BusinessIncrease in price of milk, coffee, egg, others, drive...

Increase in price of milk, coffee, egg, others, drive food inflation in Nigeria

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The prices of food items in the country have been rising persistently, causing anxiety among consumers, even as the latest report from the National Bureau of Statistics (NBS) reveals that the closely watched food index increased by as much as 21.03% year-on-year in July 2021.

According to the report from the foremost statistical body in the country, food inflation was driven largely by increases recorded in the prices of milk, cheese and eggs, coffee, tea and cocoa, vegetables, bread and cereals, soft drinks as well as meat.

Food inflation has been a major stumbling block for the Nigerian economy and it has been significantly exacerbated by events such as the initial closure of land borders in 2019, the covid-19 pandemic lockdown in 2020 as well as the aftereffect of the #EndSARS protests in most strategic cities in the country. The rising spate of banditry and kidnapping ravaging the northern and middle belt regions has also seen countless farmers killed, maimed or kidnapped in farmer-herder clashes, leading to drastic reductions in agricultural productivity and a consequent rise in the prices of food items.

A cursory look at the historic day from the NBS, reveals the food composite index has surged by 34.5% since the closure of the land borders in October 2019, also a 29.2% increase from the first outbreak of the covid-19 pandemic in February 2020.

The recently released inflation statistics for the month of July showed that one of the items that have significantly increased in price includes carbonated drinks such as Pepsi, Coke, Bigi and others which now sell for N150 in most areas of the country, as opposed to N100 earlier in the year, representing a 50% increase in price.

What Nairametrics data says

Data from Nairametrics Research revealed that the prices of food items have indeed increased significantly, especially in the last one year. For example, a 400g tin of Loya milk that was sold for an average of N1,000 in July 2020 has now galloped to an average of N1,500. This represents an increase of 50% in price.

Visits to some Supermarts by members of Nairametrics Research team revealed that a 50g container of “Nescafe classic” has increased by 40% to sell for N700 compared to N500 recorded a year ago. This is in line with projections reported by Nairametrics earlier in July 2021, that the price of coffee in Nigeria is likely to go up following global price increases in the commodity.

The report had attributed the projected coffee price increase in the Nigerian market to a rise in the price of coffee bean in the international market as a result of drought in Brazil which brought about the first supply shortage in the coffee market in four years.

Similarly, the price of a crate of eggs, which sold for an average of N970 as of July 2020, is now sold for an average of N1,600, representing an increase of 64.9% year-on-year. The increase in the price of eggs has been attributed to the general increase in the price of chicken feeds, as a result of a significant hike in the price of maize and soya, which are major ingredients in the production of chicken feeds.

In the same vein, the price of bread also increased, due to the spike in the price of flour and vegetable oil. Notably, the price of a 50kg bag of flour surged from an average of N11,000 to N15,000 within the space of 1 year, while a 25kg gallon of vegetable currently sells for an average of N25,000 compared to N13,500 recorded in the corresponding period of 2020.

Bottom line

The price of food items continues to record significant increases, with most of them not returning to their initial prices, despite signs of moderation in the inflation figures. The fact remains that structural problems, insecurity and a struggling macro-economic space have affected the prices of food items, and this is eroding the purchasing power of average Nigerians.

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