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Nairaland Forum / Nairaland / General / Business / Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists (13358 Views)
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Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Paraman: 9:11pm On Mar 31 |
Economists have stated that it will take some time for Nigerians to feel the impact of the current strengthening of the naira against the dollar on the prices of commodities in the country. https://punchng.com/food-prices-wont-drop-immediately-despite-naira-appreciation-economists/?utm_source=telegram&utm_medium=social 8 Likes 3 Shares
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Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by libertyfather(m): 9:17pm On Mar 31 |
till when? 7 Likes 1 Share |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by immortalcrown(m): 9:25pm On Mar 31 |
Rational people know this. Sentimental and or ignorant people are the ones nagging. If you are rational and not selfish, you don't have to be a trader to understand that it is unfair to ask traders to reduce prices now. Only nonprofit organizations quickly adjust sale prices according to cost prices because they are not in the business to make profit. But they also adjust the prices in a way that will prevent the organizations from going bankrupt. Even NNPC has not reduced fuel price that is directly dependent on Dollar rate. This is because fuel imported or distributed at the old rate will be sold based on the old rate. This is a simple logic. Retailers that have old stock sell with the rate that will enable them buy more from wholesalers who imported at high rate. Also, retailers and importers who bought items after the fall of Dollar rate need to sell with the existing high prices because there is no guarantee that the current Dollar rate will either be stable or go lower. The Dollar rate has to either remain stable or continually fall for many months before it becomes wise for traders to reduce prices. Traders may reduce prices now and Naira will fall to 3k per dollar next two months, making it difficult for the traders to raise capital by then. Illustrations: 1. Old and cheaper stock. You bought 10 bags at the cost of ₦3,000 (₦300 per bag). You plan to sell each bag ₦400 to make the gross profit of ₦100 per bag. The cost price later increased to ₦500 per bag and you have sold only 5 bags. 400x5=2,000 (₦2,000). With the new cost price of ₦500 per bag, one bag is now sold for ₦600. But you continued to sell the remaining 5 bags at the rate of ₦400 per bag because they are old stock. After selling the 10 bags, you got ₦4,000. Someone that does not understand business will say you have ₦1,000 as your profit (4,000-3,000=1,000) because you bought the bags ₦3,000. The ₦1,000 is even a gross profit here, not net profit. But they don't understand that one. But did you actually make any profit? Let's check it. Since the new cost price is ₦500 per bag, you need ₦5,000 (500x10) to restock your shop. But you realised only ₦4,000 from your previous sales. This means you didn't make any profit and the money is not even enough to replace the sold bags. I am not even talking about the rent and utility bills you paid while selling the 10 bags Na to go village be that. 2. When you buy at high rate and the rate falls while you have not sold out the stock: You got 10 bags at the cost of ₦5,000 (₦500 per bag) and plan to sell each bag ₦600. You sold 5 bags and got ₦3,000 (600x5) before the cost price fell from ₦500 to ₦300 per bag. You reduced your sale price from ₦600 to ₦400 to please your customers. You got ₦2,000 (400x5) from selling the remaining 5 bags. This means you made the total of ₦5,000 from selling the 10 bags. Did you make any profit? No, because you paid ₦5,000 for the bags. Did you incur any loss? Yes because you paid rent, security and other utility bills when selling the 10 bags. 32 Likes 4 Shares |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by helinues: 9:26pm On Mar 31 |
Gravity no dey work when it comes to price of Goods and services in Nigeria. What goes up don't come down 49 Likes 2 Shares
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Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by oloriooko(m): 9:32pm On Mar 31 |
But food prices rose immediately naira depreciated 103 Likes 8 Shares |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by detopea1: 9:35pm On Mar 31 |
NNPC has not reduced price of imported petrol bought with dollars. Business people that know what they are doing will be looking at the body language of NNPC. We are in a volatilty stage. 3-5 months of stability will determine if there will be any significant price reduction of food. But we don't import yam, garri, etc. This shows that we are battling with cost push inflation which started when price of petrol went from 165 naira to 650 naira. Diesel price is high too. 27 Likes 1 Share |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by MaziObinnaokija: 9:35pm On Mar 31 |
we are our own enemies, enemies of progress in this country. Even those that have old stock will still shortchanged their customers. 29 Likes 5 Shares |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Richtaiwo: 9:38pm On Mar 31 |
dreji:Like seriously? He should have told you when the wares will be out of stock before ordering for fresh ones at the new rate? Honestly, I have been reading foolish comments but this particular one takes the crown. Are you aware this government owes you no explanation? Your president, gringory obi is your president and only he owes you any explanation. 5 Likes 1 Share |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by jkpbestseries: 9:39pm On Mar 31 |
