Business

Price of bread rises faster than inflation

Published

Tuesday, 14 January 2025, 1:05 pm

John

•It’ll continue if… — bakers

•Flour millers give reasons for high prices

•Production cost rises 45% to N2.2trn

•Revenue rises faster at 47.5% to N2.5trn

By Peter Egwuatu, Asst Business Editor

There are indications that prices of bread and other flour based food items would continue to rise as bakers and flour millers said there is no end in sight for solutions to the key drivers of the cost in the sector.

Meanwhile the operators told Financial Vanguard that they would continue to pass the costs to final consumers as the market condition dictates.

But Financial Vanguard findings show that leading companies in the sector are recording faster rise in revenue and profit than the rise in their cost of production, apparently indicating they may be passing more than actual cost of production to the consumers.

The three biggest and most dominant companies in the sector recorded combined 45 percent increase in cost of production to N2.2 trillion in the full year 2023 from N1.5 trillion in 2022.

But their combined turnover at N2.5 trillion in the period under review, represents an 47.2% increase from N1.7 trillion in the previous period.

At the backdrop of what the operators see as entrenched cost drivers in the sector they said the price of flour which also drives the price of bread in Nigeria is still rising due to dependence on imported wheat.

According to them Nigeria produces less than 1% of its wheat needs, indicating the local supply quantity is actually decreasing despite the two decades of operating backward integration to building local production capacity.

They said while local output has declined from about 10 percent peak local consumption has increased by more than 40 percent in the past one decade.

They believe this trend is not going to change soon adding that more challenges have now come into the basket of troubles in the industry.

Listing the additional challenges, the industry operators included high exchange rate and scarcity of foreign exchange, rising cost of transportation due to rising prices of petrol and diesel as well as cost of energy in running the factories.

They also added insecurity and instability in wheat producing regions, inadequate storage facilities and poor infrastructure.

Bread prices rise over 76%

Financial Vanguard findings from retail dealers indicate that consumer prices for bread is now higher than inflation rate.

The retail price for the premium category as of last week was put at the market average of N2,500 for large sizes, an increase of about 51.5 percent year over year, as against an inflation rate of 32.15 percent.

The price increase is even much faster in the low income category where average price is now N1,500 for large sizes, up by 76.5 percent YoY, from N850 a year ago.

Bread vendors in some parts of Lagos who spoke with Financial Vanguard, lamented that even before the recent petrol price increases prices of bread have been going up.

They noted that they have experienced a drop in patronage and that they have also reduced their demands from bakeries.

Operators give insight

Reacting to the challenges facing the flour milling and bread industries, Comrade Mike Olanrewaju, General Secretary National Union of Food Beverage & Tobacco Employees, NUFBTE, said: “The price of flour in Nigeria is still rising due to dependence on imported wheat. Presently Nigeria produces less than 1% of its wheat needs. Transportation and logistics issues; foreign exchange supply and rising exchange rate; inefficient supply chain management issues; insecurity and instability in wheat producing regions; inadequate storage facilities and poor infrastructure have combined to pressure costs in the industry.”

He added, “Competition from imported flour and smuggled products, policy inconsistencies; technical and technological limitations are part of the problems facing the industry.”

Commenting on backward integration adopted by some companies to deal with the challenges of foreign exchange and imported inputs, he said: “Some Nigerian flour milling companies have adopted backward integration strategies, but challenges persist due to limited local Wheat production and quality issues; high cost of local wheat compared to imported one are the obstacles that have made the program fail in the industry.

Bakers’ comments

Responding to Financial Vanguard enquiries regarding the continued increase in prices of bread President of Premium Bread makers Association of Nigeria (PBAN), Engr. Emmanuel Onuorah, said: “To be very honest, businesses in Nigeria are facing various forms of challenges. All I can say is that the incessant increase in price of flour, which makes up about 60% of our cost is not good for the bakery industry in Nigeria.

“The challenges facing bakers are so numerous; price of our ingredients like flour, sugar, calcium Propionate (preservative), margarine, yeast, bread softener, ascorbic acid etc keeps increasing at alarming rate.

Multiple taxation by Federal, States and Local governments is stifling and almost crippling the bread making business.”

He decried the floating of forex, which he said contributed largely to the increase in the cost of clearing of their ingredients.

He stated: “If the current trend of escalation in price of ingredients continues, coupled with fuel price hikes, we shall have no alternative than to continue passing on the cost to consumers for us to remain in business.”

