Data from the National Bureau of Statistics (NBS) has shown that prices of selected food items increased in November. 

According to the NBS Selected Food Prices Watch Report for November 2022, released in Abuja on Monday, the average price of 1kg rice (local) increased on a year-on-year basis by 18.95 percent from N421.02 in November 2021 to N500.80 in November 2022.

While on a month-on-month basis, the average price of 1kg rice (local) increased by 2.73 percent from N487.47 recorded in October 2022.

Similarly, the report added that the average price of 1kg of tomato on a year-on-year basis rose by 30.18 percent from N350.15 in November 2021 to N455.13 in November 2022. 

While on a month-on-month basis, 1 kg of tomato increased by 0.15 percent from N454.46 recorded in October 2022.

Also, the report showed that the average price of 1kg brown beans (sold loose) rose by 18.03 percent on a year-on-year basis from N490.19 recorded in November 2021 to N578.55 in November 2022.

While on a month-on-month basis, the price rose by 2.45 percent from N564.69 recorded in October 2022

Investors King understands that the increase in the price of the selected foods is a result of inflation which has astronomically increased the price of goods in the market.

Similarly, several Nigerians have been affected by low purchasing power leading to low Christmas celebrations in many homes.

It could be observed that market patronage during this period was not at its peak as expected. 

In Abuja for instance, a number of malls and shop owners around the popular Wuse Areas had lamented low patronage, noting that customers are being shy away from goods because of the increased prices. 

However, for many Nigerians, 2022 has been the most challenging year, with 21.47 percent year-on-year inflation, increased insecurity, a 33.3 percent unemployment rate, a high poverty rate, slow Gross Domestic Product, (GDP) growth rate, among other economic miseries. 

The ongoing war between Russia and Ukraine has plunged durum wheat importation by N144.59 billion in the first nine months of 2022, the data from the National Bureau of Statistics (NBS) has shown.

In the period under review, Nigeria imported durum wheat worth N753.59 billion, down from N898.19 billion reported in the corresponding period of 2021.

Durum wheat is a variety of spring wheat that’s typically ground into semolina and used to make pasta.

Since Russia invaded Ukraine in February, the price of durum wheat rose by 50% while its importation has declined by 16%.

Explaining the price differential, Tola Ogunnubi, the National Public Relations Officer, National Wheat Farmers, Processors and Marketers Association of Nigeria, said “Before the war, it was selling for N27,000 to N28,000 for 100kg, it is N41,000 to N42,000 now.”

According to NBS, durum wheat is Nigeria’s major agricultural import. However, the ongoing war in Ukraine forced importers to start importing from the U.S. and other countries.

The report said, “The major agriculture goods imported in Q1, 2022 included Durum wheat (not in seeds) were from the United States with N71.56bn and Argentina with N59.04bn.

“The major agriculture goods imported in Q2, 2022 included ‘Durum wheat (not in seeds)’ from the United States of America with N70.67bn and Lithuania with N60.87bn. The major agriculture goods imported in Q3, 2022 included ‘Durum wheat (not in seeds)’ from the United States of America with N78.29bn and Poland with N45.62bn.”

Wheat is used mainly as flour in the production of bread, noodles, pasta and other major food items. Therefore, the decline in wheat importation is responsible for the jump in prices of bread,  pasta and other food items.

Ogunnubi said, “Wheat importation is decreasing but it doesn’t mean that we have achieved wheat sufficiency as such. We have wheat still retaining the third position in terms of commodities that engulf the highest FX. It is after refined petrol products and gas.

“Wheat is still the third highest and we are looking at a situation where we have wheat sufficiency just as we’ve had in rice. We are looking forward to the government encouraging wheat farming, and production. We are imploring the government to come into the entire value chain of wheat production. From planting processing, distribution, everything across the full value chain.”

“Wheat is fast becoming a staple food. If people are not eating maize, they are eating bread, flour, spaghetti, which are some of the side products from wheat. So why are not sufficient.

“The crisis in Russia and Ukraine is affecting importation but that does not mean there are no other markets for importation. The durum wheat that we tend to process in Nigeria can be sourced from Mexico. It is not as if people are not looking in that direction, but the CBN is not giving foreign exchange. The CBN is not giving FX for wheat importation.”

Nigeria Liquefied and Natural Gas (NLNG) declared a force majeure to its partners due to widespread flooding that has disrupted supply.

This declaration could worsen Nigeria’s revenue and foreign exchange scarcity which is already at an abysmal situation.

Force majeure is a clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties happens. 

Such events or circumstances could be war, strike, riot, crime, epidemic or sudden legal changes which could prevent one or both parties from fulfilling their obligations under the contract.

Investors King had earlier reported that the production capacity of the Nigerian Liquified Natural Gas Limited (NLNG) has dropped by 40 percent. The drop was a result of overwhelming theft and the vandalism of oil and gas pipelines. 

No doubt, the subsequent cease of operation will further worsen the gas situation in Europe. Nigeria is a major supplier to some European countries, particularly Portugal. 

It will be recalled that Portugal Energy Minister, Duarte Cordeiro stated that his country could face supply problems this winter if Nigeria did not deliver all its supplies.

Europe has been in the middle of gas shortage since the European Union put an embargo on the importation of Russian gas due to its invasion of Ukraine. 

Several countries in Europe including the UK are already at serious risk of gas shortage. 

According to the chief executive of Shell, Ben van Beurden, he noted that the shortage of gas in Europe could last for several winters. 

“It may well be that we will have a number of winters where we have to somehow find solutions,” he said.

According to the spokesperson of NLNG, Andy Odeh, “The notice by the gas suppliers was a result of high floodwater levels in the operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG,”

Odeh however stated that NLNG is in process of examining the extent of the disruption and would try to mitigate the impact of the force majeure. 

Meanwhile, before the force majeure, Investors King understands that production from NLNG’s six-train Bonny plant had dropped to 16.8 million tonnes in 2021, from 20.7 million tonnes capacity in 2020. This has caused the company to lose more than $7 billion in revenue.