Steady Prices of Food in Nigeria at the End of Q2 2014

The prices of food in Nigeria were stable in Q2 2014 even as the Food and Agriculture and Organisation (FAO) Food Price Index decreased for three consecutive months till June.

The lower prices of wheat, maize and palm oil which reflect sufficient supplies and enhanced global production prospects for these products were the major influence for the decline in the FAO food price index.

The Federal Ministry of Agriculture and Rural Development revealed that there was no major change in the prices of basic dietary items in Nigeria as the prices of rice, garri, cowpea, maize and millet remained steady at the end of Q2 2014.

According to the latest FAO Crop Prospect and Food Situation report, the stance for cereals production improved further with upward revisions to coarse grains and wheat supply forecast for 2014/15.

With Nigeria releasing grains from its strategic reserves last week to keep food prices stable as the Ramadan fast for Muslims kicked off, FAO's latest forecast for world cereal production in 2014 now stands at 2498 million tonnes (including rice in milled terms), 18 million tonnes up from the previous figure in June, although still 1% (23 million tonnes) below last year's record output. The recent upward revision reflects improved production prospects for coarse grains and wheat crops, particularly in the United States, the EU and India.

The report also explained that many people in drought stricken and conflict areas still require external assistance for food despite increased supplies and lower average prices.

At an average of 206.0 points in June, the Food Price Index which is based on the prices of basket of internationally-traded food items, decreased by 3.8 points (1.8%) from May and nearly 6 points (2.8%) below the June 2013 level.

The index which had increased to a ten-month high of 213 points in March 2014 fell in April, May and June mostly as a result of lower prices of cereal, vegetable oil and dairy price. Sugar prices also declined in June from May, but remained up from last year, while in contrast, meat prices on average increased from May.

In June, the FAO Cereal Price Index averaged 196.2 points decreasing by 10.9 points (5.2%) from a revised value in May and 36.1 points (15.6%) below last year. The lowered prices of wheat and maize, both of which fell by close to 7% in the middle of further improved crop prospects and declining concerns over possible disturbances of shipments from Ukraine, were the main causes of the decrease.

Vegetable oils averaged 188.9 points in June, down 6.4 points (3.3%) from May, in part reflecting a 9-month low in the price of palm oil - the most widely traded edible oil.

Meanwhile dairy prices averaged 236.5 points in June, down 2.5 points (1.0%) over May, a less substantial decline than the previous three months.

Meat prices however edged up, averaging 194.2 points in June on the FAO Index and 1.4 points (0.7 %) more than in May, a reflection of constrained world supplies.
According to FAO, 33 global countries as well as 26 in Africa are in need of external assistance due to combination of conflict, crop failures and high domestic food prices.