• Saturday, July 20, 2024
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Food prices drop at Christmas as weak consumer wallet reduces spending

Food prices

The prices of key staples in Nigeria from rice to tomatoes, mostly consumed at Christmas, have dropped owing to weak consumer purchasing power and traders’ speculation of an upsurge in prices.

The prices of a bag of rice and tomatoes have declined averagely month-on-month by 10 percent, and consumer analysts attribute it to a weak consumer wallet that has reduced spending and the re-opening of the land borders.

Chinyere Chinedu, a rice trader at Oyinbo Market, explains that many traders believed that a bag of rice will be sold for as high as N35,000 during the Christmas season but were left disappointed as things did not go as they anticipated.

“During the #EndSARS protest, lots of foreign rice was brought into the country through the land borders and traders stored them in warehouses to take advantage of the festive season, but with the low demand and re-opening of the borders they were forced to flood the market with it,” she says.

“I know of someone who stored 1,000 bags and was waiting for Christmas to sell and make profit, but now he is pleading that I buy from him at N20,000 per bag,” she states.

A few days ago, the Nigerian government re-opens its border with its West African neighbours after about 13 months of shutting it.

“The re-opening of the borders have triggered market response for fear that rice and other local staples will flood the market,” notes a consumer analyst who does not want his name mentioned.

BusinessDay survey at Mile 12, Oyinbo and Daleko markets in Lagos shows that a 50Kg bag of local parboiled rice now sells for an average of N22,000 as against N28,000 it sold in November, indicating a 21-percent drop in price.

Also, a 50Kg bag of foreign parboiled rice, which was sold for an average of N32,000 a month ago, now goes for N26,000 at Lagos markets. This shows an 18.8 percent decline month-on-month.

Nigeria’s command-style economic management, bleak oil future, and pandemic that have continued to ravage the world have shrunk the value of consumers’ purchasing income, thus making basic household needs unaffordable.

Similarly, the pandemic and FX volatility have taken a heavy toll on Nigeria’s 41.5 million Micro, Small and Medium Enterprises (MSMEs), forcing many to shut down operations, while others resulted in slashing employees’ salaries and cancelling year-end bonuses.

“There are no buyers and it does not even look like Christmas celebration is around the corner,” Yusuf Muhammed, a tomato trader in Mile 12 Market, states.

“By this time last year, I have already sold all the 10 trucks of tomato load I brought from Kano to Mile 12, but now I cannot even sell the two I brought in since Monday,” Muhammed notes.

He attributes the low patronage to Nigerians low income and the fear of a second lockdown.

“People are complaining that there is no money for them to celebrate Christmas,” he says.

Gbenga Olayele, an analyst with a research firm in Ikeja, states that his organisation had since November told the employees of year-end cancellation of bonuses.

“I normally use my year-end bonus for the Christmas celebration but now I cannot afford to celebrate the season without that extra income,” Olayele says.

According to a market survey, the price of a 25-litre gallon of vegetable oil has been stable at N17,500 in Lagos. On the other hand, a 25-litre gallon of palm oil also sells for N17,500.

Also, a big basket of tomatoes that was sold for N15,000 in November is now being sold for N13,000 in Lagos, representing a 13-percentage point decline in price.

A small basket of tomatoes sold for N8,500 in Lagos markets in November now goes for N7,500, indicating a 12-percent price increase.

More so, a 100kg bag of onions now sells for N35,000 in Lagos markets as against N86,000 sold in November, indicating a 59-percent drop in price.

Similarly, a 10kg carton of foreign frozen chicken – Orobo – now sells for N13,500 in Lagos as against N17,000 sold a month ago, while a carton of local frozen chicken now sells for N12,000 as against N12,500 sold in November. This indicates a 21 and 4 percentage drop in price, respectively.

Furthermore, a 10kg carton of frozen turkey now sells for N18,500 as against N19,000 sold a month ago, showing an 8 percent drop in price.

A 4kg Cockerel life-bird sells for N4,800 in Lagos and 7kg sells for N6,000, while old layers sell for N2,200.

“With the continuous surge in the Covid-19 cases and possible second lockdown, I have decided to prioritise my spending,” Muyiwa Ayoola, a teacher with a private school in Lagos, states.

“My family suffered greatly during the initial lockdown and we do not want a repeat if there is a second lockdown. So, we have prioritised saving our income instead of spending it on the Christmas celebration,”Ayoola states.