Surging prices of key food staples across major Nigerian markets in October are signalling a potential rise in food inflation, threatening to worsen the cost-of-living pressure on households.
A BusinessDay survey of Mile 12 and Ketu markets in Lagos found sharp increases in the prices of essential food items, pointing to a possible reversal of recent easing in food inflation, which stood at 19.59 percent in September.
It was found that a 50kg bag of foreign parboiled rice averaged N72,000 in October, up from N58,000 in September.
A 50kg bag of local parboiled rice rose to N65,000 from N54,000, while a 100kg bag of onions rose to N320,000 from N65,000 in September, a 392 percent increase. A 100kg bag of maize rose to N50,000 from N28,000, a 79 percent rise.
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Also, a 60kg bag of yellow garri rose 33.3 percent to N24,000 from N18,000, and a 60kg bag of white garri rose 7.7 percent to N21,000 from N19,500.
For staples like ogbono, the price of a big bag rose by 35 percent to N405,000 from N300,000, and a milk cup of the same item rose to N2,500 from N2,000.
Despite the sharp increase in some staples, some food items maintained their prices while others recorded marginal drops.
Tomatoes and pepper recorded the largest declines among the items surveyed. A big basket of fresh tomatoes sells for N50, 000 as against N55,000 sold in September.
Why prices soar
Traders blamed higher transport costs, tight supply and the festive season for the sharp increases in these staples.
“The cost of transporting food items has increased, and there is a shortfall in supply,” said Musa Idris, a trader at Mile 12 Market.
“The cost of bringing a bag of onions has jumped to N25,000 from the north to Lagos,” Idris said, citing fuel and diesel costs.
Aderonke Odulate, another trader, said prices usually rise ahead of Christmas and New Year. “Prices usually go up during the festive season. It is expected that the prices of rice and onions will make a rapid climb as Christmas and New Year approach,” Odulate said.
Rotimi Dairo, a trader at Ketu Market, said some traders were stockpiling grains such as rice and maize for the season.
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“Some traders believe prices will be higher in December, so they are stockpiling to get higher profits,” Dairo said. “This is causing a current supply shortfall and a surge in grain prices.”
Nigeria’s headline inflation in September was 14.63 percent according to data from the National Bureau of Statistics.
Food inflation edged up to 19.59 percent in September from 19.57 percent in August, after easing from 20.31 percent in July.
Several analysts project a higher rate in October. “With the sharp rise in onions, maize and rice prices, we are going to see a sharp rise also in food inflation in October,” said AfricanFarmer Mogaji, an agric expert and CEO of Agbado Value- Chain Ltd.
“These are staples mainly consumed by households,” he added.
Nabila Mohammed, a research analyst at Chapel Hill Denham, said food inflation is expected to edge higher in October.
“We saw a sharp decrease in food inflation in August and a marginal decline in September owing to the harvest season. Harvest season always tends to water down the increase in food inflation,” she said.
“We are no longer in the harvest season; prices are expected to edge higher, especially with the rise in transportation costs,” she added.
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Josephine Okojie-Okeiyi is a journalist with over five years’ reporting experience. She writes on industry, agriculture, commodities, climate change, and environmental issues.
She is fellow of Thomson Reuters Foundation and Bloomberg Media Initiative for Africa.
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