Economy
World Food Prices Drop 20% From One Year Peak
By Adedapo Adesanya
World food prices have fallen for the 12th month in a row, now down 20 per cent from a one-year peak in March, according to the latest data from the Food and Agriculture Organisation (FAO).
The FAO Food Price Index (FFPI) averaged 126.9 points in March 2023, down 2.8 points (2.1 per cent) from February.
During the past 12 months since March 2022, the index has fallen by as much as 32.8 points (20.5 per cent).
The decline in the index in March was led by drops in the cereal, vegetable oil and dairy price indices, while those of sugar and meat increased.
The FAO Cereal Price Index averaged 138.6 points in March, down 8.2 points (5.6 per cent) from February and 31.6 points (18.6 per cent) below its one year ago.
This month’s decrease reflects a fall in international prices of all major cereals. International wheat prices fell the most, by 7.1 per cent, driven by ample global supplies and strong competition among exporters.
The extension of the Black Sea Grain Initiative, allowing Ukraine to continue to export from its Black Sea ports, also contributed to the decline.
Higher estimates for Australia’s production, along with improved crop conditions in the European Union this month, boosted the global supply outlook further. Strong competition from the Russian Federation, where high supplies continue to support competitive prices, also sustained the downward pressure on markets.
World maize prices also fell, by 4.6 per cent, in March, pressured by seasonal availability from harvests in South America, expectations of record output in Brazil, and the extension of the Black Sea Grain Initiative.
Among other coarse grains, world prices of barley and sorghum declined by 6.7 per cent and 5.7 per cent, respectively, influenced by spillover from weakness in international maize and wheat markets.
International rice prices eased by 3.2 per cent in March, weighed by ongoing or imminent harvests in major exporting countries, including India, Viet Nam and Thailand.
The FAO Vegetable Oil Price Index averaged 131.8 points in March, down 4.1 points (3.0 per cent) from February and standing as much as 47.7 per cent below its level a year ago.
The decrease in the index was the net result of lower soy, rapeseed and sunflower oil quotations more than offsetting higher world palm oil prices.
After falling for three consecutive months, international palm oil prices rebounded in March. Besides lower output levels in Southeast Asia due to unfavourable weather and floodings in some growing regions, palm oil prices received further support from limited global exportable supplies amid temporary export restrictions imposed by Indonesia.
By contrast, world soy oil prices continued to fall, following the trend of lower international soybean quotations. In the meantime, rapeseed and sunflower oil prices also kept declining, underpinned by, respectively, ample world supplies and subdued global import demand.
The FAO Dairy Price Index averaged 130.3 points in March, down 1.1 points (0.8 per cent) from February and standing 15.6 points (10.7 per cent) below its level in the corresponding month a year ago.
The decline in March was driven by lower price quotations for cheese and milk powders, while butter prices increased.
The decline in the international price quotations for cheese was underpinned by slower purchases by most leading importers in Asia amid increased export availabilities, including inventories, in leading exporters.
Milk powder prices fell for the ninth consecutive month, primarily reflecting sluggish import demand, especially for near-term deliveries, and seasonally rising milk production in Western Europe.
By contrast, butter prices increased due to solid import demand, especially from North and Southeast Asian countries, for supplies from Oceania, where seasonally falling milk production tracked slightly below trend levels.
The FAO Meat Price Index* averaged 113.0 points in March, slightly up (0.9 points and 0.8 per cent) from February but down 6.3 points (5.3 per cent) from one year ago.
In March, price quotations for bovine meat increased, influenced by rising internal prices in the United States of America, where cattle supply is expected to be lower in the months ahead.
Pig meat prices increased slightly, mainly due to higher prices in Europe on the continued supply limitations and increased pre-Easter demand.
By contrast, poultry meat prices fell for the ninth successive month on subdued global import demand, despite supply challenges amid widespread avian influenza outbreaks in several large exporting countries.
Ovine meat prices also averaged lower, reflecting a downward adjustment from the high prices registered in February, driven by increased pre-Easter demand and the impact of exchange rate movements.
The FAO Sugar Price Index averaged 127.0 points in March, up 1.8 points (1.5 per cent) from February, marking the second consecutive monthly increase and reaching its highest level since October 2016.
The increase in prices mostly resulted from concerns over lower global availabilities of sugar in the 2022/23 season, following declining production prospects in India, Thailand and China.
However, the positive outlook for the sugarcane crops in Brazil, about to be harvested, limited the upward pressure on world sugar prices.
The decline in international crude oil prices, encouraging greater use of sugarcane to produce sugar in Brazil, coupled with the weakening of the Brazilian Real against the United States Dollar, contributed to limiting the month-on-month increase in world sugar prices.
Despite the fall in the global price of food commodities, domestically, factors like inflation, weakening currencies, and other factors, including taxes and hikes in interest rates, are making them expensive.
By Adedapo Adesanya
The United States has lamented Nigeria’s import ban on 25 different products, particularly in agriculture, pharmaceuticals, beverages, and consumer goods, as it rationalised the recent decision to slap a 14 per cent retaliatory tariff.
