- As Naira appreciates against the US dollar, prices of basic food items in major markets across the state fluctuates
- A survey carried out by NAIJ.com at Ikpoba Hill market and Oba market, Benin City, showed an increment in the price of some basic food items and a reduction in the price of others
- The persistent scarcity of funds has led to the increase in the price of foods and consumables in various markets across the country
- While traders lament low patronage, buyers in the market informed that sometimes traders in the state create artificial scarcity of foods and commodity all in an attempt to make huge profits
As the scarcity of funds persist, and the nation’s legal tender, the naira, appreciates against the US dollar, the prices of basic food items continue to fluctuate in some major markets across the country.
A survey carried out by NAIJ.com at Ikpoba Hill and Oba markets in Benin City, the Edo state capital, showed an increment in the price of some basic food items and a reduction in the prices of others.
The news came in not quite long after the National Bureau of Statistics (NBS) informed that the Nigerian economy has exited recession.
Construction work on-going at the Ikpoba Hill market, Benin City. Source: Esther Odili
Although the Central Bank of Nigeria (CBN) recently boosted the foreign exchange market in its move to ensure more supply of the foreign currencies in the inter-bank market, the prices of some foodstuffs kept soaring.
The Naira appreciated to N360.31 per dollar in the parallel market as the CBN injected $195 million into the interbank foreign exchange market.
According to findings by NAIJ.com at Oba market, the prices of some staple foods such as rice, pepper, tomatoes, onion, were beginning to drop in the market while others like fish, beans, maize and crayfish continued to soar.
Prices of perishable item crash as Naira appreciates further at Ikpoba Hill market and Oba market, Benin City. Source: Esther Odili
At the market, prices of food items are coming down following the arrival of different produce into the market, where a bag of rice now sells for N17,000 and below as against previous price of N19,000 and above.
Traders in the market are lamenting over the exchange rate fluctuation, saying it has affected goods and services in the state.
A trader at the market simply identified as Mr. Ehizogie, said the fluctuations in the exchange rate would continue to affect prices of goods and services until the situation is normalised.
The deteriorating state of the road at Oba market, Benin City. Source: Esther Odili
“Last month the exchange rate reached between N360, N380 and N400. And last week, the naira depreciated further against the dollar, but as long as this ugly trend continues, the telling effect will be on the ordinary customer. When people purchase the dollar at exorbitant rate, ordinary customers will be at the receiving end. So, even if traders go back and buy the dollar at lower rate, they will not reduce their prices because it has been the usual style in our country,” he said.
Findings by our correspondent revealed that prices of some goods have drastically reduced but beans, still experiencing high demand, remained costly but with slight drop in price of some.
Idehen, one of the consumers who came to buy foodstuff in the market, told NAIJ.com that the prices of food items would crash further before the year runs out.
He said: “The Nigeria economy is crawling and still in a bad condition despite government’s intervention in reviving it. The prices of goods in the market so far, current economic hardship would end when there is massive food production. When people don’t produce but consume more, there is bound to be food shortage and the economy will become weak."
Prices of foodstuff items fluctuate at Oba market, along Ring Road, Benin City. Source: Esther Odili
A trader identified as Osarobo also informed that there has been reduction in the prices of foodstuffs and an increment in the price of crayfish, beans and dried pepper.
She explained that: “Sales has been very low. Egusi and ogbono has witnessed a slight reduction in its prices but the price of crayfish and dried pepper is still high. A bag of ogbono that cost N90,000 before, now cost N75,000. A bag of egusi (Handpeel) that cost N60,000 before, now cost N45,000. Also, a bag of egusi (Machine) cost N42,000 now. Because these food items are imported into the country, the exchange rate often influenced the price, not leaving out the size of the bag, the quantity (measurement) and the market location.
“The price of the items fluctuates, it is not always stable. A bag of tiny dry pepper can be purchased at N50,000 now while a big nylon of crayfish sells for N38,000 as against its old price of N30,000.”
Prices of stock fish, crayfish and dried fish continue to rise at Oba market, Benin City. Source: Esther Odili
“Food stuffs come from the north and other parts of the country to the state. Therefore the cost of transportation and the bad road in Benin City that leads to major food producing states, contributes to the hike in the prices,” she added.
Ikpoba Hill market is a market known for offering goods at wholesale price on every five market days. In addition, the market boasts of direct farm-to-market food centre, by distributors from far and near with different food items and goods of any kind; brought into the market and sold at affordable prices. Despite this assertion, the traders in the market lament low patronage.
Also, Bashiru a trader who sells yam in the market informed that yams are not really expensive, and the prices can be determined by the size of the yam, the type of yam, cost of purchase as well as the weather condition.
“Yam has become affordable now compare to its price in the previous months. Often times, the size of the yam, the type of yam and the cost of purchase by the trader influence the amount it will be sold in the market.
"A small tuber of yam from the north which sold earlier in the year for N300 presently costs between N400 and N500; although there are other species grown in the east and west, which are a bit cheaper. Five tubers of (big) yam which was sold at N2,500 some months ago, now sells for N4,500. Swings in the season of planting and harvest, are some of the reasons for the price increase.”
Yams have become cheaper as observed by NAIJ.com at Ikpoba Hill market, Benin City. Source: Esther Odili
At the market, a basket of fresh tomatoes now sells at N12,000 as against N18,000 at which it sold till first quarter of the year. The small portion for family cooking which used to sell for N250, now sells for N150-N100 in the market depending on customers’ bargaining power.
Explaining the increase in food prices, Uhunoma, a trader in the market, said the insurgents' security threat in the north is affecting food prices as majority of farmers and foodstuff dealers in the region have left their businesses to seek safety which has led to the increment of the ones brought to the market.
