• Tuesday, May 21, 2024
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BusinessDay

Bread prices rise as currency woes and war squeeze bakeries

Bread-bakers-association

The Premium Beadmakers Association of Nigeria (PBAN) blames rising bread prices on a volatile exchange rate and Nigeria’s dependence on imported ingredients.

PBAN President Emmanuel Onuorah pointed out that most baking materials are imported and priced in dollars. A weaker Naira against the dollar significantly increases production costs for bakeries. Onuorah highlighted the exchange rate’s rise under the current administration, further straining bakeries.

Also the ongoing conflict between Ukraine and Russia, major wheat suppliers to Nigeria, has also impacted production. This disruption adds another layer of difficulty for bakeries struggling with rising costs.

Onuorah emphasized the importance of bread in Nigerian diets, both as a readily available food and for its cultural significance. He expressed the challenges faced by bakers due to Nigeria’s limited domestic production and reliance on imports.

Onuorah reminded Nigerians that he previously warned of a 15-20% bread price increase in January 2024 due to the government’s fuel subsidy removal and currency reforms.

Onuorah noted Nigerians’ preference for a specific type of bread – soft, sweet, and shaped in a particular way. This preference makes it difficult to find cheaper alternatives, as these qualities are essential for the product’s marketability.

With 60-65% of bread coming from wheat, and a significant portion sourced from Ukraine and Russia, the conflict creates a supply chain vulnerability that contributes to the price increase.

This rewrite condenses the original text, focusing on the key points of exchange rate volatility, import reliance, and the war in Ukraine impacting the price of bread in Nigeria. It also retains Onuorah’s insights into Nigerians’ bread preferences and the challenges faced by bakeries.