Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists

“There is usually a lag and that is due to the expectation theorem. For example, if you expect the price of rice to increase, you will buy more and keep it in the house, So, it will increase your demand. But if you expect that prices will fall, what you already have you cannot dispose of.

“Reduction in production usually comes with a lag because of rigidity in production. If you already produce a certain product at a certain price and the price in the market is falling, you will then wait to see if the reduction will be sustainable. If you see that it is sustainable, then you can make a move to reduce the prices of your product. It is a lag effect,” Adegbei explained.

Favour Uche, a foodstuff seller at EFAB market, told Sunday PUNCH, “The price of rice didn’t reduce even now that the dollar is down.”

Uche emphasised the challenges faced by traders, including the expenses incurred to maintain product quality amid infrastructural constraints.

“The price of rice didn’t decrease. Even now that the dollar is down, it still hasn’t reduced. For example, a carton of Titus fish cost N90,000 two weeks ago but today, the same carton of fish is sold at N95,000 as of March 29, 2024.

“Even with the fact that the dollar has reduced, but being in the system, I think I understand why. It is because they use one-third of their profit to buy diesel to cool these fish and keep them frozen. After all, there is no light. So, I understand their pain and why the prices are like that,” she added.

Another trader, Abdul Yusuf, who sells meat, asserted, “Price did not come down even with the dollar fall.

“Two weeks ago the price of one kilogramme of meat was selling at N4,800 but now, it is N5,000. So, the price did not come down even with the dollar falling.”