No Respite As Price Pressure Persists - Pentad

Proshare

Friday, July 06, 2018     10.35AM  / The PENTAD – Urban Retail Price Tracker         

 

Our Urban Retail Price Tracker—the PURP index— logged an increase of 0.81% MoM to 105.7 pts in the month of June (vs 0.77% MoM in May). Despite declines in the consumer, brewery and cement space, price increases across the commodity and oil & gas basket, on the back of higher crude oil price and the Ramadan festival largely neutered the decline to cause an overall increase in average retail price. Across board, volumes were generally higher.

 

Average prices in the brewery sector declined by 0.08% MoM after three consecutive months of price increases. Notably, the price change reflected the intense competition for market share even as Tiger beer, Castle Lite and Budweiser began to gain momentum. Star (-0.77%) and Gulder (-0.77%) witnessed the largest price decline. On volumes, feedback from retailers revealed an increase in volumes during the month.

 

Retailers extended price discounts on products in the consumer sector on the back of the Ramadan festival. Overall prices declined 2.95% MoM. Amongst the products that witnessed decline in prices include Golden Penny pasta (-17.4%), Milo (-15.5%) and Honeywell pasta (-11.4%). Volumes were higher across board.

 

The commodities basket increased 1.06% MoM in June. Like previous months, palm oil -1.67% price was down reflecting increased supply of the commodity. Elsewhere, both vegetable oil and rice witnessed price increases of 1.62% MoM and 2.24% MoM respectively. Feedback from retailers linked the general increase in price of both vegetable oil and rice to the Ramadan festival which made it possible for retailers to raise prices.

 

Retailers extended price discounts on products in the consumer sector on the back of the Ramadan festival. Overall prices declined 2.95% MoM. Amongst the products that witnessed

decline in prices include Golden Penny pasta (-17.4%), Milo (-15.5%) and Honeywell pasta (-11.4%). Volumes were higher across board

 

Prices in the oil & gas sector expanded 1.36% MoM with price of lubricants (+0.24%) and cooking gas (+4.0%) both tracking higher. Higher price across both products reflects higher crude oil price.

 

The cement sector saw price declines (-1.3% MoM) in the month of June. On volumes, retailers noted lower sales volume on the back of higher rainfall in the month.


Proshare Nigeria Pvt. Ltd.

 

Valuation of Coverage Companies


 Proshare Nigeria Pvt. Ltd.

 

The PURP Index

Proshare Nigeria Pvt. Ltd.  

 

To determine how retail prices have moved on average, we fashioned out a Pentad Urban Retail Price Index (PURP) which adopts April 1st to April 8th as a base period. The PURP index accords 30% weightings apiece to consumer and commodities prices, 20% weighting to the brewery basket with a further 20% distributed evenly between cement and cooking gas prices.

 

Across the sectors, price evolution is monitored on a weekly basis while we adopt 0.6%, 0.0%, and -0.6% as indicators for volume expansion from prior week, no change in volumes, and week on week output contraction (respectively) in a manner slightly akin to CBN’s PMI methodology.

 

Contact The ARM Research team for Full report - research@armsecurities.com.ng

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd. 


 

Related News

1.       Price Pressure Bites Deeper – The Pentard Urban Retail Price Tracker

2.      From Russia with Tears and the New Economic Disorder - LBS EBS – July 2018

3.      Implications of the Late Signing of the Budget and The Impact on the Nigerian Economy

4.      Nigeria Must Give Top Priority to Managing its Liquidity-Ayo Teriba

5.      Nigeria Records Strong Growth in Foreign Trade

6.      Weekly Economic and Financial Commentary – WE 14th June 2018

7.      Nigeria’s Foreign Trade: Review and Implications

8.     Nigeria’s Inflation Declines Again To 11.61% In May

9.      Headline Inflation Drops to 11.61% in May 2018; 0.87% Lower Than April 2018 Rate

10.  How to Solve Income Inequality in Nigeria

11.   Inflation Rate to Drop but New Pressure Emerging

12.  Headline inflation to decline further to 11.8% in May 2018 

READ MORE:
Related News
SCROLL TO TOP