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BREAKING: Prices of Rice, Sugar, Flour, Noodles, Other Foodstuffs Drop

Prices of rice, sugar, flour, noodles, and other food items have decreased, providing relief to consumers.

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prices of rice
Bags of Rice

Prices of rice, sugar, flour, noodles, and other food items have decreased, providing relief to consumers.

This decline is attributed to the recent recovery of the naira against major currencies.

Researchers from Financial Derivatives Company Limited have observed a steady decline in several domestic commodity prices due to the naira’s appreciation against the dollar and other major currencies.

VerseNews reports that the Managing Director Bismarck Rewane shared these insights in an email report sent to investors over the weekend.

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According to Rewane, the naira has recovered to exchange rates of N1,260/$ and N1,125/$ in the official and parallel markets, respectively.

This recovery in the naira’s value has contributed to a noticeable decrease in the prices of various domestic commodities.

As expected, the steady appreciation of the naira has led to a rise in the costs of some food items. This trend aligns with economic predictions and indicates a shift in the market as a result of the strengthening local currency.

Rewane said: “Notably, prices of some commodities like rice (50kg) decreased by 5.26 per cent to N90,000, sugar fell by 5.88 per cent to N80,000/bag, flour experienced a decline of 7.81 per cent to N59,000/bag, and noodles (carton) witnessed a significant decrease of 15.22 per cent to N7,800/carton.”

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He clarified that pricing will probably reflect the appreciation of the naira as more companies start to stock up on inventories.

“In the short term, we anticipate further moderation in commodity prices as the naira sustains recovery due to improved forex supply. Consequently, inflationary pressure is expected to slow in the coming months,” he added.

CBN’s Forex Policies Drive Naira Recovery and Boost Economic Confidence

The Central Bank of Nigeria (CBN)’s recent foreign exchange (FX) market sanitisation measures have set the naira on a path to recovery since it hit an all-time low of N1,915/$ in February at the parallel market.

The increase in foreign exchange inflows, along with the CBN selling dollars to bureaux de change (BDCs), has contributed to the naira’s strengthening.

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The investment in foreign portfolios reached $2.3 billion in the first two months of 2024, while the clearance of the CBN’s $7 billion certified foreign exchange backlog marked a significant milestone.

According to Bismarck Rewane, Managing Director of Financial Derivatives Company Limited, this progress demonstrates CBN governor Olayemi Cardoso’s commitment to addressing the backlog and stabilizing the currency.

By tackling the backlog, the CBN is moving towards its policy goals of currency rate stabilization, reduction of import inflation, and enhanced economic confidence.

He said: “The recent clearance of the FX backlog by the CBN marks a pivotal moment for the nation’s economy, carrying profound implications for several key macroeconomic indicate,”

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Dr. Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), noted that the market’s evolving conditions showcase its ability to self-correct through realistic price discovery as the naira continues to strengthen globally, supported by CBN policies promoting foreign exchange inflows.

“We applaud the CBN management for the reconsideration and reinstatement of the BDC sub-sector as the third leg of the forex market to put hoarding and speculation under check, and we have seen faster results than expected,” Gwadabe said.

However, according to reports gathered by this Online News Platform, the price of a bag of rice is N77,000.

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