He called on the Federal Government to utilize the 15% wheat development levy collected from millers to carry out research on the improved seedling for high yield and disease resistant wheat cultivation; support the bakery industry to avoid its going extinct.

He added, “Interest rates by banks is hovering between 30% – 34%, this foes not encourage borrowing for working capital to keep our businesses afloat. The government should grant us single digit loans and grants.”

Flour Mills’ results

Driven by sustained demand across all the Company’s business segments, Flour Mills of Nigeria, FMN, the industry leader, operating revenue grew to N2.3 trillion for the financial year ended March 31, 2024, up 49% from N1.5 trillion the previous year.

Gross profit increased by 54% to N272 billion, apparently reflecting effective pricing and cost optimization measures leading to 61% growth in operating profit to N208 billion.

Commenting, Boye Olusanya, MD/CEO, FMN, said: “Despite the challenging economic environment, we have solidified our position as a market leader in the Food and Agro-allied sector, driven by innovative product offerings and efficient operations.”

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Business

NucleusIS Africa acquires Rigo Microfinance Bank

Published

4 weeks ago

December 17, 2024

John

NucleusIS Africa acquires Rigo – NucleusIS Africa acquires Rigo…

NucleusIS Africa acquires Rigo – Africa’s fast growing technology…

Africa’s fast growing technology company completes 100% acquisition of Rigo Microfinance Bank, making it one of the biggest healthcare finance technology companies in Africa. NucleusIS Africa Limited, Africa’s fastest-growing technology company, has announced its acquisition of Rigo Microfinance Bank Limited. This landmark takeover is expected to strengthen NucleusIS Africa’s ability to deliver cutting-edge healthcare financing services across the continent.

Speaking on the acquisition at press time, Mr. Femi Niyi, Board Chairman of NucleusIS Africa Limited, expressed optimism about the expanded opportunities this acquisition creates. “This acquisition aligns perfectly with our vision of transforming healthcare financing in Africa. Combining our innovative solutions with Rigo Microfinance Bank’s financial services infrastructure will enable us to address critical healthcare challenges more effectively,” he said.

The acquisition underscores NucleusIS Africa’s mission to close the healthcare funding gap through technology-driven solutions. By integrating Rigo Microfinance Bank’s established financial infrastructure, the company aims to broaden its reach and enhance its ability to offer seamless, customized financial services to healthcare providers and patients.

Industry experts believe this acquisition positions NucleusIS Africa as the leading force in healthcare finance innovation across Africa. NucleusIS Africa will be able to better support medical service providers and expand access to essential healthcare services for more Africans.

With the added capacity, the company plans to introduce new financial products designed to support healthcare providers, facilitate patient financing, and significantly improve access to quality healthcare services.

The move is a strategic step toward reshaping Africa’s healthcare financing landscape.

The acquisition of Rigo Microfinance Bank Limited marks a new chapter in the company’s mission to create sustainable healthcare solutions through financial empowerment.

NucleusIS Africa Limited, founded in 2021, is a Nigerian Tech Company leading groundbreaking innovation to enhance healthcare access in Africa, through technology and finance driven solutions. The company’s flagship platform automates health insurance operations, connecting insurers, healthcare providers, and individuals across Nigeria and Ghana.Within the last few years, the organization has onboarded over 700,000 insured individuals, while partnering with major health insurance providers.

NucleusIS has also introduced a groundbreaking credit product – Provider Advance, that has transformed the financing landscape for healthcare businesses. Pharmacies, hospitals, laboratories, and other providers can access collateral-free business loans in as little as 48 hours, eliminating the traditional financing hurdles of collateral requirements and lengthy turnaround times.

Within the last few years NucleusIS has demonstrated its commitment to supporting the healthcare industry, having disbursed over ₦10 Billion in loans to healthcare businesses across Nigeria.

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Business

Fuel hike, bad roads behind onion shortage – Anambra traders

Published

4 weeks ago

December 17, 2024

John

Fuel hike, bad roads – Fuel hike, bad roads…

Fuel hike, bad roads – Traders and buyers at…

Traders and buyers at Eke Awka Market, in Anambra State’s capital, have attributed the scarcity of onions to rising fuel prices and the country’s poor road network.

A News Agency of Nigeria (NAN) survey conducted on Tuesday revealed that onions, a key condiment used to spice food, have become increasingly difficult to find and afford.

