Price Of Bread May Increase Soon, Here is Why

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Since the beginning of the coronavirus pandemic, food markets all over the world has continue to deal with unprecedented and simultaneous shocks to supply and demand that impacted the entire supply chain and caused significant shifts in demand patterns and price.

Due to the low production volumes of the Wheat in Nigeria, the price of grown wheat in the country has risen by 33 percent. This may lead to increase in the prices of bread and other pastries as wheat is the major raw material for flour used in baking.

It was gathered from the Wheat Growers Association of Nigeria that the projected price of the product was N180,000 per metric tonne at the beginning of the planting season.

However, due to the COVID-19 containment measures that affected the harvest process and led to the loss of the product by farmers, the price had increased to N240,000 per metric tonne.

The President of the association, Salim Muhammad, who spoke with The PUNCH explained that the spread of the coronavirus started during the harvest period of wheat planted by farmers.

“We set a price of N180,000 per metric tonne but the market demand raised the price to N240,000 per metric tonne, which the off-takers are not willing to accept,” Muhammad explained.

According to him, the inability of farmers to harvest products on time led to losses. He added that farmers were unable to meet market demand for the product.

Muhammad said, “The virus started spreading during our harvest period and it could not allow farmers to have access to their farms due to restriction in movement and lockdown.

“It did not allow the farmers to get the labour they needed because of the social gathering restriction put in place.”

He explained that birds, insects and the weather had destroyed some of the ripe wheat that couldn’t be harvested on time.

“The farmers who were able to harvest successfully did not have access to market because of the lockdown,” Muhammad said.

He said the association had made projections for 34,000 metric tonnes of wheat based on 11,185 farmers approved by the CBN but unfortunately due to the restricted movement, the group could not ascertain the volume of harvested wheat.

He also said from all indications, the hike in price would trickle down to millers, bakers and consumers.

Wheat is important to the diet of many Nigerians as it is a major component of wheat flour, pasta, bread, dough, noodles and spaghetti, among others.

Meanwhile, the Association of Master Bakers and Caterers in Lagos State are also complaining of a hike in the rates of baking materials, including flour, due to the COVID-19 pandemic.

According to the group, a bag of flour that cost N9,000 before COVID-19 crisis, now goes for N13,000. The association explained that the instability of foreign exchange, high cost of diesel and other baking materials, were reasons given by flour millers for the hike in the prices of baking materials.

The hike in price of wheat-based staples also pushed up food inflation rate as seen in the inflation figures for June 2020. In June, the year-on-year food inflation increased by 0.14 per to 15.18 per cent while the monthly component rose by 0.06 per cent to 1.48 per cent as the highest price increases were recorded for bread and cereals, potatoes, yams and other tubers.

Data obtained from the National Bureau of Statistics showed that durum wheat flour and seeds were some of the major agricultural products imported in the first quarter of the year.

The data showed that durum wheat valued at N127.85bn was imported from the United States, Latvia, Canada, Argentina, Russia and Lithuania. This is an indication that the value of wheat imports grew by 22 per cent between January and March 2020 compared with Q1 2019 imports from Argentina, Canada, Russia, United Arab Emirates and US valued at N105.113bn.

Forecast made by the Food and Agricultural Organisation indicated that wheat imports by Nigeria this year could reach 4.8 million tonnes but could be affected by the sharp depreciation in naira and falling foreign exchange reserves.

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