Low inventory and transport cost push price of beans to N100,000
The price of a big bag of brown beans has skyrocketed to N100,000 as traders lament low inventory and a significant increase in transportation cost as reasons for the sudden surge. This is according to information obtained by Nairametrics team from staple food traders in various markets in Lagos State.
A big bag of brown beans, which sold within the range of N85,000 and N88,000 last week has now surged by over 17% to sell as high as N100,000 in major markets and stores around the city of Lagos. According to Nairametrics databank, the price of beans has increased by 140.96% year-to-date from N41,500 recorded as of December 2020 to sell for an average of N100,000 in Lagos. A further analysis, reveals the highly demanded food item has increased by 203% compared to the corresponding period of 2020.
In the same vein, Nigeria’s consumer price index report shows that the food index rose by 20.3% in August 2021, representing a decline compared to 21.03% recorded in the previous month. It is worth noting that Nigeria’s food index has maintained double-figure growth since June 2015. The galloping rate of food inflation has been attributed to a series of events that have further dampened the government’s effort towards food sufficiency in the country. These events include insecurity, border closure, disruption in the supply chain, infrastructural problem, amongst others.
Why beans is suddenly the new gold
Beans, which is a highly demanded food item, used in the making of many other delicacies such as bean pudding (“moi moi”), bean cake (“akara”), beans soup (“gbegiri”), and many others, has now hit a record high in terms of price.
Meanwhile, Nigerians are beginning to react to this recent increase as Nairametrics inquired from traders on the possible causes of the sudden spike.
According to Aisha, a dealer at Daleko market, the recent increase in the price of beans is due to low inventories at the market and a surge in transport cost. She explained that due to the increase in transport cost, the suppliers are forced to bring in stocks only once in two months, causing a double whammy of cost-push and demand-pull inflation.
Likewise, Mr Kelechi who sells beans at Mile-12 market attested to the significant increase in the price of beans, which he termed “shocking.” According to him, it is definitely not a seasonal effect, because the price is way above the levels recorded as of this time last year.
He, however, suggested it could have something to do with the level of insecurity ravaging the northern region of the country.
What NBS data is saying
According to data from the National Bureau of Statistics (NBS), the price of brown beans sold in loosed containers increased by 62.4% year-on-year in August 2021 from N305.43 to an average of N496.03 in Nigeria. The report also reveals that beans is cheapest in Bauchi State while it is most expensive in Ebonyi State.
Similarly, the price of beans surged by 66.76% year-on-year in Lagos State, rising from an average of N290.76 to sell for N484.88. This is a massive jump in price for an economy where citizens are dealing with a host of other economic problems.
Why this matters
The significant increase in the price of beans could have a ripple effect on the prices of other common food items, which are bye-products of beans. In the same vein, the consistent increase in the price of food items continue to erode the purchasing power of Nigerians.
{Naira Metrics}
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