Business
Grain merchants, foodstuff sellers incur heavy losses
..as prices of commodities fall in marke
Grain merchants and foodstuff sellers in the country have continued to count their loses as the prices of foodstuffs across the federation continued to fall, Business Hallmark can report.
The worst hit, according to BH findings, are traders of grains, such as rice, beans, maize, sorghum, millet, wheat, and soya beans.
This is just as the sellers are flooding the markets with hoarded goods in a desperate effort to cut their losses.
Since the beginning of the year, prices of foodstuffs, especially grains, have steadily declined, bringing some sort of relief to millions of Nigerians assailed by high cost of food items.
BH survey in selected markets across the country at the weekend indicated a drastic drop in the prices of agro commodities.
At the Ile-Epo, Daleko, and Dalemo Markets, all in Lagos, a 50kg bag of foreign parboiled rice, which sold at between N85,000 to N115, 000 in December 2024, depending on the brand and quality, now sells for between N55,000 to N75,000.
Meanwhile, 850g Derica cup measurement, which sold for N1,200 to N1,400 last December, now sells for N850 to N900 in the markets.
Likewise, a 100kg bag of brown beans, which sold for a record high of N250,000 in October 2024, currently sells for between N110,000 to N120,000 in Lagos.
Also, a 100kg bag of sorghum and millet now go for N48,000 and N52,000 respectively, against the average selling prices of N97,000 and N120,000 in October 2024.
Findings revealed that prices of goods are relatively cheaper in rural areas in the South and border towns.
For instance, a 50kg bag of foreign rice currently sells below N50,000 in Sango, Ota, Ifo and Ilaro areas of Ogun State and Saki, Ilora, Okeho and Sepeteri areas of Oyo State.
Up North, findings showed that the prices of agricultural produce are much more lower than in the southern parts of the country.
For instance, a 100kg bag of beans at the Gwadabe Market and Kure Ultra Modern Market in Minna, Niger State, currently goes for N92,000; maize N44,000; sorghum N39,000, and millet N38,000, compared to their selling prices of N220,000, N90,000, and N100,000 respectively in October 2024.
Checks also showed that prices of foodstuffs have crashed in the North West and North Eastern parts of the country.
At the Jimeta Market in Adamawa State, a bag of local rice that was previously sold from N60,000 to N65,000 now goes for N42,000.
Also, the price of a 100 kg of beans, which was sold at N190,000 in 2024, has fallen to N84,000.
Other farm products, which prices have considerably dropped in the market, include maize that now sells for N43,000 and N48,000 compared to N60,000 and N65,000 per 100 kg bag in October 2024; millet from N60,000 to N41,000; sorghum from N55,000 to N32,000 and groundnut from N105,000 to N78,000 per 100kg bag.
In the same vein, the prices of other food items have drastically come down. For instance, the average price of a paint bucket of yellow garri is now N2,800 across the country, while the same quantity of white garri sells for N2,000 on average, compared to N4,000 and N3,000 respectively in October 2024.
Also, a medium-sized tuber of yam currently sells for between N3,000 and N4,000 in Lagos, compared to N7,000 in the third quarter of 2024.
Factors Responsible
BH findings revealed that many factors are responsible for the sharp fall in prices. They include government’s removal of taxes and customs duties on some grains; glut in the international grain markets, which has forced producing nations to crash prices; India’s return to the gains export market; the stabilisation of the naira as well as government’s numerous interventions in the agricultural sector, which have boosted production.
Experts, who spoke on the development, predict that prices of foodstuffs will further drop with glut hitting global commodities market and global prices continuing on a downward trajectory.
According to the Chairman of the Federation of Agricultural Commodity Association of Nigeria (FACAN), Victor Iyama, as global prices of grains, especially rice, continued to fall, Nigeria will also see a decline in prices.
Sellers Count Losses
However, while hard pressed Nigerians are heaving a sigh of relief over the downward trend in food prices, grain merchants, who had bought the products from farmers in large quantities and stored in warehouses in anticipation of further spike in prices, are lamenting the crash as they continued to incur huge losses.
Our correspondent reliably gathered that many of the grain merchants, especially the big ones, cumulatively took billions of naira in bank loans to store up products awaiting when prices will rise.
On the other hand, some of the merchants without access to bank facilities, it was learnt, mortgaged their assets, including vehicles and landed properties in early and middle 2024, using the proceeds to mop up grains like soybeans, millets, local rice, maize, beans and groundnuts from the farms with the hope that prices would go up as it did in 2023 and 2024.
A trader at the popular Ile-Epo Market in Lagos, who demanded to be identified only by her first name, Mojisola, lamented that she and many of her colleague-traders are now in serious debt as a result of their miscalculations.
“I am in serious trouble as I don’t know how I will repay the over N40 million loans I took to stock up my stores with grains for the December 2024 and January 2025 festive season.
“I anticipated price hike during the Yuletide and stocked up on grains to sell at a profit. However, rather than prices go up, it has continued to drop.
“While many people failed to notice the trend, it actually started around October 2024 when prices of goods in the market remained stagnant.
“I panicked towards the end of last year when prices of foodstuffs products started falling and moved to cut my losses by selling off the stocks I have at the exact amount I got them back in July 2024, but some people advised that I should wait till the Ramadan and Easter season when prices of foodstuffs normally go up.
“Unfortunately, for the first time in the history of this country, prices of goods went down during the two festive periods (Ramadan and Easter), further pushing some of us into debts.
“I should have obeyed my gut feelings and sell off the products in December and January as earlier planned. Now, I can’t even sell off the goods at discounted rates as Nigerians are only buying in bits. And there are projections that it will get worse”, Mojisola lamented.
Mojisola is not the only merchant caught in the web. Many sellers, who bought products and hoarded it with the hope of maximizing profits, now live in perpetual fear of a sustained market glut.
Some sellers in the northern part of the country, who reluctantly agreed to speak on the matter, said they experienced significant losses and may soon go under if the trend (price crash) continues unabated.
According to a trader at the Wuse Market in Abuja, the Federal Capital Territory (FCT), Yusuf Abaji, he had lost over N10 million since the glut started late last year.
“I am even lucky as I didn’t get any loan to stock up, compared with many of my friends, who either sold their properties of secured huge loans from microfinance banks to buy grains directly from farmers in large quantities.
“I know a colleague, who got over N45 million loan from a local bank in August 2024, which he used to buy thousands of 100kg bags of sweet beans and maize at the cost of N120,000 and N99,000 respectively.
“Unfortunately, the prices of the same quantity of beans and maize are currently selling for N82,000 and N43,000 respectively. This translates to a loss of N38,000 on a bag of beans and N56,000 on a bag of maize. He no longer come to the market as loan firms recovery agents always lay siege for him.
“And it does not look as if the trend is about to end soon. Each market day bring its tales of woes as prices keep crashing.
“We are fearfully waiting for market to resume fully on Monday, hoping that the bloodbath will soon end”, Abaji prayed.