Our Urban Retail Price Tracker—the PURP index— recorded an increase of 0.77% MoM to 105.7 pts in the month of May (vs 0.69% MoM in April). Our survey revealed a mixed play of prices. While the brewery and commodities sector saw increased prices due to high transport cost and the ongoing Ramadan festival, prices in the consumer sector were largely lower MoM.
Volumes were generally higher across board.
The brewery sector saw price increases for the third consecutive month with prices up 0.86% MoM. Notably, Trophy (2.22%) and Gulder (1.96%) both witnessed a faster pace of price increase MoM. Feedback from retailers linked the increase in prices to higher transport cost in the month. On volumes, feedback from retailers revealed a decline in volumes during the month.
The commodities basket increased 0.84% MoM in May. Prices were higher across board save for palm oil -0.69%. Over the period, both vegetable oil and rice witnessed price increases of 0.43% MoM and 2.25% MoM respectively. For palm oil, feedback from retailers showed that stability in prices has been driven by increased supply of the commodity. Elsewhere, feedback from retailers associated the general increase in the price of both vegetable oil and rice to higher transport cost in the month of May as well as the Ramadan festival which made it possible for retailers to raise prices.
To determine how retail prices have moved on average, we fashioned out a Pentad Urban Retail Price Index (PURP) which adopts April 1st to April 8th as a base period. The PURP index accords 30% weightings apiece to consumer and commodities prices, 20% weighting to the brewery basket with a further 20% distributed evenly between cement and cooking gas prices.
Across the sectors, price evolution is monitored on a weekly basis while we adopt 0.6%, 0.0%, and -0.6% as indicators for volume expansion from the prior week, no change in volumes, and week on week output contraction (respectively) in a manner slightly akin to CBN’s PMI methodology.
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SOURCE: Urban Retail Price Tracker form ARM Securities Nigeria