The Nation Newspaper

Tag: prices

  • Food prices to go up, says expert

    Farmers’ Development Union (FADU) Programme  Coordinator, Victor Olowe has alerted of food price increase in the year.

    According to him, factors that would cause increases in food prices have not been resolved. He listed these as   speculation in agricultural commodity markets by sellers.

    He called for increase in farm production.

    Though most farmers are ready to boost production, he said the institutions, the government as well as management of land make this impossible.

    He cautioned that high food prices were likely to continue except there were  efforts to strengthen small-scale farming.

    With climate change, he expressed fears that some sectors of the economy could see short rainfall early this year while the rest of the country will experience low or no rainfall which will affect farming and push up the cost of food.

    There is also serious concern with the prospect of labour shortages in the farms. Growers are grappling with high cost of hiring labour, adding that the situation is critical and demands action if growers are to be competitive.

    He noted that some of the traditional migrant labour are ‘aging,’ while  other farm workers have moved on to other jobs.

    Growers are finding it difficult to get agric workers at lower costs, he added.

    Labour issues would continue to hamper production, he warned.

  • Experts advise investors on low share prices

    Investment and financial experts have advised discerning investors to take advantage of the historic low prices at the Nigerian stock market ahead of the expected rebound of the economy and the capital market  next year.

    At a one-day stock traders and investors summit organised by Investdata Limited in Lagos, experts said the Nigerian economy and the capital market are on the verge of recovering.

    Chief executive officer, APT Securities & Funds Limited, Alhaji Garba Kurfi, noted that the Nigerian Stock Exchange (NSE) has recorded negative double digits growth for the third consecutive year, beginning in 2014 when it was the worst performing equities market in the globe after losing 16 per cent.

    He pointed out that the third year of negative growths negates the history of the Nigerian stock market.

    According to him, many stocks on the exchange are selling at their worst price after listing their shares for trading, just as many recorded their worst prices in decades during the current year, a situation discerning investors would be watching keenly and taking advantage of the rock bottom prices to harness value in the coming months.

    He noted that a situation where market capitalisation of companies listed on the NSE has lost a cumulative N3.2 trillion in 22 months to October 2016 may not arise again in the next 15 to 20 years.

    Managing Director, High Cap Securities Limited, David Adonri noted that the capital market is awash with opportunities for investors whether the economy is growing or not, with falling equity prices an opportunity for bargain hunting.

    He said investors need to reverse their strategy at a time like this and embrace counter-cyclical stocks because they do well at this time.

    “This group is composed of companies with dividends and massive balance sheets or steady business models that are recession-proof. These high yield stocks such as fast-moving consumer goods, pharmaceuticals and tobacco tend to hold up better,” Adonri said.

    According to him, recessions can provide an opportunity to buy assets cheap and the best time to invest, meaning investors can pick up stocks, bonds, mutual funds, real estate, private businsses and more for far less than they could just a few years before.

    “Only those who improve their position in the market will smile next year because those who threw away their assets will come to beg you for them later,” Adonri said.

  • FAO: declining food prices may affect farmers

    FAO: declining food prices may affect farmers

    Declining prices can thwart international efforts to eradicate hunger and  poverty unless steps are taken to guarantee decent incomes and livelihoods for small-scale producers, Food and Agriculture Organisation (FAO) Director-General José Graziano da-Silva has  said.

    Globally, food prices are believed to be back to their long-term downward trend in real terms, as supply growth outpaces demand.

    This follows the price surges experienced during the 2008 to 20 12 and a prolonged period of volatility in food markets, Graziano da Silva told Agriculture and Trade Ministers and other government officials and experts, attending a high-level meeting on agricultural commodity prices at FAO’s headquarters in Rome.

    “As policy makers, you are confronted by the challenge of keeping nutritious food affordable for the poor, while ensuring good incentives for producers, including family farmers,” he added.

    “Low food prices reduce the incomes of farmers, especially poor family farmers who produce staple food in the developing countries. This cut in the flow of cash into rural communities also reduces the incentives for new investments in production, infrastructure and services,” the FAO Director-General said.

    He underscored the need to consider the current decline in agricultural commodity prices in the context of the international community’s efforts to achieve the 2030 Agenda for Sustainable Development and the Sustainable Development Goals.

    In a video address to the meeting, World Trade Organisation (WTO) Director-General Roberto Azevêdo said that “under the right circumstances” trade provides people with opportunities to join global markets and helps to create incentives for producers to invest and innovate.