“The current situation in the north is seriously bad that is why we do not get enough supply from there again. Because of unexpected attack from the Islamic sect, farmers left their farms and traders are therefore out of business since there is little or nothing to sell and transport. Those who are still managing to do business despite the insecurity issues know that they are risking their lives.
“The only alternative to this problem is for the government to intervene because the masses or customers will continue to be at the receiving end due to lack of stability in exchange rate,” Mr. Uhunoma stated.
Food Items on display at Oba Market, along Ring Road, Benin City. Source: Esther Odili
Further checks by NAIJ.com revealed that there was a reduction in the price of perishable items like tomatoes, pepper and onion. A basket of fresh Hausa tomatoes goes for N12,000 as against its old price of N15,000, while a big bag of pepper goes for N14,000 as against its old price of N17,000.
A bag of new onions cost N13,000 while the bag of old onion costs N22,000. Traders revealed that the reduction was due to the availability of the goods by many sellers.
A trader who sells perishable items in the market who gave her name as Mrs. Osaze, informed that the perishable items have become affordable due to the availability of the goods in recent weeks now. She added that the bad roads that lead to major highways in Nigeria influence the price of some goods.
Prices of essential goods still fluctuate in various markets across the country. Source: Esther Odili
She said: “The price of tomatoes, pepper and onion has dropped and they are influenced by the size of the bags, the basket and the type as well as the market. A basket of tomato can be purchased from N8,000, N10,000 and N12,000: depending on the size of the basket and the type of tomatoes. While that of pepper, the price is influenced by the size of the bag. A small bag of pepper can be purchased from N2,500 upwards.
"Old onion is very scarce and often not available; this therefore makes it expensive in some markets. But the bag of new onions goes from N12,000 upwards while that of old ones goes from N22,000 upwards.
Fresh tomatoes have become affordable at Oba and Ikpoba Hill markets in Benin City, while the price of canned tomatoes remains stable. Source: Esther Odili
“Perishable goods have become affordable due to its availability in recent weeks. The reason why the goods here are expensive is because of the cost of transportation and the cost of purchase. The some of the roads in Benin City are bad and bringing goods from the northern part of the country to this market is very expensive, hence leads to the increment of the items,” she added.
A rice dealer in Oba market, Ndidi, explained thus: “Rice is mainly imported into Nigeria as the quantity of the locally grown species cannot take care of the population demanding for the product. Although the government placed a ban on the importation of items but the imported rice are more affordable than the locally produced ones.
“We have different types of rice and beans and they have become more affordable now. We have the refined Nigerian rice, the brown rice and the foreign rice. A bag can be purchased from N15,500, N16,000, N17,000 and so on. The brand also determines the cost price of the rice. For beans, a bag of Brown beans cost N36,000, A bag of white beans (Hausa) cost N32,000, a bag of Uloka beans cost N38,000, a bag of Sokoto beans cost N35,000 and a bag of Kano beans cost N30,000.
Prices of rice and garri crash while those of beans soar at Oba market, Benin City. Source: Esther Odili.
“There has been a reduction in the price of garri. A bag of white garri (small) cost N8,000 while the bag of yellow garri (small) cost N10,000. The foreign exchange rate determines to a large extent how affordable these goods can be in various markets across the country,” Ndidi explained.
The effect of the fluctuation in foreign exchange rates on prices of goods and Services has been a negative one. There is high rate of inflation on both locally produced goods even imported ones.
Mr. Ifeanyi, a trader who sells groundnut, also said the effect of exchange rate has caused prices of goods to increase by almost 50 per cent.
“The foreign exchange has affected the price of virtually all goods in the market. Because, we import almost all the goods in the market, and with the dollar rate, prices of the imported items rise. A bag of old groundnut cost N50,000 while the bag of new groundnut cost N43,000. The cost of purchase is not the only problem, but patronage.
Groundnut sellers lament low patronage and sales drop at Oba market, Benin City. Source: Esther Odili
“Street hawkers used to be our major customers, but since they have been chased off the street by the government, patronage has been very low. We are really facing hardship here in this market, because when you purchase goods, you are supposed to sell it and return to purchase another one, but the reverse is the case, as the goods we purchase often gets rotten when it is not sold in months with no profit recorded,” he lamented.
Meanwhile, the scarcity of foreign exchange (forex) takes heavy toll as the prices of some imported goods in the country were inflated in recent times.
Mama Patience, a palm oil seller, said that the prices of palm oil and groundnut oil had to increase because the commodities being supplied by the Nigerian producers are not enough.
“The groundnut oil that is purchased from the village is more affordable to the ones purchased from the manufacturing firm. A 25-litre of groundnut oil cost about N12,700 upwards while that of Palm oil cost N11,500; some branded ones are expensive while some are affordable, depending on the size of the gallon.
Findings by NAIJ.com at Oba market and Ikpoba Hill market, Benin City, showed a reduction in the price of both items. Source: Esther Odili
“Now, some traders’ go as far as Cotonou in Benin Republic to buy palm oil and groundnut oil. And since the sole aim of any business man is to make profit, the cost of purchase and transportation fare will be added to the amount it will be sold.”
Due to the unbalance of import to exported goods, the demand for dollar is always on the rise, which generally causes a continued depreciation of the naira. Depreciation is steadfast at the parallel market and the gap between naira’s value at the parallel and official market widens easily due to this imbalance. To checkmate this, the CBN has devalued the currency a number of times, only for the same thing to happen years later.
The intervention by the CBN will guarantee stability in the market and ensure availability to individuals and business concern with genuine demand for Forex transactions.
Moreover, the demand for goods is ever present and needs to be met. If there is no infrastructure to improve productivity of local produce, the need to export these products will always be on the rise. This will cause the naira to continue depreciating against the dollar.
Source: Naij.com
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