Business
Bread prices rises faster than inflation rates – Report
Bread prices across Nigeria are climbing rapidly, with bakers and flour millers warning of no end in sight for rising costs. Flour prices, heavily influenced by Nigeria’s reliance on imported wheat, continue to surge. Industry leaders have stated that they have no choice but to pass these costs on to consumers, who are already grappling with inflation and higher food prices. According to recent reports, premium bread now sells for an average of N2,500 for large sizes, a 51.5% year-on-year increase, while low-income consumers face even steeper hikes of 76.5%.
Despite these challenges, the largest companies in the sector are reporting significant gains. Financial Vanguard’s findings reveal that the top three flour milling companies saw a combined 47.2% increase in revenue, reaching N2.5 trillion in 2023, while their costs rose by 45% to N2.2 trillion. This discrepancy has led to concerns that consumers may be paying more than is necessary, as the industry leaders maintain healthy profit margins.
Industry insiders cite various factors driving up production costs, including the rising cost of imported wheat, currency fluctuations, and fuel price increases. Transportation challenges, insecurity in wheat-producing regions, and inadequate infrastructure further exacerbate the problem. Additionally, despite two decades of efforts to boost local wheat production, Nigeria produces less than 1% of its wheat needs, leaving the country vulnerable to global supply chain disruptions.
Bakers warn that unless government intervention is forthcoming, bread prices will continue to rise. They are calling for the use of the 15% wheat development levy to support local wheat farming and for lower interest rates to make borrowing more affordable. Without these measures, the cost of bread, a staple for millions of Nigerians, may become increasingly out of reach.