    The “historic decision” struck in Nairobi in December 2015 by WTO members to eliminate agricultural export subsidies, according to Azevêdo will “help level the playing field in agriculture markets, to the benefit of farmers and exporters in developing and least-developed countries.”

    For his part, Graziano da Silva pointed to the potential of trade in contributing to global food security and better nutrition, specifically underlining its potential role as an “adaptation tool” to climate change.  Countries that are projected to experience decreasing yields and production due to climate change, will have to resort to the global markets to feed their populations.

  • Farmers decry high feed prices

    Record-high feed costs this year have not been kind to many farmers who raise poultry, livestock and those in the feed processing business.

    A significantly lower than anticipated supply of corn (maize) has continued to drive an increase in corn prices.

    As a result, domestic prices have increased per tonne. Consequently, poultry producers are struggling to maintain operations due to inflated feed prices.

    Speaking with The Nation, Vice–President, Association of Small Business Owners of Nigeria (ASBON), Mr. Stephen Oladipupo,  said higher maize costs and low quality products have forced livestock farmers to consider a multitude of various ingredients for animal feed. Some  farmers, he explained, now  use  a mixture of products, including oil seed products and house hold wastes.

    Corn and Soybean prices, he noted, have soared following the prospect of higher-than-expected demand. Farmers across the country, he added, would struggle to achieve profitability this year with high prices of corn and soybeans.

    He said the poultry industry is confronting great challenges as feed accounts for roughly 70 per cent of production costs. He expressed concern that what the industry is witnessing is not an occasional spike in corn and soybeans.

    As a result, Oladipupo said producers have continued to face persistent tighter profit margins. He said producers are seeking alternatives to corn feed with limited success. Some farmers, he maintained, are using low-quality feed as they cannot raise domestic prices for poultry to offset feed costs.

    With increased production of livestock products, farmers have expressed fears that the industry will be confronted with decreasing supply of animal feeds across the country. Minimum poultry production costs, which encompass primarily, feed and energy expenses, have increased.

    A prolonged rise in their prices has squeezed farm income, forcing some producers to cut spending or turn to their banks for help.

    Oil seed product is now prominent  as farmers are constantly seeking ways to boost poultry production at a cheaper cost. But they cannot drop prices because the most essential input in the quality and quantity of raising animals is animal feed.

    On average, poultry feed accounts for 70 per cent of total production costs.

  • Again, crude oil prices crash

    Oil prices fell slightly at the weekend, remaining near the previous day’s highs, on the prospect of talks by exporters about ways to prop up a market grappling with a supply overhang.

    Brent crude futures were down 19 cents a barrel higher at $45.84 per barrel by 1000 GMT (0600 ET), from a three-week high of $46.66 earlier in the day.

    United States West Texas Intermediate (WTI) crude stood at $43.41 a barrel, down by 8 cents after touching its highest level since July 25, at $44.17 per barrel.

    Both price benchmarks rose more than 4 per cent last Thursday after Saudi Arabia’s energy minister Khalid al-Falih said oil producers would discuss potential action to stabilise oil prices during a meeting next month in Algeria.

    “Yesterday (Thursday) was a big move in reaction to the Saudi oil minister’s comments. Now today (Friday) there is a reassessment, but the comments are probably not enough to trigger a sustained rally,” Olivier Jakob of consultancy Petromatrix in Zug, Switzerland said.

    An outlook published by the International Energy Agency (IEA) that said it expected the supply and demand balance to tighten towards year-end also supported prices.

    Traders said a drop of 8.1 per cent in China’s oil output in July, to a five-year low of 16.72 million tonnes, also lifted prices because it would mean Asia’s biggest economy has to import more crude.

    Despite the output fall in China, the world’s biggest energy consumer, the market impact is mixed as its refined product exports are increasing.

    “To be bullish, there would also need to be a drop in refining output,” Jakob of Petromatrix said.

    Oil prices are still more than 12 per cent below their last peak in June, as brimming storage tanks and production that exceeds consumption weighs on markets.

    Iran slashed its September official selling price for light crude to Asia by $1.30 a barrel, the latest sign that exporters are willing to accept discounts in return for market share.

    AB Bernstein said global oil production rose almost 0.8 million barrels per day (bpd) in July from the previous month, to 97.01 million bpd, while commercial inventories increased by 5.7 million barrels to 3.09 billion barrels in June.

    Despite cheap crude feedstocks prices, analysts said refinery margins, known as cracks, were poor as refiners continued to make more fuel than the market can absorb.

