Food prices defy stable naira as transport costs keep inflation high

The relative stability of the naira in recent months has yet to translate into significantly lower food prices, with traders and consumers across major Nigerian cities saying the cost of essential commodities remains high despite a calmer foreign exchange market.

While the exchange rate has remained relatively stable in both the official and parallel markets compared to the sharp fluctuations seen in previous years, market surveys indicate that many households are still struggling with elevated food prices driven by transportation, logistics and other domestic factors.

At Mile 1 Market in Port Harcourt, produce trader Ngozi Eze said suppliers have been reluctant to reduce prices despite the naira’s improved stability.

“When the dollar was rising, prices increased immediately. Now that the exchange rate is more stable, suppliers say transport and diesel costs are still too high for prices to come down,” she said.

A similar sentiment was expressed by shoppers at Utako Market in Abuja, where civil servant Ibrahim Bello noted that although food prices are no longer rising as rapidly as before, they remain beyond the reach of many families.

“At least prices are no longer changing every week, but they are still high enough to force many households to cut back on what they buy,” Bello said.

At Lagos’ Mile 12 Market, grain trader Alhaji Kabir Sanusi explained that exchange rate stability mainly benefits imported goods, while locally produced food is influenced by other factors.

“The exchange rate affects imported products like wheat and vegetable oil, but prices of tomatoes, yam and other local produce depend more on transportation costs, road conditions and security in farming areas,” he said.

Recent market trends suggest that while some staple foods have recorded modest price declines, many commodities remain expensive. Local rice and imported rice have become slightly cheaper compared to earlier in the year, while beans have seen marginal reductions in some markets. However, tomatoes and other perishable produce continue to experience price volatility due to seasonal supply shortages and distribution costs.

Economists say exchange rate stability is only one of several factors affecting food inflation. They note that high fuel prices, rising haulage costs, poor storage infrastructure and post-harvest losses continue to increase the cost of moving agricultural produce from farms to urban markets.

Analysts also point out that many retailers are slow to lower prices because they are still selling inventory purchased when wholesale costs were significantly higher.

Although the naira’s relative stability has reduced uncertainty in the foreign exchange market, experts say consumers are unlikely to see substantial reductions in food prices unless transportation costs ease, agricultural supply chains improve and domestic inflation slows.

For many Nigerians, the stability of the currency has provided some predictability, but the cost of putting food on the table remains a pressing concern.