FSDH Research, an investment analyst company on Thursday said the November 2016 inflation rate (year-on-year) might increase further to 18.45 per cent.
The figure represented an increase of 0.12 per cent from 18.33 recorded in the month of October 2016.
The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of November 2016 on December 15, 2016 based on the data calendar on its website.
The company said that the expected increase in the inflation rate would be driven by higher prices within the Food and Non-alcoholic Beverages Division.
It also said that the depreciation in the foreign exchange rate during the month would also be an influence.
The company said that the Food Price Index (FPI) on Thursday Dec. 8 by the Food and Agriculture Organisation (FAO) showed that the FPI trended downward in November.
The Index was down by 0.43 per cent, compared with the revised October figure.
The FPI’s easing in November 2016 was driven by a sharp fall in sugar prices, which was more than enough to offset a rebound in the prices of vegetable oils.
The FAO Sugar Index fell by 8.93 per cent, the first decline after six consecutive months of increase.
The weakening Brazilian currency against the U.S. Dollar, coupled with reports of a higher harvest in the Central South, Brazil’s main producing region, put downward pressure on prices.
The FAO Cereal Price Index declined by 0.60 per cent due to the decrease in the prices of wheat and rice, while Meat Price Index was down by 0.21 per cent,
It added that that was almost unchanged from its revised value for October.
Besides, the FAO Dairy Index appreciated by 1.95 per cent from October, as prices of whole milk powder and butter firmed up.
The FAO Vegetable Oil Price Index appreciated by 4.55 per cent marking the highest level since August 2014.
FSDH said that the strong rebound was primarily driven by the price of palm oil on the heels of lower than anticipated production in South East Asia.
The company said, “Our analysis indicates that the value of the Naira appreciated at the inter-bank market, while it depreciated at the parallel market by 2.09 per cent to close at N478.00 to the dollar from N468.00 at the end of October.
“The depreciation at the parallel market led to an increase in the prices of imported consumer goods in Nigeria between the two months under review,’’ FSDH said.
It said that the prices of food items that FSDH Research monitored in November 2016 moved in varying directions.
“The prices of palm oil, Irish potatoes, meat and rice were up by 32.17 per centm, 10.78 percent, 2.56per cent and 1.99per cent, while the prices of tomatoes and onions were down by 17.89 per cent and 2.78 per cent.
“The prices of garri, yam, beans, sweet potatoes and vegetable oil remained unchanged, ‘’ it added.
The company said that the movement in the prices of food items during the month resulted in a 0.7 per cent increase in Food and Non-alcoholic Index to 214.41 points.
It said, “We also noticed increases in Clothing and Footwear; Housing, Water, Electricity, Gas & Other Fuels divisions between October and November 2016.
“Our model indicates that the price movements in the consumer goods and services in November 2016 would increase the Composite Consumer Price Index (CCPI) to 211.28 points, representing a month-on-month increase of 0.76 per cent.
“We estimate that the increase in the CCPI in November will produce an inflation rate of 18.45 per cent,’’ FSDH said