By Dipo Olowookere
Analysts at FSDH Research have predicted that inflation rate in the month of March will ease to 13.49 percent from 14.33 in February 2018.
Explaining reason for the expected drop in the inflation rate, FSDH said it would hinge on the base effect of higher prices in the Composite Consumer Price Index (CCPI) in March 2017 than the current month.
The investment research firm noted that the monthly Food Price Index (FPI) from the Food and Agriculture Organization (FAO) released today shows that the Index was up 1.05 percent to 172.8 points in March from the revised value for February.
The increase recorded in the FPI was because of a strong recovery in dairy and cereal prices.
The FAO Dairy Price Index appreciated by 3.26 percent in March as prices of butter, Whole Milk Powder (WMP) and cheese were on the increase.
This increase, it explained, was mainly supported by strong global import demand and lower than expected milk output.
It disclosed that the FAO Cereal Price Index was up by 2.67 percent from February and the sustained increase recorded in the cereal price Index was as a result of the rise in the prices of most of the major cereals.
The FAO Meat Index was up by 0.32 percent driven by the increase in the prices for ovine meat, pig meat and poultry meat.
On the flip side, the FAO Sugar Price Index dropped by 3.4 percent.
The drop in the Index is on the heels of favourable supply conditions in the main sugar producing regions, and a weaker Brazilian Real.
The FAO Vegetable Oil Price Index was down by 0.77 percent as soy, rape and sunflower oils prices dropped.
FSDH said its analysis indicates that the value of the Naira remained stable at the parallel market while it appreciated at the inter-bank market by 0.08 percent to close at $/N305.65 from $/N305.90 at the end of February.
It noted that the appreciation recorded at the inter-bank market between the two months under review moderated the impact of the imported consumer good prices in the domestic market.
The firm said prices of most of the food items it monitored in March 2018 recorded moderate appreciation, leading to 1.12 percent increase in its Food and Non-Alcoholic Index.
The Index increased by 16.31 percent from 229.71 points recorded in March 2017 with increase also noticed in the prices of Transport and Housing, Water, Electricity, Gas & Other Fuels divisions between February and March.
FSDH estimates that the increase in the CCPI in March would produce an inflation rate of 13.49 percent lower than the 14.33 percent recorded in February.
The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of March on April 16, based on the data release calendar on its website.
Adedapo Adesanya