    For July, Bernstein put Brent cracking margins at $3.02 per barrel (down $1.83 from June); U.S. Gulf Coast cracking margins at $5.06 a barrel (down $0.03).

  • Food prices go haywire

    Food prices go haywire

    Burdened by the 69 per cent hike in fuel price, galloping inflation, continued weakening of purchasing power, amongst others, Nigerians now face a more daunting task of feeding as prices of food items go out of their reach. TONIA ‘DIYAN and TAIWO ADEYANJU report.

    Isabel Osakue, a caterer with over 12 years’ experience, was excited after securing a juicy catering contract. For her, the proceed from this job would go a long way in finishing her housing project, already at an advanced stage. But getting to the Mile 12 market, Lagos, Osakue was shell-shocked at the sudden rise in price of food items, especially tomatoes and pepper.

    According to her, at off season of a commodity like tomatoes, a basket usually sold for N4, 000. It was therefore surprising to her when she was told the same basket now sells for N28, 000.

    The development has since left Osakue torn between the devil and the deep blue sea-either to ask for money from her client, who seemed unwilling to increase the contract fee; compromise her cooking standard by reducing cooking ingredients, or simply making do with the very little profit margin that would be left for her from the job.

    Similarly, a civil servant, who identified himself as Mr. Suleiman Idris, told The Nation Shopping of his shock when his wife returned home to show him the four pieces of tomatoes she bought for N500. Crest fallen, Idris said he fears for his continued ability to effectively feed his family if the situation persists.

    The above scenario captures the picture of the new challenge now confronting Nigerians across the country.

    Across the length and breadth of various markets visited earlier in the week, both traders and shoppers were seen lamenting the situation. Several shoppers had to cut down drastically on the quantity of items they had earlier planned to buy. Sadly, even at that, the amount spent remained the same though for smaller quantities of items.

    At Mile 12 market, for instance, a shopper who gave her name as ‘Mama Sunday’ explained that the tomatoes she bought for N4, 000 remained the same quantity she usually buys for N500. She may not be exaggerating.

    A survey across markets in Lagos showed that a basket of tomatoes, which used to sell for between N3, 500 and N4, 000 now sells for as much as between N25, 000 and N30, 000.A basket of pepper previously selling for N5, 000 now costs N27, 000;Bell pepper (Tatase) was previously N5, 000 per basket but now sells for N30, 000 per basket. In all of these and interestingly, the cost of a basket of Onions dropped from N9, 000 to N8, 000. This, the traders attributed to the fact that it is the season for the commodity.

    In the staple food segment, a 10kg bag of Semovita was previously N2, 100 but now N2, 400; 5kg cost N1, 300 while 2kg and 1kg cost N550 and N280 respectively.A 10 kilograms bag of Semolina is now N3, 000 as against the former N2, 200. 5kg and 2kg of the item cost N1, 700 and N700 while 10 and 1kg of another brand of the same item (Mama Gold)sell for N2, 950 and N300.

    For lovers of beans, it is not a particularly good story, as the price now ranges from N11, 000 to N27, 000. In the rice category, Tomato ricecost N15, 000 from N13, 500, Apropedro rice  is N17, 300 from N12, 500, Brazil rice N17, 000 from N15, 000 and Aroso riceN13, 500 from N12, 500.

    A bag of sugar now cost N11, 000 from N9, 200, Mr. Chef Salt sells for N1800 from N1, 200. Dangote Salt didn’t change in price whileAnapuna Salt can no longer be found in some markets.

    At the pasta section of major markets, a carton of spaghetti cost N3, 300 from N1, 800. A carton of Minimee noodle now cost N1, 300 instead of the former N1, 150, Chiki noodles cost N1, 750, Indomie noodles, Hungry man size and Super pack cost N2, 350, N2, 400 and N1, 450 respectively. Golden penny noodles sells for N1, 200, Honeywell noodles goes for N1, 200 whileCherrie noodles now cost N1, 200.

    25litres gallon of Kings vegetable oil increased to N 9, 300 from N8, 800, 10litres is N4, 500 from N3, 500 and 5litrs N2, 200 from N1, 600. 5litre palm oil cost N1,200 jumping high from its former N1, 100, 10litres palm oil has increased by a thousand naira to N3, 200 and 25litre palm oil now sells for N7, 500 from N7, 000, showing a N500 increment.

