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Despite drop in inflation rate, prices of goods, foodstuff on the rise

Although the inflation rate has been dropping for the last four months, checks across major states show that prices of goods and foodstuff are still…

Although the inflation rate has been dropping for the last four months, checks across major states show that prices of goods and foodstuff are still on the rise.

According to the latest Consumer Price Index (CPI) July 2021 Report released on Tuesday by the National Bureau of Statistics (NBS), inflation dropped by 0.37 per cent to 17.38% in July, from 17.75% recorded in June.

The 17.38% July inflation rate is said to be the lowest in six months as the rate in May was 17.93%, dropping from 18.12% in April, which was also lower than the 18.17% recorded in March. The report also stated that despite the drop, prices continued to rise in July but at a slower pace than it did in June.

Our reporters checked prices of goods across some major markets in the north and south and found that food prices are still on the high side.

Traders in Abuja confirmed slight increases in prices of some commodities over the past two months. Abdullahi Nasiru, who sells provision, said a measure of white beans now sell for N800 from N600 and red beans go for N1000 from N800;  a 5-litre of groundnut oil rose from N5300 to N5500 while a 3.5-litre of palm oil is N3700 from N3500; a bag of local rice now sells for N23000 to N25000.

However, a meat seller, Olaide Adam, said meat price has been reduced to N2000 per kilo from N2,400 and N2,200, two months ago, adding that the reduction is because of the availability of more livestock in Abuja.

A grocery seller, Haruna Ibrahim, said a basket of sweet potatoes is N1000 while that of Irish Potato is N1400.

In Kano state, prices of food commodities are still high based on the last one week price comparison. At the Singer Market, 50kg of foreign rice sold at N26,500 as against N26,000 while 50kg made-in-Nigeria rice is N23,500 but sold for N23,000.

A 50kg of sugar which sold at N18,500 earlier is now N19,420 while a carton of spaghetti made in Nigeria rose from N4,400 to N4,800 and foreign spaghetti rose from N5,400 to N5,900.

At the Dawanau International Grain Market, 100kg of rice is sold at N55,000, while 100kg of rice is N54,000; 100kg of maize is N24,500.

At Yankaba perishable market, a big tomato basket is N9,000, rising from N6,500; a bag of pepper is N17,500 from N15,300 last week.

A survey across Lagos shows slight increase in some items. At Agege market, Lagos State, a 50kg of baking flour sold at N20,000 from N19,500, last month. A small bag of brown beans (Oloyin) has sold for N39,000 for three months while a big bag of white beans at Ile-Epo market maintains N70,000 to N71,000.

A carton of Golden Penny Spaghetti now sells at N5,200. It was sold at N5,000 last month. Dangote and Honey Well Spaghetti, it was gathered, are scarce in the market.

Blame farmers’ crisis, forex issues — Experts

Some economic experts have said more needs to be done to achieve a significant drop in the rate of inflation. Analyst at Cordros Capital, Abdulazeez Kuranga and Chidera Mbelede, while explaining the inflation components, said food inflation snapped a two-month consecutive increase as it moderated by 25 basis points (bps) to 0.86%  in July compared to 1.11% month-on-month (m/m) in June which they said, is the lowest in four months.

“We think the slower m/m increase was due to the impact of green harvest in the country’s southern parts, which outweighed the lean season in the Northern region. The breakdown provided showed that prices of farm produce moderated to the lowest since October 2015 while the processed food is the lowest since February 2020,” they said.

They noted that the Northern part of the country continues to experience the lean season as they await the commencement of the harvest season in September.

They also said the halt in the sale of foreign (forex) to Bureau De Change (BDC) operators by the Central Bank of Nigeria (CBN) pushed the naira to N525 to a dollar and this could have an effect on the August inflation rate.

“However, the country’s Southern parts continue to enjoy the green harvest, although we note that prospects of flooding could limit the impact in the near term. Besides, security challenges remain elevated in the country, while the increased cost of farming inputs and tools could also constrain activities on farmlands.

“Sequentially, we see food prices reverse the slow growth experienced in July and trend higher in August. Accordingly, we expect food prices to increase by 1.06% m/m in August, translating to a y/y reading of 20.29%,” they said.

By Francis A. Iloani, Faruk Shuaibu (Abuja); Sunday M. Ogwu, Christiana T. Alabi (Lagos) & Ibrahim Musa Giginyu (Kano)

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