased by 13.14 per cent in September 2020 from 12.65 per cent in August 2020,” its report said.

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