Jubilation as Price of Rice, Sugar, Flour Others Finally Falls in Markets, Experts React

Jubilation as Price of Rice, Sugar, Flour Others Finally Falls in Markets, Experts React

Jubilation as Price of Rice, Sugar, Flour Others Finally Falls in Markets, Experts React

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Analysts at Financial Derivatives have hinted at new prices of commodities sold in marketsThis is on the back of the recovery of the naira to N1,260 to the dollar across all FX marketsAnalysts believe that there will be a further moderation in commodity prices as the naira sustains recovery

Henzodaily.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Financial Derivatives Company Limited researchers have noted that several domestic commodity prices are steadily declining due to the naira’s recovery in relation to the dollar and other major currencies.

The costs of some food goods have started to rise in tandem with the steady naira appreciation.
Photo Credit: Luis Alvarez
Source: Getty Images

Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, stated in an email report sent to investors over the weekend that the naira had recovered to N1,260/$ and N1,125/$ at both the official and parallel markets.

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Cost of food declined

The costs of some food goods have started to rise with the steady naira appreciation, as was generally anticipated.

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.”

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

He added:

“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.”

Naira continues to gain

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Since the naira touched an all-time low of N1,915/$ in February at the parallel market, the Central Bank of Nigeria (CBN)’s recent foreign exchange (FX) market sanitisation policy has put the currency on a steady route to recovery.

The increase in foreign exchange inflows and the CBN’s selling of dollars to bureaux de change (BDCs) contributed to the exchange rate recovery. The amount invested in foreign portfolios has increased to $2.3 billion in the first two months of 2024.

According to Rewane, clearing the apex bank’s $7 billion in certified foreign exchange backlog was a significant accomplishment.

With this accomplishment, CBN Governor Olayemi Cardoso keeps his pledge to deal with the backlog.

By reducing the backlog, CBN is advancing its continued policy objectives to stabilise the currency rate, reduce import inflation, and increase economic confidence.

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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,”

Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), observed that the market’s continuous evolution demonstrated its readiness to correct itself with a realistic price discovery as the naira keeps appreciating on a global scale thanks to the CBN’s policies encouraging more foreign exchange inflows.

He said:

“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.

Rice price hits N77,000 per bag

Henzodaily.ng reported earlier that Nigerians in their millions are now adopting severe cost-cutting measures to cope with the hardship caused by the astronomical rise in the country’s goods and services price.

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Nigerians in their millions are now adopting severe cost-cutting measures to cope with the hardship caused by the astronomical rise in the prices of goods and services in the country.

The December headline inflation increased by 0.72% compared to November 2023.

Source: Henzodaily.ng

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