when i become the president i will arrest anyone that read economics in school and set Price Regulatory Agency across the federation, becos all the economist have no solution to Nigeria economy. People are quick to add price but not quick to reduce price. 16 Likes 1 Share |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Ahmed0336(m): 9:45pm On Mar 31 |
oloriooko:Epp me tell em oooo Dis corn tree is just something else. 16 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Paraman: 9:53pm On Mar 31 |
libertyfather:next month or may |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by BlocksNG(m): 6:55am On Apr 01 |
batstards. 8 Likes 1 Share |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Vinnie2000(m): 6:56am On Apr 01 |
Prices will never come down again. By the expected time, Manufacturers, Wholesalers and Retailers will be too Unwilling to bring down the prices of their items. Tinibu should be BLAMED for putting Nigerians through Pains With his Useless policy of Fuel Subsidy Removal.😏😕 That Terrible Action set the Motion for most Traders to become Greedy or too Money Concious. 🙁 12 Likes 1 Share |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Stevenson20: 6:56am On Apr 01 |
There's no sign that the prices of foodstuffs will go down soon. Some of all these goods were already stored in warehouses before this dollar hike; yet we choose to sell them at an exorbitant amount immediately we hear that dollar has gone up. Politicians aside, na we the masses dey do ourselves 8 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by GrammarNazi1(m): 6:56am On Apr 01 |
Prices should drop as soon as possible. |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by magoo10(m): 6:57am On Apr 01 |
In other words the present naira gain needs to be sustainable for a reasonable period of time to enable prices of commodities to go back to normal. 6 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Tjra: 6:57am On Apr 01 |
MaziObinnaokija: oloriooko: 💯 5 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by JoeEeL(m): 6:57am On Apr 01 |
Where is catrioina laing that was deceiving u guys to go into elections and love nigeria? She don disappear leave una now abi? Una eye don clear? E never clear. APC, turn the heat on. 3 Likes
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Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by ivolt: 6:57am On Apr 01 |
jkpbestseries:Then be ready to see people queue to buy few beads produce daily. Layman "sense" doesn't work with economics. Many countries have learnt the lesson in a bitter and tragic way. 5 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Flame333: 6:58am On Apr 01 |
Most of them didn't buy at old dollar rate they only increase base on s speculation and are ready to take advantage of the increase.....Perishable and Semi Perishable goods price will drop but non Perishable will prove stubborn.... 9 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by wittywriter: 6:59am On Apr 01 |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by owiko(m): 6:59am On Apr 01 |
T |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by ScamDemicEra: 6:59am On Apr 01 |
....... mind control, propaganda, otumopo, occult, satanism can help you win election but cannot help in actual governance e.g bring commodity prices down. 10 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by CodeTemplar: 7:02am On Apr 01 |
See nonsense excuse. 8 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by TANID(m): 7:03am On Apr 01 |
That Was Absolutly true 1 Like |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Benjamin4388(m): 7:04am On Apr 01 |
Richtaiwo: You are typing trash 7 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by benjamin007: 7:06am On Apr 01 |
Bulk sales available lamme be your plug
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Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by vibbb: 7:07am On Apr 01 |
Jokers - Naira depreciation affects food price immediately - but when Naira appreciate, price of commodities will not be affected (reduce) immediately. 6 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by sofeo(m): 7:08am On Apr 01 |
Alright. We are waiting. |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Ffolksy: 7:10am On Apr 01 |
The loss will only be in the book. Not in reality When prices went up, why did sellers adjust their prices upwards immediately regardless of old stocks bought at lower prices? This only gave them massive profits on record, but not in actual reality. Cost of restocking is the actual determinant of the value goods in store. Sellers are making crazy profits this period cos they are overvaluing their goods. Just a matter of time, sellers who operate on the principle of rate of returns will force prices down. What's the point tying your money down, when you can sell out quickly and still have enough money to restock? 4 Likes |
Re: Food Prices Won’t Drop Immediately Despite Naira Appreciation – Economists by Vinnie2000(m): 7:10am On Apr 01 |
MaziObinnaokija: BLAME Tinubu. He is the Cause.😏😒 Retailers or Traders were NOT Greedy under Jonathan or Yaradua or even Buhari. As soon tinibu Removed Subsidy which led to Exhorbitant Fuel Price, the Economy Sommersaulted and Crashlanded.😌 If you as a Clothes Trader travel from Warri to Onitsha Markets on High transportation costs, Can you sell ur Clothes cheap?😕 As a Bookshop owner, If you Travel a Long Distance with high Tfare to get products, can you send the books cheap? 5 Likes |
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