Food prices remain high despite steep decline in forex

A common cry amongst Nigeria, is the current hike in the prices of food and agricultural commodities. While many traders have blamed the high costs on the rise of the dollar, prices have remained high amidst forex decline. RUTH TENE NATSA, writes on the many factors responsible for these:

A disturbing factor, amidst the fluctuating forex market is the escalation of prices of food commodities which retailers always blame on the increasing dollar rates, while consumers complain and, in several cases, simply accept as the norm.

However, it is important to note that while the recent horrendous rise in the dollar had led to a heavy increase in the cost of food commodities, several factors can actually be blamed and must be addressed to help alleviate the rising cost of food commodities.

It is no longer news that the dollar which had risen to an all-time high of N1,600, with speculators suggesting it would get to as high as two thousand naira to a $1, had to swallow their speculations, as the naira steadily gained and has hovered around one thousand two hundred-one thousand three hundred in the past week.

The instability of the naira was such that major stores and malls, were refusing to paste prices on their shelves, as customers would pick up products/produce and at the pay point/cashier’s desk will find the prices had tripled or been changed.

This instability further informed retailers, hiking prices indiscriminately as, the public outcry by consumers forced producers to defend themselves and subsequently publicly disclose their off-taker rates.

Aside the fluctuating forex market, is the tragedy of the killer herdsmen/unknown gunmen, known to attack farming villages and communities, most particularly in food producing states, such as Benue, Kaduna, Katsina and Zamfara. These is totally not adding the regular re-occurring communal disputes, political and other security challenges known to affect other communities.

It is no longer news that in some communities in Kaduna and Zamfara states respectively, the people are forced to pay huge amounts weekly, to kidnappers or risk being kidnapped and paying huge ransoms to be freed or killed.

The high cost of fuel and ultimately transportation, is also another factor that has influenced rising cost of food commodities across Nigeria, but most particularly in the FCT, which mostly has its food imported from other states.

This reality has totally rejected the idea of price control, as farmers, retailers and transporters argue the justification of government to impose price control, when there is little or no subsidy to support their production.

It is also no longer news that as Nigeria strived to promote locally grown products, the border closure no doubt formed a major challenge as farmers of local produces, such as rice rather than become cheaper and more affordable, hiked prices, further adding to the high cost in food commodities.

Again, just recently, Nigeria witnessed the new electricity tariff hike, and there is no doubting the fact that these will subsequently have an effect on suppliers of frozen foods and even non frozen foods.

The climate effect on agriculture is another effect that Nigeria, cannot deny, as high/low rains continue to affect farmers, flooding and other natural disasters take grueling effects, leading farmers to great losses.

However, the most obvious and generally agreed cause of rising cost of commodities, remains greed. There is no doubting the fact that most retailers, in the rush to make quick gains are more concerned about their profit margin as against the consensual fair price margin.

For many retailers, the choice, between small gains for larger sales will always be rejected as they prefer to make huge profits for lesser sales. This sadly remains the reality of the Nigeria’s commodity market.