Food Prices Reduce Globally, But Not in Nigeria

Prices of global food commodities dropped for the second consecutive time in July 2021, according to a United Nations report released recently.

The Food and Agriculture Organisation (FAO) price index ended July with 123 points, a 1.2 percent drop from the previous month.

However, Nigeria is still grossly embattled with surging food prices as purchasing power has been on the decline despite the National Bureau of Statistics (NBS) report that inflation has been on the decline in the country.

For instance, the FAO vegetable index declined by 1.4 percent to a five-month low. This ought to be reflective in the prices of vegetable oils, but on the contrary, prices have only gone up in the said period. The report noted that the global decline was due to a “lower biodiesel blending mandate in Argentina”, which pushed the price of soybean lower. Sunflower oil also got cheaper due to prospects of record supplies for the 2021/2022 season.

The FAO Dairy index dropped 2.8 percent month-on-month globally in July, but Nigerians are spending more on dairy products such as evaporated milk, powdered milk, yoghurt etc.

Also, the FAO Cereal price index declined 3 percent month-on-month as cereals became much cheaper globally. Maize became 6 percent cheaper in July as a result of better-than-expected yields in Argentina and improved production prospects in the United States of America. It also stated that the price of rice had crashed to a two-year low globally due to lower demand arising from currency movement and high freight costs.

Food prices have surged extremely this year in Nigeria, with several staples doubling in price in the first half of the year such as garri (100%), beans (110%). Processed foods have also jumped in prices such as spaghetti (50%) and yoghurt (60%). Factors such as insecurity and outright negligence of the agricultural sector have contributed in no small way to Nigeria's food crisis.

Allnews reported recently that the average Nigerian spends 101 percent of their earnings on food, and only people from war-torn Syria spend more than that on feeding.