Obigaeli Nwokoye, a petty trader dealing in onions, explained that a few weeks ago, there was no onion available in the entire market due to bad roads. She added that suppliers from the northern part of the country faced delays, as the high cost of fuel and poor road conditions hindered transportation and logistics.

“Drivers coming from Kano face major challenges, which delay their deliveries to Awka.

“The government should address these issues and give special attention to food transporters to ensure a steady supply of food items.”

Mrs Chioma Okeke, another seller, shared that the price of a bag of onions had skyrocketed to ₦370,000, compared to ₦258,000 in November. She further noted that the price had steadily increased throughout the year, from between ₦70,000 and ₦90,000 in January to ₦110,000 to ₦170,000 around August/October.

“From November to December, the price jumped to between ₦250,000 and ₦300,000.”

Mrs Doris Beluchukwu, a buyer, expressed frustration at the soaring prices and scarcity.

“Onions that used to cost ₦100 or ₦200 are now priced between ₦500 and ₦2,000,” she said.

She also urged the government to ensure its food regulatory agencies functioned effectively, as some of the food shortages might be artificial.

“Government needs to act quickly to ensure a steady supply of basic food items to markets across the country,” Beluchukwu added.

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Business

Free Slots: An accessible way to enjoy casino games

Published

4 weeks ago

December 17, 2024

John

Free Slots: An accessible – Free Slots: An accessible…

Free Slots: An accessible – According to statistics, the…

According to statistics, the revenue in the online gambling market is projected to reach 97.15 billion USD in 2024. This represents a revenue change of 14.1%. As more and more people want to enjoy the fun of the casino, it makes sense for online casinos to offer some games for free. In this article, we’ll tell you all about free slots and how you can access them for casino fun.

How Free Slots Work

Essentially, free slots are slot machine games that don’t cost you anything to play them. This means you can enjoy them as much as you want without worrying about spending any money. There are many benefits to this, of course. You can find your favorite games and enjoy them without the gambling element and you can try out new games to see if you like them before spending any of your hard-earned cash.

The games you can play will vary from site to site, just like their paid versions. You’ll get access to all of the common features like bonus rounds, free spins, and the progressive jackpot element if there is one. However, because you’re playing for free, anything you win will also be virtual, so there’s no chance of winning a payout—unless you’re using free spins from a no-deposit bonus, for example.

The Benefits of Free Online Slots

Free online slots have their advantages. Here’s a summary of why many people enjoy them:

It’s risk-free entertainment: You can play the games to your heart’s content without the fear of losing money being there.
Skill development: For slots that are more strategic or challenging, free slots and demo versions mean you get to practice your gameplay and familiarize yourself with the rules.
Work out how much you’d like to play with: When you play a game for free, you can test out its volatility and RTP (return to player) to see if it’s worth the risk of betting higher or whether you should stick to small amounts.
Diverse game selection: Free slots are available in a wide range of themes and styles. There are thousands of different ones available so you’ll always find something you enjoy.
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Key Features to Look For in Free Slots

Ultimately, what you look out for depends on the individual, but some things will make the free slot experience better. This includes:

The graphics and sound: This enhances the gaming experience and some games are much better than others.
Return-to-player (RTP) percentage: Playing free slots allows you to test out games with different RTPs to see if you like playing them and they’re worth the risk if the RTP is lower.
Mobile compatibility: Trying out a game on a mobile device for the first time can be a bit hit-and-miss. Using a free version means you can see if it works well before spending your money.

Tips For Finding the Best Free Online Slots

To find the best free slots, you’ll need to look around. Some online casinos don’t allow you to play their games for free until you register while others are happy to let you try them out before you sign up.

Looking at online reviews by other players is also useful as you won’t then waste time playing games you know aren’t great. Also, there are plenty of sites that aren’t casinos that allow you to play games by top developers in demo mode.

The Potential Problem of Free Slots in Online Gaming

Realistically, software developers allow you to play their games for free because they want you to enjoy them. Online casinos offer free games to entice you to join and spend real cash. If you know this and are a responsible gamer, there’s no reason why you can’t have fun playing this way. All reputable sites have responsible gaming tools so if you do decide to stop playing the free versions, be sure to join a site that is licensed and reputable, then you have protection against problem gambling.

Conclusion

Free slots have so many advantages and as long as you’re aware of the potential downside and are a responsible gamer, there’s no reason why you can’t continue to enjoy free slots for as long as you want. These are an entry point into the world of online casinos but they can just be where you stop too. Free slots are a relaxed way of learning about casino gaming mechanics and can help you unwind.

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