More suffering for Nigerians as a result of rising costs as bread prices rise quickly

The prices of bread and other flour-based food items in Nigeria are set to continue rising as bakers and flour millers warn of ongoing cost pressures in the sector.....KINDLY READ THE FULL STORY HERE▶

Factors like increasing flour prices, fueled by Nigeria’s dependence on imported wheat, high exchange rates, transportation costs, and energy prices are driving the increment.

Despite companies in the sector implementing cost-cutting strategies, they report significant increases in revenue and profit, indicating consumers may be paying more than the actual rise in production costs.

In 2023, the three largest companies in the sector saw a 45% rise in production costs but an even greater 47.2% increase in turnover.

Flour prices have escalated as Nigeria produces less than 1% of its wheat needs, while local consumption has increased by over 40% in the last decade.

Additionally, challenges like foreign exchange scarcity, insecurity in wheat-producing regions, and poor infrastructure exacerbate the situation.

Bread prices have outpaced inflation, with premium loaves now costing around ₦2,500, a 51.5% increase year-on-year, and low-income bread sizes selling for ₦1,500, up by 76.5%.

Bakers, facing skyrocketing costs for ingredients and taxes, continue to pass these increases on to consumers.

President of Premium Bread makers Association of Nigeria (PBAN), Engr. Emmanuel Onuorah told Vanguard: “To be very honest, businesses in Nigeria are facing various forms of challenges.

“All I can say is that the incessant increase in the 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; the price of our ingredients like flour, sugar, calcium Propionate (preservative), margarine, yeast, bread softener, ascorbic acid etc keeps increasing at an alarming rate.

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

Meanwhile, the National Union of Food Beverage & Tobacco Employees (NUFBTE) has called for government intervention to prevent the industry from collapsing.

Despite the challenges, leading companies like Flour Mills of Nigeria have seen operating profits grow by 61%, driven by high demand and cost optimization strategies.