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  • Business - Economy
  • Updated: November 17, 2021

Food Prices Soar As Inflation Hits 20.75% In October

Food Prices Soar As Inflation Hits 20.75% In October

The eagerly awaited inflation report as reflected by the Consumer Price Index was yesterday, released by The National Bureau of Statistics (NBS). The report said that the annual food inflation rate rose marginally despite the monetary and fiscal authorities concerted efforts to drive inflation figures downward, to 20.75% in October from 20.71%  in September, owing to further increases in the prices of basic food items.

The National Bureau of Statistics, NBS, disclosed this in its Consumer Price Index, CPI which measures the average change over time of goods and services consumed by people for day-to-day living, and Inflation Report for October 2021, saying:

“Increases were recorded in all Classifications of Individual Consumption according to Purpose (COICOP) divisions that yielded the Headline index.”

“On a month-on-month basis, the Headline index increased by 0.98%  in October 2021, this is 0.17% rate lower than the rate recorded in September 2021 (1.15%).”

“The percentage change in the average composite CPI for the twelve months period ending October 2021 over the average of the CPI for the previous twelve months’ period was 16.96%, showing 0.13% point from 16.83% recorded in September 2021.”

The NBS said further that “The composite food index rose by 18.34% in October 2021 compared to 17.38% in October 2020."

“This rise in the food index was caused by increases in prices of Food product, Coffee, tea and cocoa, Milk, cheese and eggs, Bread and cereals, Vegetables and Potatoes, yam and other tuber.

“On month-on-month basis, the food sub-index increased by 0.91 percent in October 2021, down by 0.35 percent points from 1.26 percent recorded in September 2021.”

“The average annual rate of change of the Food sub-index for the twelve-month period ending October 2021 over the previous twelve-month average was 20.75 percent, 0.04 percent points from the average annual rate of change recorded in September 2021 (20.71) percent”.

However, when analyzing the core inflation value which exclude the prices of volatile agricultural produce, the NBS said that “In October 2021, all items inflation on year-on-year basis was highest in Bauchi (19.63%), Gombe (19.33%) and Jigawa (19.07%), while Kwara (11.82%), Edo (13.31%) and Rivers (13.66%) recorded the slowest rise in headline year-on-year inflation.”

“On month-on-month basis however, October 2021, recorded the highest increases in Cross River (2.14%), Benue/Kebbi (2.02%) and Yobe (1.71%), While the slowest rise in inflation for all items were Adamawa (0.18%), Kano and Kogi recording price deflation or negative inflation (general decrease in the prices of goods and services or a negative inflation rate).”

 

Analysts’ comment

Meanwhile, a business analyst at Researchitlive have projected further decline in the Headline inflation rate to 15.65 per cent for this month.

He said: “While the short term monetary measures to address the FX racketeering by the BDCs; the fluctuating price pressures caused by shortages expedient in the agricultural produce and its value chain, may challenge policy measures to drive down food inflation" 

He believed that with aggressive implementation measures of credit schemes for SMEs, farmers and direct supply of increase flow of FX to SMEs from the CBN should help achieve a drop this month.”

He said further “We expect the government to come up with a much tighter monetary policy at the forthcoming Monetary Policy Committee (MPC) meeting”

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