    Soup seasoning has increased by two percent with 50 sachets of Gino tomato paste selling for N3, 200, Tasty Tom cost N3, 100 for 50 sachets. Gold and Sonia sachet cost N2, 400, Rosa tomato paste is N2, 500 and the pepper mix N2, 800. Other soup seasoning like Maggi and Knorr cube cost N400 and N450 per pack, Maggi Star N300, Chicken flavour N300, Maggi Suppy sells for N250 and N270, Maggi chicken N550, Maggi crayfish N700.

    Spices like a rolls of Cittos, Gino thyme and curry cost N100 each, Tiger curry and thyme cost N80 each, Nora jollof,  friedrice, Kitchen  Glory, Mevina each cost N220, pack of Benny cost N950, Jolly bigger and smaller pepper cost N150 and N70 respectively, and Ducross curry and thyme cost N120 each.

    Traders spoken to by The Nation Shopping attributed the price increase to a sharp increase in transportation cost of their commodities- a direct response to the recent 69 per cent increase in fuel price. Yet, others blame it on the restriction now placed on importation of certain food items, and the tightening noose of the Nigeria Customs Service on smuggling activities.

    For instance, the hike in the price of beans, traders allege, is as a result of restriction placed on importation of the commodity, which is usually sourced from the neighbouring countries of Niger and Chad Republic.

    According to the Secretary of Tomatoes Sellers Association, Mile 12 branch, Lagos, AlhajiBiliya Adam, supply and transportation of tomatoes from the North has drastically affected prices of staple items.Similarly, the Secretary of Daleko Market, Mushin, Lagos, Mr. Biola Owolabi, said the hike in prices of staple items has affected everyone including retailers, wholesalers and manufacturers at the market.

    Mrs. Modinat Badmus, a trader at the Iponri Market in Surulere, said patronage in the market is now marred by low turnout of shoppers. She blamed this on the rising cost of commodities.

    “A dozen of peak milk we used to buy for N450 now sells for N480, even five pieces of sugar we used to purchase for N250 is now N275,” she said.

    A trader at the Sabo Market in Sagamu, Ogun State, Miss. DeolaAjayi, said prices of items they bought from producers had increased.

    Ajayi said many shoppers had reduced their list, saying staple items such as 10kg of  Semolina has increased from N1,800 to N2,800, a bag of sugar which used to sell for N7,000 to N10,000, among others.

    The increase in price is not only applicable to staple items.A housewife, Mrs Omotayo Babajide, who bought local clothing material in large quantity for a ceremony, said the trader she bought the same item from last week had increased it by N400. She said the trader claimed that the price was increased by the manufacturer. This, she said, left her with no choice but to increase the retail prices of her items to cover cost and make a small profit margin.

    The price increase has also left a sour taste in the mouth of traders of non staple items. For instance, Mr. Abdulwahab Abdulkabeer, who deals in men’s wears at the Idumota Market, complained of low patronage and turnout of buyers.

    Also, at Yaba Market, Alhaja Oluwayomi Owolabi disclosed that traders have been experiencing low turnout of shoppers since the beginning of this year. For traders, who display their wares for sale till late night, the challenge of illuminating their stall is a worry for them, considering the cost of fueling their generators which is now seen as a luxury.

    Online shopping platforms are also not left out. For shoppers on the platforms, it is double losses for them. First, they have to pay for the increase in commodity price and pay more for delivery services.

    NosaIdehen, Founder, WesternMall Nigeria Limited, an online auction platform that deals with direct sales, said the main challenge for his kind of business was delivering of goods purchased. His words: “As expected the tariff involved in delivering to customers will increase. Because we always find ways of making shopping easier and cheaper, we intend to use different drop points around Nigeria so that customers will be able to pick up their items at the closest drop off point saving cost.”

    SPAR Nigeria’s spokesperson, John Goldsmith, also agreed that the new fuel price is likely to affect The Hypermarket business and its numerous customers.

    His words: “SPAR Hypermarket stores are part of the community and the whole eco-system of the country and hence the impact of the strike on SPAR store will be same as other business establishment. Raising fuel prices definitely impact the operation of the stores in both short and long run. As a part of the business community, we aspire for stable business conditions which enables concrete decision making and helps align actions for enhancing shopper experiences.”

    Although he said there has not been any sign of panic buying across its stores, the situation, he explained, may induce temporary poseponement of purchase and would never boost sales in a long run.

    Goldsmith explained that in the given economic scenario, the cost of inflation not only affects price of the products, but also the business operating cost.

