Cost of food soars in Nigeria despite fall in global prices

Food prices in Nigeria have been on upward trajectory despite the fall in global prices. Cost of food has increased in the country as a result of hike in transportation cost due to fuel scarcity.

In September, Nigeria’s inflation rate climbed to the highest in more than two years as food prices surged before falling marginally from 9.4 percent in September to 9.3 percent in October, still exceeding the central bank’s target for the fifth consecutive month.

A recent market survey by Businessday on the prices of food items in some selected market in Lagos shows that prices are much higher compare to a month ago which market sellers attributed to the scarcity of fuel and high transportation cost. Comfort Adegoroye, frozen food trader at Ile-Epo market, Abule-egba, said that “food prices have increased because of the high cost of transportation and the poor power outrage in the country.”

“I normally transport my cartoon of turkey and chicken for N2, 500 from the market to my shop now I pay N3, 200. The transporters are complaining of fuel. I still buy fuel above the official rate to power my deep freezer for my goods. I bought yesterday at the rate of N120 per litre,” She said.

This shows a 28 percent increase in transportation cost from the market to her shop. She noted that as a result of these additional expenses the final consumers have to pay more.

Staple foods are expected to cost more for the remaining part of the year due to import restriction which has increase the cost of production for manufacturing firms, and the recent scarcity of petrol that has led to increase in the price of transportation.

Lines at petrol stations in the major cities are blocking traffic as Nigeria, Africa’s largest crude oil exporter runs out of domestic fuels due to a payment battle between independent retailers and the government.

The price of crude oil dropped by more than 50 percent since last year, the second-biggest annual decline ever, hitting a five-and-a half-year low. Oil prices have had a knock-on effect on the global price of food.

According to the Food and Agricultural Organisation (FAO), major food commodity prices fell in November, reversing about half their rise in the previous month, as the cost of internationally-traded staples, except for sugar, fell across the board.

Food prices have also been on the increase in the North East before the fuel shortages due to rising input prices following continued unrest in the region.

Abdurahaman Modibbo Girei, President, Adamawa Chamber of Commerce and Industry told BusinessDay that most farmers have abandoned their farms and fled, while major borders have been shut owing to high insecurity in the state

“Farmers have deserted their farms and fled to from hostile parts of the state, to less volatile areas,” Girei added.

Josephine Okojie