November 2021 Food Data: The Same Old Narrative on Food Prices

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Thursday December 23, 2021 /  10:55 AM / by CSL  Research /  Header Image Credit: Financial Times

 

According to the selected food price watch data for November 2021 released by the National Bureau of Statistics (NBS), major consumer staples showed significant increases year on year and monthly. On m/m basis, save for Plantain, all food items rose considerably. This was reflected in the m/m increase in food inflation, which rose by 1.07% m/m.


It reflects the pent-up consumer demand in the yuletide season, which outweighed supply despite the main harvest season. On a y/y basis, across the widely consumed food staples, beans in the two variants surged higher; brown, sold loose (up 46.6% y/y) and white, black eye, sold loose (up 54.6% y/y). Also, Gari in its two variants, white sold loose (up 25.3% y/y) and yellow sold loose (up 22.8% y/y).

 

Since the reopening of the land borders in December 2020, there has been no respite, as food prices have continued to rise. This points to the fact that several factors remain unaddressed, spooking the gains associated with the land border reopening. Chief amongst them is the heightened level of insecurity in the food processing regions, which not only hinders farmers from going to their farms but also causes an increase in the cost of production. Farmers complain that at every level of production, bandits are bribed to have hitch-free farming and harvesting. Beyond bribing bandits during production, bandits are bribed while transporting the produce.

 

Though food prices have been on the rise globally, the factors behind the country's increasing food prices are peculiar. Though monetary interventions are currently more centered on the agriculture sector, yet these have yielded limited results over time. In our view, the government needs to pay attention to the structural issues affecting the entire food value chain and speedily address the problem of insecurity in food-producing regions. Looking ahead, despite the harvest season, we expect a m/m increase in food prices amidst the high demand associated with the festive season.

 

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Proshare Nigeria Pvt. Ltd.

 

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