    For online retail store Gidimall boss, OsamedeEvbakhavbokun, the new fuel price has affected his business and in actual fact it is still affecting it. The price for all products has increased and as such reduced sales as customers and client are being cautious, taking their time to see what will happen in the coming weeks before they can make any purchase.

    “Yes, labour has advised Nigerians to stockpile their homes with food, though we are not into foodstuffs and perishable goods but even at that, the foodstuffs is actually too expensive to stock when a ball of tomato is about N150.00,” he said.

    Once there is an increase in price of products, it takes a little while before customers accept the change in price and it is eminent as the fuel price has increased the cost of all products.

    But all hope seems not lost. Adam explained that upon assurances from the Minister of Agriculture, Dr. AuduOgbeh, who promised to find a solution to the tomato “Ebola” virus epidemic, prices may begin to change. This probably explains why a basket of tomato dropped from N28, 000 to N25, 000.

    But for how long will Nigerians wait for the price drop?

  • With fuel price hike, food prices go haywire

    With fuel price hike, food prices go haywire

    In response to the 69 per cent hike in fuel price, the prices  of food and the other commodities have risen. TONIA ’DIYAN and TAIWO ADEYANJU report. 

    It started like a rumour penultimate Wednesday afternoon, and by the close of work that day, Nigerians were faced with the stark reality that fuel price had been increased by about 69 per cent. The Federal Government increased the pump price of premium motor spirit (PMS), otherwise known as petrol, to N145.

    Characteristic of every PMS price increase, the food stuff segment has responded to the increase. Across the various markets, food prices have skyrocketed, making survival  more tasking.

    According to the Secretary of Tomatoes Sellers Association, Mile 12 branch, Lagos, Alhaji Biliya Adam, the new fuel price has affected the supply and transportation of tomatoes from the North.

    The Secretary of Daleko Market, Mushin, Lagos, Mr. Biola Owolabi, said the hike in  prices  affected everyone including retailers, wholesalers and manufacturers.

    Mrs. Modinat Badmus, a trader at the Iporin Market in Surulere, spoke of a low turnout of shoppers as the prices she usually bought her goods had increased. This, she said, affected the retail price.

    She said prices of beverages, such as milk, sugar and others, had increased at the market where she buys them.

    “A dozen of peak milk we used to buy for N450 now sells for N480, even five pieces of sugar we used to purchase for N250 is now N275,’’ she said.

    A trader, who at the Sabo Market in Sagamu, Ogun State, Miss. Deola Ajayi, said the removal of fuel subsidy had affected traders as the prices of items they buy from producers had increased.

    Ajayi said many shoppers had reduced their list, saying staple items such as 10kg of  Semolina has increased from N1,800 to N2,800, a bag of sugar which used to sell for N7,000 to N10,000, among others.

    The increase in price is not only applicable to staple items as a shopper, Mrs Omotayo Babajide, who bought local clothing material in large quantity for a ceremony, at the Idumota market on Lagos Island, said the trader she bought the same item from last week had increased it by N400. She said the trader claimed  that the price was increased by the manufacturer. This, she said, left her with no choice than to hike the retail prices of her items to cover cost and make a small profit margin.

    The price increase has also left a sour taste in the mouth of many traders. For instance, Mr. Abdulwahab Abdulkabeer, who deals in men’s wears at the Idumota Market, complained of low patronage and turn out of buyers.

    Also, at Yaba Market, Alhaja Oluwayomi Owolabi disclosed that traders have been experiencing low turnout of shoppers since the beginning of this year. For traders, who display their wares for sale till late night, the challenge of illuminating their stall is a worry for them, considering the cost of fueling their generators which is now seen as a luxury.

    She, however, urged the government to make the product available for the masses.

    Online shopping platforms are also not left out. For shoppers on the  platforms, it is double losses for them. First, they have to pay for the increase in commodity price and pay more for delivery services.

    Nosa Idehen, Founder, WesternMall Nigeria Limited, an online auction platform that deals with direct sales, said the main challenge for his kind of business was delivering of goods purchased. His words: “As expected the tariff involved in delivering to customers will increase. Because we always find ways of making shopping easier and cheaper we intend to use different drop points around Nigeria so that customers will be able to pick up their items at the closest drop off point saving cost.”

    SPAR Nigeria’s spokesperson, John Goldsmith, also agreed that the new fuel price is likely to affect The Hypermarket business and its numerous customers.

    His words: “SPAR Hypermarket stores are part of the community and the whole eco-system of the country and hence the impact of the strike on SPAR store will be same as other business establishment. Raising fuel prices definitely impact the operation of the stores in both short and long run. As a part of the business community, we aspire for stable business conditions which enables concrete decision making and helps align actions for enhancing shopper experiences.”

