Prices of Selected Food Stuff Decreased in October – NBS

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The NBS, in its “Selected Food Price watch data for October 2018” released on Friday in Abuja, noted that one kilogramme (1kg) of yam tuber was sold for N252.21 in October 2018 from N280.28 in September 2018.

The National Bureau of Statistics says the average price of 1 dozen of Agric eggs medium size increased year-on-year by 2.1% and month-on-month by 2.2% to N482.9 in October 2018 from N472.73 in September 2018 while the average price of piece of Agric eggs medium size(price of one) decreased year-on-year by -0.8% and increased month-on-month by 1.4% to N41.73 in October 2018 from N41.17 in September 2018.

The bureau said that the average price of 1kg of tomato increased year-on-year by 5.2% and decreased month-on-month by -6.6% to N306.59 in October 2018 from N328.26 in September 2018.

The report stated that the average price of 1kg of rice (imported high quality sold loose) increased year-on-year by 1.1% and month-on-month by 0.5% to N373.04 in October 2018 from N371.32 in September 2018.

Similarly, the average price of 1kg of yam tuber increased year-on-year by 12.8% and decreased month-on-month by -10.0% to N252.21 in October 2018 from N280.28 in September 2018.

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The Bureau released Nigeria’s inflation report for the month of October 2018 a few days ago, surprising positively as the headline inflation rate slowed to 11.26% y/y, contrary to consensus expectation of a sustained rise. The Oct-18 number was 2bps lower than the rate recorded in Sept-18 (11.28% y/y). On a month-on-month (m/m) basis, the headline CPI increased by 0.74% in Oct-18, 10bps lower than the rate recorded in Sept-18.

The surprised moderation in the headline rate was driven by the Food Inflation sub-index which eased to 13.28% y/y from 13.31% y/y recorded in Sept-18, outweighing the marginal rise in Core Inflation (up by 1bps to 9.9%y/y). Notably, the slowdown in the food inflation sub-index can be attributed to increased supply of agricultural produce in the run-up to the month in view, especially as we move deeper into the harvest season and cases of farmland flooding have waned.

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Meanwhile, the mild uptick in the y/y core inflation sub-index amid renewed pressure on m/m rates (up 20bps to 0.83% in Oct-18) can be attributed to a faster rise in the prices of fuel and lubricants, vehicle spare parts, domestic & household services, carpets & other floor coverings, dental services, hospital services, repair of household appliances and medical services, during the review period.

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Looking ahead, we expect the food inflation sub-index to rise marginally as the anticipated increase in the supply of food product is expected to be offset by increased demand. On the supply side, the declining incidence of farmer-herder crisis and farmland flooding is positive for supply, especially as we approach the peak harvest season. However, demand is expected to increase as we approach the festive period. Thus, we expect m/m food inflation to rise slightly by 0.84% in Nov-18.

Elsewhere, campaign-related spending recorded during Nov-18 may pressure the core inflation sub-index higher to 0.85% in Nov-18. On a balance of these factors, we expect headline inflation to inch higher, rising to 11.32% in Nov -18.

The contraction in m/m food inflation can be attributed to the harvest season which has eased pressure on domestic food prices. In comparison, imported food inflation was flat at 1.2% m/m. The trend in food prices is a significant positive given the previous acceleration in food prices as a result of conflict-driven disruption to the food supply. Less positive is the rise in Core Inflation on both m/m (0.6% to 0.8%) and y/y (9.8% to 9.9%) terms.

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