FX Crisis Takes Toll on Food Prices

Eromosele Abiodun Despite the marginal recovery in the crude oil price from its January lows, Nigeria has continued to feel the downside impact of a weaker oil-price environment as prices of staples increased significantly in February.

Specifically, the price of staples, as measured by the Standard Chartered Premise Consumer Price Tracker (SCPCPT), increased 0.4 per cent month-on-month (m/m) in February.

Analysis of the tracker showed that grain and meat prices went up by 27 per cent and 30 per cent respectively. Together, they made up 57 per cent of the index.

According to Standard Chartered, food prices, reflecting downward seasonal influences, have kept Nigerian inflation relatively contained.

“Since August 1, 2014, when we first started capturing the prices of Nigerian food staples, the SC-PCPT has fallen 0.92 per cent. This is less pronounced that the 1.3 per cent fall observed through end-January, suggesting that price increases are now more prominent. Our tracker is unique in that it uses crowdsourcing technology to measure price trends in real time. We expect to see more pronounced price increases in the coming weeks, reflecting pass-through from the cancellation of RDAS auctions and temporary bottlenecks in fuel availability, “they stated.

They added that the 0.4 per cent m/m increase in the SC-PCPT marks the start of a more pronounced inflation trend.

The bank said: “Seasonal influences on food prices have contained headline inflation so far, despite increased FX pressure on the Nigerian naira (NGN) and 25 per cent