    Although he said there has not been any sign of panic buying across its stores, the situation, he explained, may induce temporary preponement of purchase and would never boost sales in a long run.

    Goldsmith explained that in the given economic scenario, the cost of inflation not only affects price of the products, but also the business operating cost.

    For online retail store Gidimall boss, Osamede Evbakhavbokun, the new fuel price has affected his business and in actual fact it is still affecting it. The price for all products has increased and as such reduced sales as customers and client are being cautious, taking their time to see what will happen in the coming weeks before they can make any purchase.

    “Yes, labour has advised Nigerians to stockpile their homes with food, though we are not into foodstuffs and perishable goods but even at that, the foodstuffs is actually too expensive to stock when a ball of tomato is about N150.00,” he said.

    Once there is an increase in price of products, it takes a little while before customers accept the change in price and it is eminent as the fuel price has increased the cost of all products.

  • Why oil prices may not rise soon, by expert

    Why oil prices may not rise soon, by expert

    The oil prices dip is different from previous cyclical scenarios in which  prices don’t take so long to rebound, the Chairman of Society of Petroleum Engineers (SPE) Nigeria Council, George Kalu, has said.

    Kalu, who spoke at the Oloibiri Lecture Series and Energy Forum (OLEF) in Abuja, said besides oil supply glut, most of the oil consuming countries have huge stocks, which may considerably delay a quick rebound of the prices.

    He said: “With an all-time high crude oil inventory by the Organisation for Economic Co-operation and Development (OECD) countries, the oil prices dip this time around is different from previous cyclical scenarios. This was partly occasioned by the demand-supply landscape in the global oil market and need to hedge against supply shortfall to the OECD.

    “The emergence of oil supplies from the United States shale areas plus the decline in oil demand from Europe and North America has contributed to a large extent. Simple innovative technology deployed such as water shut-off, short radius horizontal sidetrack in existing assets will ensure low cost oil production.”

    According to him, this year’s theme Technological advances in hydrocarbon exploration and exploitation: Solutions to global oil price stability,”is pertinent coming in a low oil price scenario. It thus provides Nigeria with the unique opportunity of maximsing benefits from adoption of low cost technology in asset management as well as industry collaboration between buyers, suppliers and vendor with operators in the oil and gas industry.

    “It is our hope and expectation that through OLEF 2016’s theme and the subtopics, we will stimulate discussions aimed at mitigating the effect of low oil prices and helps chart the right course towards a sustainable future for the Nigeria oil and gas industry.

    “Permit me to mention that OLEF 2016 also coincides somewhat with 60 years of oil exploration and exploitation in Nigeria since the first discovery in Oloibiri in commercial quantity. During this period, Nigeria has operated within the league of oil producing and exporting nations. The industry has experienced much transformation along the way,” he said

    Speaker of the House of Representatives, Hon. Yakubu Dogara, said: “This year’s partnership demonstrates the hallmark of the cooperation between the Executive and Legislature on non-partisan professional body the opportunity to address and proffer common solution geared towards growing in-country capacity to meet the challenge posed by the ongoing reforms and divestments in the upstream sector and petroleum industry at large.

    “As Nigeria aspires to maintain its current growth forecast and sustain the year 2012 GDP growth rate of 6.48 per cent, Morgan Stanley has predicted that Nigeria is expected to become an economic power overtaking South Africa by 2025 in its terms of GDP.

    “The theme is timely given that the role of a strong local refining in maximising benefits for economic growth in a declining oil prices environment and linkages to the manufacturing industry as well as the agricultural sector; which creates growth in the real sector of the economy. This shall enable Nigeria achieve its desired growth aspiration.”

    He said the National Assembly shall consider and expedite the passage of legislation of the Petroleum Industry Bill (PIB) to enable the restructuring and deregulation of the downstream sector; thus, allow for competition in all segments including open access to the pipeline as well as providing a robust tariff mechanism for all players.

  • Consumers groan under rising food prices

    Consumers groan under rising food prices

    Prices of most staple food items have increased by as much as 60 per cent. The situation, triggered by prevailing economic realities, particularly crashing oil prices and weakening value of the naira, has left sour taste in the mouth of consumers. TONIA ‘DIYAN and TAIWO ADEYANJU report.

    Since mid-June 2014, when prices of crude oil started crashing, forcing the authorities to adopt measures to stabilise the naira, among others, prices of major staple food items in the market have hit the roof.

