Goods on display
The FSDH Securities Limited has predicted that inflation rate for May expected to be announced on next week will drop marginally by 10 basis points to 12.8 per cent, compared with the year-on-year figure of 12.9 per cent recorded in April.
The research and investment firm stated this in a report made available to THISDAY yesterday. The National Bureau of Statistics (NBS) is expected to release the inflation figure for the month of May next Tuesday.
April inflation rate was 12.9 per cent, an increase from 12.1 per cent recorded in March 2012.
FSDH had stated earlier that the increase in the year-on-year (y-o-y) inflation rate to 12.9 per cent was principally on account of base effects in April 2011 when prices dropped.
The monthly Composite Consumer Price Index (CCPI) for all items for the month of April stood at 132.8 points, a marginal increase of 0.13 per cent between March 2012 and April 2012.
On a month-on-month basis, prices remained fairly stable between March 2012 and April 2012.
The value of the naira depreciated against the dollar in May by 0.03 per cent compared with the appreciation of 0.20 per cent in April.
Consequently, the firm argued that the depreciation in the value of the naira in May 2012 added marginal increase to the prices of imported consumer goods in Nigeria between the two months
Continuing, the report said: “The Food and Agriculture Organisation (FAO), notes that food prices fell sharply in May 2012. The FAO Food Price Index (FFPI), which measures the monthly change in the international prices of a basket of food commodities, released on June 07, 2012, shows that the FFPI averaged 204 points in May 2012, down 4 per cent from April and the lowest since September 2010.
“At this level, the FFPI would be about 14 per cent below its peak in February 2011. According to the FAO, international prices of most commodities, composing the FFPI weakened in recent weeks on generally favourable supply prospects amid growing economic uncertainties and a strengthening US dollar. “However, the report notes that international price of rice rose slightly, mainly on increased purchases ahead of the Ramadan period. Meanwhile, the price of rice that FSDH Research monitored in different parts of Nigeria remained stable between the months of April and May, 2012.”
It also noted that the recent security challenge in the northern part of the country continued to pose significant threat to the agricultural produce cultivated in that part of the country.
“This has resulted in an increase in the price of food items such as beans, tubers and vegetables (tomatoes and pepper),” it added.