The United States Trade Representative, in a statement on Monday posted on its X platform, said Nigeria’s restrictions on items like beef, pork, poultry, fruit juices, medicaments, and spirits limit US market access and reduce export opportunities.
“These policies create significant trade barriers that lead to lost revenue for US businesses looking to expand in the Nigerian market,” it wrote.
Last week, the administration of President Donald Trump imposed various tariffs ranging between 10 per cent and 65 per cent on different countries across the world, including Nigeria which got a 14 per cent tariff on its exports to the US.
In response, the Nigerian Minister of Trade, Industry, and Investment, Mrs Jumoke Oduwole, said Nigeria would take a pragmatic approach and will boost non-oil exports to deal with the drawbacks from the US move.
She also said Nigeria will be willing to negotiate and will be speaking with the World Trade Organisation (WTO) on the way forward.
On his part, the Minister of Finance, Mr Wale Edun, said that the Economic Management Team (EMT) would meet to assess the likely impact of the 14 per cent tariff on goods exported from Nigeria to the US.
He said the EMT will afterwards, make recommendations to cushion its impact on the nation’s economy.
The Minister also said the federal government will boost non-revenue as a means of cushioning the adverse effects to trade tariffs imposed on countries by President Trump.
Mr Edun also assured that while the adverse effect on Nigeria will be through an oil price plunge, the government is intensifying efforts to ramp up oil production and boost non-oil revenues.
By Adedapo Adesanya
Nigeria and Japan have launched a strategic venture capital initiative that will channel Naira-denominated investments into high-growth startups, shielding them from currency risks while unlocking access to long-term concessional financing.
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, met with officials from the Nigeria Sovereign Investment Authority (NSIA) and the Japan International Cooperation Agency (JICA) to finalise the framework of the fund, which has now received formal approval from the Japanese government.
Speaking on the development, Mr Edun welcomed the development, calling it a timely response to Nigeria’s youthful demography.
He said this fund provides critical financial backing across the capital structure—from equity to debt—and is aligned with President Bola Tinubu’s Renewed Hope Agenda for inclusive economic growth, he stated.
On his part, NSIA CEO, Mr Aminu Umar-Sadiq confirmed that the initiative satisfies two key conditions set by the Minister: mitigating foreign exchange volatility by investing in Naira and securing first-loss or grant capital to de-risk private investment.
“With JICA’s support, this is not just a proposed solution—it’s a fully approved, ready-to-launch initiative,” Mr Umar-Sadiq said.
By combining international concessional financing with domestic currency stability, the fund marks a new model for venture capital in Africa, aimed squarely at empowering the next generation of Nigerian innovators.
By Adedapo Adesanya
The Minister of Finance, Mr Wale Edun, has said the country’s Economic Management Team (EMT) would meet to assess the likely impact of the 14 per cent tariff on goods exported from Nigeria to the United States.
Mr Edun made the disclosure while speaking at an event organised by the Ministry of Finance Incorporated (MOFI) on Monday.
The Trump administration recently imposed various tariffs ranging between 10 per cent and 65 per cent on different countries across the world, including Nigeria which got a 14 per cent tariff on its exports to the United States.
He said the EMT will afterwards make recommendations to cushion its impact on the nation’s economy, noting that the federal government will boost non-revenue as a means of cushioning the adverse effects to trade tariffs imposed on countries by President Trump.
Mr Edun stated that while the adverse effect on Nigeria will result in an oil price plunge, the government is intensifying efforts to ramp up oil production and boost non-oil revenues.
The Finance Minister noted that the US, which is at the centre of the tariff war had on April 2, announced that it would exempt mineral exports, including oil.
“Therefore, it’s the price effect, the oil price effect that may affect Nigeria. And it is the job and responsibility of the economic management team of President Bola Ahmed Tinubu, amongst others, to look at the various scenarios that might play out.
“There’s global uncertainty at a huge level, so nobody knows exactly what will happen- the announcement that has been made. We’re not sure what will be delayed, what will be reversed, or what will be implemented.
“So, it is not an announcement that the budget is being reviewed. It’s an announcement that it is our responsibility to look at the various scenarios and options and advise government accordingly.”
Mr Edun also highlighted plans to look at budget adjustment, expenditure prioritisation as well as innovative non-debt financing strategies.
According to him, Nigeria had recorded a trade surplus in the last three years (2022-2024) with the US.
“Nigeria-US Trade has been in surplus in the last 3 years (2022-2024). Nigeria’s exports to the US were N1.8 trillion, N2.6 trillion and N5.5 trillion in 2022-2024, respectively.
“Fortunately, oil and mineral exports accounted for 92 per cent. Implying oil and minerals exports amounted to N5.08 trillion in value while non-oil was just N0.44 trillion.
“Consequently, the tariff effect on exports is negligible if we sustain our oil and minerals export volume.
“The adverse effect on Nigeria will be through oil price plunge. We are intensifying efforts to ramp up crude oil production to curtail any price effect
“We are also focusing on non-oil revenue mobilisation by FIRS and Customs, budget adjustment and prioritisation where possible, and also and innovative non-debt financing strategies,” the Minister said.
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