    Although checks by The Nation Shopping showed that prices of food items returned to normalcy shortly after the last festivity period, the continued drop in the exchange rate of the naira to other major foreign currencies especially the dollar, has seen prices of most food items rising by as much as 60 per cent.

    For instance, a bag of rice, which previously sold for between N8, 000 and N8, 500, now goes for as high as between N12, 500 and N13, 000, representing an increase of over five per cent. Also, a small bag of beans, which before now sold for between N11, 000 and N11, 500, has gone up to N12, 500. A big bag of beans, which was N19, 000 is now sold for N21, 000. Similarly, a big bag of garri costs N7, 500, while a small size bag costs N5, 000. groundnut oil, which sold for N9, 300, now costs N9, 500. From N1, 000, a five-litre pack of palm oil increased to N1, 400.

    Similarly, 10 bags of sachet water, popularly called Pure Water  goes for N1,000, up from the original price of N600. Same for a crate of eggs, which has gone up from N750 to N900. A 10- kilogramme of Honneywell wheat cost N1, 600, up from N1, 400.

     The Nation Shopping found that other food items have had their prices increase by about N500, depending on the market and the bargaining power of the consumer. The situation, according to some traders, who spoke with The Nation, is not likely to change unless there is significant improvement in the naira-dollar exchange rates.

    At present, the naira exchanges at between N260 and N250 to a dollar. Some traders say until there is a level of normalcy in the exchange rate, consumers would have to live with the price hike. Besides, they pointed out that there is need to finish selling items stocked during the dollar increment period before any relief can come to consumers. This means that Nigerians may have to tighten their belt, as the situation is not likely to abate any time soon. Although, there has been a slight increase in crude oil prices, the thinking is that the increase is not significant enough to inspire hope in consumers.

    The economic crisis is said to have pushed up the cost of production, forcing those producing and selling locally made items to increase prices. Some of them say because cost of raw materials used in production has gone up, and the raw materials are mostly imported, there is no way consumers would not be at the receiving end. For instance, producers of sachet water claim that the nylon used in packing the water is scarce and expensive, forcing them to queue up to purchase. This is why even drinking water is gradually getting out of the reach of the common man.

    The nation’s huge infrastructure gap is also not helping matters. Because of bad roads, for instance, cost of transporting these food items from farms in rural areas or their places of purchase to markets in urban centres where they are needed, has gone up. This explains why prices of some staple food items which ordinarily should be on the table of low income earners, have gone out of their reach. Some traders appear to have cashed in on the challenge of infrastructure especially road and electricity to sell at exorbitant prices.  Some of them argue that as long as the problem persists produce will remain high and out of stock.

    As a result  of hike in prices  of food items, owners and operators of restaurants and canteens have also jacked up their prices much to the agony of their customers. Some of them who spoke with The Nation Shopping, said they were left with no other choice than to increase the price of their meals since they purchase foodstuff at high prices. A food vendor at Ladipo in Mushin, Lagos, Iya Rukayat, said foodstuffs have become very expensive, attributing the hike to the unending fluctuation in the value of the naira.

    “Some food stuff merchants whom I patronise say they sell to make profit so, they will have to include all cost to the original price. I am left with no choice but to buy and also sell at exorbitant price to my customers,” she said.

    Iya Rukayat has reason to do so. Checks by The Nation Shopping on major markets within the Lagos metropolis showed that the price of a ‘paint’ of garri, which is regarded as a common staple food among low income earners, has increased. From its original price of N400, a ‘paint’ of garri sells for N500, depending on the brand. A full bag of yellow garri is sold for N7, 000. It was less than that few months back.

    As if the about 60 per cent increase in prices of food items is not enough to give consumers sleepless nights, food producers are projecting a more than 70 per cent increase by the middle of this year if the naira does not firm up significantly. The naira, having lost at least 30 per cent of its value against the dollar recently, is said to be largely responsible for driving up prices of most food items.

  • Food prices ease as supplies pick up after festivity

    Food prices ease as supplies pick up after festivity

    After the usual hike in the prices of staple food items during the Yuletide, TONIA ‘DIYAN reports that prices of food items have returned to normalcy. Some items sold in small quantities are now more, while others which were never available can now be bought. 

    It has become a tradition, especially in Lagos markets for prices of foodstuff and other commodities, to remain unstable or relatively high after festivities. But this year, the reverse is the case as major staple food items have either drop in price, become available or increased in quantity.

