World food prices drop by 3.7% in June as Nigeria’s food prices soar

World food prices dropped by 3.7 percent in July from the preceding month, even as Nigeria’s food inflation rose for the fifth consecutive month in June.

The United Nations food agency said on Thursday that the drop in world food prices was the sharpest monthly decline since last December.

Reuters reports that the Food and Agriculture Organization’s (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 168.8 points in July, against an upwardly revised 175.3 in June.

“The decline in July was driven by weaker export quotations for wheat, maize and rice,” FAO said.

“International wheat prices were generally weaker during the first half of the month, but concerns over production prospects in the EU and the Russian Federation started to push export values higher towards the end of the month,” it added.

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The National Bureau of Statistics (NBS) in its June inflation report had said Nigeria’s food inflation dropped to 12.98 percent year-on-year in June from 13.45 percent recorded in May.

However, the index has been rising steadily on a month-on-month basis since February 2018, rising to 1.57 percent in the review month from 1.30 percent recorded in May.

Analysts at Cordros Capital Limited said in spite of the consistent drop in the headline inflation since February 2017, they “expect potential uptick in inflation rate over H2-18, coming primarily from higher food prices amid pressured supply chain.”

They attributed the pressure to unresolved security challenge, particularly the farmers-herders’ clashes, in the nation’s agriculture sector.

 

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