New report puts October food inflation at 11.10%

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A report has stated that food inflation went up to 11.10 per cent, a rise of 90 basis points in the month of October.

The report, issued by the Financial Market Dealers’ Association, noted that the figure represents an increase of 90 basis points or 8.8 per cent compared to 10.20 per cent recorded at the end of September.

According to the FMDA Monthly Financial and Economic Report, this was caused by the recent floods ravaged farmlands and a continued inflation in imported food.

Recently, the World Bank had issued a warning that there was an impending global food crisis with crippling food inflation. In the late August edition, its Food Price Watch, the bank reported that global prices for food as reflected by its Food Price Index rose by 10% in July 2012 alone.

It stated that the for staples such as corn and soya beans, their prices were at an all-time high with increases of 25% and 17% respectively over a single month.

Earlier, the FAO had reported its Food Price Index had risen by six per cent in July 2012 on the back of grain and sugar prices. Cereal prices had risen by 17% in June relative to the previous month, maize prices by close to 23% and wheat by around 19%.

The FMDA report said, “In the near term, core inflation is likely to inch up as a result of the current increase in prices of items in its structural components coupled with the inability of monetary policy to single-handedly drive-down the index.

“Similarly, sharp decline in food inflation remains elusive, in view of food items demand pressure for December festivities.”

The report also indicated that the General Price level indicator in the Nigerian economy rose to 11.7% in October – a rise of 40 basis points from 11.3 per cent in the headline index.

“Core inflation which excludes the prices of volatile agricultural products also decelerated by 70 basis points to 12.40 per cent from 13.10 per cent the previous month, reflecting the fourth consecutive drop after its year-on-year peak of 15.20 in June,” the report noted.

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