Bread Prices in Nigeria are expected to rise over the coming weeks due to global wheat value chain disruptions caused by the Russian-Ukraine war.
This was disclosed by Wale Okunrinboye, Economic and Financial analysts, on the Nairametrics ‘On the Money’ series on Clubhouse last weekend.
He stated that the impact of the dislocations is expected to hit flour-intensive consumers in Africa even more including East Africa and North Africa.
Okunrinboye stated that the Russian-Ukraine region accounts for a large amount of wheat production, and that wheat is a key input in food value chains which Africans rely on for bread, spaghetti, noodles, biscuits and flour-based products
He said, “The key raw material is wheat, the Ukraine war has knocked out a significant amount of production. What that means is that a large supply is dislocated in countries that are very intensive with wheat, from East Africa to North Africa. There are heavy wheat consumers, as East Africa is very high in flour per capita consumption, including Southern Africa and francophone Africa. There are very limited substitutes to switching away.”
He stated that one thing that offers respite is that the crisis is not affecting rice, otherwise, Nigeria would have had trouble, since it’s a major staple,
“In Nigeria, bread prices will have to go up. That’s because, since the start of the covid pandemic, flour prices have surged already. Last year, prices were up 40%, this year, expect to see higher prices too.
“It’s just going to drive higher food prices, and people will have to switch away or reduce consumption of flour products. We are not seeing rice prices rise and if that was the case, would have been a worse situation.
“I expect bread prices to move up, just because of the dislocation from Russia,” he added.
Recall that the Premium Bread-Makers Association of Nigeria in April warned that prices of bread are expected to increase by 50% or more across different sizes due to key raw material and energy shocks caused by the war.
Due to the ongoing war, wheat futures trading on the Chicago Board of Trade is trading at their highest levels since the global financial crisis of 2008, in response to the war in Ukraine.