No Respite for Food Prices Amidst Onion Scarcity

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Tuesday, November 10, 2020 / 12:10 PM / by CSL Research / Header Image Credit: Kampala Dispatch


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Recently, the price of onions, one of the most commonly used vegetables in Nigeria has risen by about 200%. Added to the fact that onions are usually not widely available towards the end of the year, our findings show that the significant increase in price can be attributed  to flooding, poor harvest, COVID-19 disruptions and poor storage facilities.  

 

Kano, Jigawa, Kaduna, Bauchi, Plateau, Sokoto and Kebbi are some of the major producers of onions and many of these states have been affected by flooding according to media reports. There are also reports that there are no adequate measures put in place to store onions which is usually produced on a large scale during the dry season. 


The pandemic induced disruptions to the food supply chain has caused a hike in food prices generally across the country. Prices of inputs such as fertilisers have also increased significantly.  

 

We note that, food inflation which makes up c.50% of the inflation basket has been on the rise and have been the major contributor to rising inflation. From Boko Haram insurgency to Herdsmen-related attacks to border closure, food prices have been pressured in the last few years. Added to the increase in food prices, there has also been an increase in utility costs and the average Nigerian consumer is stifled. 


Recently, the President ordered the Central Bank of Nigeria (CBN) not to allocate foreign exchange to importers of food and fertilizer, a move many believed would worsen the food situation and lead to a greater risk of a food crisis. With fertilizer prices on the rise, many farmers may avoid the use of fertilizers which may result in poor crop yield.  

 

Food prices have been on the rise and the inflation data released by the National Bureau of statistics for September showed that food inflation rose to 16.66% in September from 16.00% in August.  While we do not expect the increase in food prices to abate, we are of the view that the government needs to take a second look at its overall agricultural sector strategy to avert a food crisis. 


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