    Visits to some markets in Lagos and a survey on other major markets have shown that prices of commodities have dropped by more than 50 per cent having seen high level of irregularity since December last year, during the Christmas celebrations when some items were sold twice their usual prices. Ordinarily, prices should return to normal after festivities, but the reverse is the case with staple items, particularly in Lagos.

    Prices of pepper, tomatoes, onions and beans amongst other staple food items have dropped in most Lagos markets due to the dry season.

    At Mile 12 market in Lagos, The Nation Shopping observed that pepper and tomatoes are no longer as expensive as before. A tomatoes seller, simply known as Madam Ramota, confirmed that the price of the produce have reduced due to the season. “Before now, we sold a basket of tomatoes for N18, 000 and N25, 000, particularly at Christmas. It is cheaper now because it is the season for plenty of pepper and tomatoes, we sell for N3, 500 and N4000.

    At Mushin market also in Lagos, Mrs Olowu, a tomatoes and pepper seller confirmed that tomato is in its season- the reason the produce is cheap. “We buy a basket of tomatoes for N3, 500 and N4, 000, last month; we bought the same basket of tomato N17, 000 per basket,’’ she said.

    A basket of tatashe (bell pepper) cost N3, 500 against its former N7, 000 per basket. Ata rodo (small round pepper) which used to sell for N18000 and N17,000 per basket sells for N5, 000. Earlier, housewives avoided cooking with fresh tomatoes because of its high cost; they rather went for alternatives like tomato paste and try grinded pepper. Now N150 worth of tomato and pepper can make a pot of soup. This reduction in price, it was learnt, would last till April, after which there would be scarcity because rain would not allow the produce to grow properly, therefore, the little available ones will become expensive.

    Also at the market, price of onions has reduced. A basket of onion which was formerly N30, 000 sells for N13, 000 and N15, 000 now.

    According to Mrs Awoyemi, an onion seller in the market, “Baskets of onion comes in large quantities and are less expensive compared to last month when the produce was scare, few quantity available and very expensive too.”

    She however explained that the low price rate is not going to last for than two months before it becomes expensive again.

    Secretary, Tomato dealers in Mile 12 market, Lawan Bilya Adam, said the arrival of fresh tomatoes was the major reason that forced the price to reduce.

    He said: “We thank God that the price has significantly reduced due to availability of new tomatoes in the market. Even though the prices vary but we hope that they will be stable and come down finally to a reasonable level so that people can buy the basket without problem. The new commodity is supplied to market on daily basis. To that effect the price will come down.”

    The price of fish has remained relatively expensive, according to traders who sell the item. A fish seller at Oyingbo market known as Mrs Rashida Onanuga said fish is expensive. According to her, she buys a cartoon of fish for N18, 000, the type she used to buy for N12, 000 few months ago.

    Also at the stock fish section of the market, Steven Aguwamba and his brother Bethel Nwachukwu own a shop where they sell stock fish in bulk to people who resell. They buy directly from the importers. Stock , they said, is imported from Iceland and they used to buy from the importers for N45,000 or N35,000, now they buy between N38,000 and N50,000 and sometimes, N100,000 because the amount paid on a 40-metre container is about N1. 4million. They, however, advised that the government should help with the dollar exchange issue and fish sellers to grow the cat fish business in Nigeria instead of concentrating solely on crude oil.

    At Daleko Market, the price of a 50-kilogramme bag of rice ranged from N7,300 to N9,500.

    Mrs Yinka Okunola, a rice seller at the market, said the prices of rice went down due to availability of local variety.

    “The locally produced rice has penetrated the market and is competing favourably with the imported rice and this has forced a reduction in the prices of rice.

    “The lowest we sold imported rice was N10,000, but now with N8,500, you can purchase some of the various brands,” said Okunola.

    However, the costs of cartons of frozen turkey and chicken had gone up slightly.

    A carton of turkey goes for N8,000 from N7, 700, while the chicken sells for N7,000 from N6,500.

    Mrs Adijat, a dealer in frozen foods, attributed the price change to increase in foreign exchange rate and epileptic power supply.

    At the Iddo market, a bag of beans sells for N16,300, from the N15,900 it sold last year.

    At the Whitesand Market at Oyingbo, a 25-litre keg of vegetable oil goes for N6,000, an increase of N200 from the N5,800 it sold previously.

    A 25-litre of palm oil goes for N6,850 from N6,600, the drum  costs N50,500, while the price of oil in bottle remained N250.