Prices of retail items in urban centres in Nigeria recorded an upward movement to the tune of 1.1 per cent month-on-month (MoM), from 0.69 per cent in April to 0.77 per cent in May. The increase in commodity prices, among others, run contrary to the success so far achieved in Nigeriaâ€™s headline inflation, otherwise known as the Consumer Price Index (CPI), which has for the 15th consecutive month recorded a decline.
As at April, headline inflation in Nigeria stood at 12.48 per cent, according to the National Bureau of Statistics (NBS). But going by the outcome of its research in May, ARM Securities Limited revealed that prices of goods in Nigeria, especially in the urban centres, have continued to soar.
â€œOur Urban Retail Price Trackerâ€”the PURP indexâ€” recorded an increase of 0.77% MoM to 105.7 pts in the month of May (vs 0.69% MoM in April),â€ ARM Securities said.
The report added, â€œOur survey revealed a mixed play of prices. While the brewery and commodities sector saw increased prices due to high transport cost and the on-going Ramadan festival, prices in the consumer sector were largely lower MoM. Volumes were generally higher across board.â€
The report, which captured five key sectors of the economy, namely, Brewery, Commodities basket, Consumer, Cement, and Oil and Gas, hinted that it was a mixed play of prices.
According to analysts at ARM Securities Limited, the brewery sector saw price increases for the third consecutive month, with prices up 0.86 per cent month-on-month.
â€œNotably, Trophy (2.22 per cent) and Gulder (1.96 per cent) both witnessed a faster pace of price increase MoM.â€
Feedback from retailers, according to the report, linked the increase in prices to higher transport cost in the month. â€œOn volumes, feedback from retailers revealed a decline in volumes during the month,â€ analysts added.
Meanwhile, the consumer sector, according to ARM Securities, saw a mixed play of prices with an overall decline in prices by 1.56 per cent. Among the products that witnessed price increase were Honeywell (12.82 per cent) and Dangote pasta (13.89 per cent), while Lipton (-15.22 per cent) and Milo (-7.79 per cent) saw the largest decline in prices. â€œOverall, most of the decline was as a result of price discounts in the on-going Ramadan festival,â€ the report revealed.
ARM Securities also disclosed that commodities basket increased by 0.84 per cent month-on-month in the review period, as prices were higher across board, save for palm oil -0.69 per cent. Over the period, both vegetable oil and rice witnessed price increases of 0.43 per cent and 2.25 per cent month-on-month, respectively. â€œFor palm oil, feedback from retailers showed that stability in prices has been driven by increased supply of the commodity,â€ the analysts said.
â€œElsewhere, feedback from retailers associated the general increase in 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,â€ the research added.
The price pressure bit harder in the cement sector, as it witnessed an increase in prices by 2.21 per cent month-on-month. â€œOn volumes, retailers noted higher sales volume compared to the previous month,â€ the report noted.
Likewise, prices in the oil and gas sector expanded 1.72 per cent month-on-month with prices of lubricants increasing by 2.47 per cent, accounting for the increase. â€œElsewhere, the price of cooking gas was relatively flat over the month,â€ the report revealed.
Similarly, selected food price watch data for April 2018 by NBS, reflected that the average price of one dozen of Agric eggs medium size increased year-on-year by 6.45 per cent and month-on-month by 4.70 per cent to N552.09 in April 2018, from N527.32 in March 2018, while the average price of piece of Agric eggs medium size (price of one) decreased year-on-year by -8.59 per cent and increased month-on-month by 2.52 per cent to N42.25 in April 2018 from N41.21 in March 2018.
The average price of one kilogramme of tomato increased year-on-year by 1.32 per cent and month-on-month by 8.38 per cent to N289.49 in April 2018, from N267.09 in March 2018.
The average price of one kilogramme of rice (imported high quality sold loose) decreased year-on-year by -4.92 per cent and increased month-on-month by 1.66 per cent to N369.35 in April 2018, from N363.33 in March 2018. Also, the average price of one kilogramme of yam tuber increased year-on-year by 11.71 per cent and month-on-month by 9.86 per cent to N279.61 in April 2018 to N254.51 in March 2018.
Meanwhile, explaining the research methodology adopted to achieve the result, ARM Research said, â€œTo 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 per cent weightings apiece to consumer and commodities prices, 20 per cent weighting to the brewery basket with a further 20 per cent distributed evenly between cement and cooking gas prices.
â€œAcross the sectors, price evolution is monitored on a weekly basis while we adopt 0.6 per cent, 0.0 per cent, and -0.6 per cent as indicators for volume expansion from prior week, no change in volumes, and week-on-week output contraction (respectively) in a manner slightly akin to CBNâ€™s PMI methodology.â€