The SBM Jollof Index – Keep those belts tight please
1st August 2018
The SBM Jollof index is a composite index that tracks the prices of the main ingredients used to prepare a pot of one of Nigeria’s primary delicacies – Jollof rice. This meal was chosen because it is a delicacy in every part of the country.
Over the last four months – from March 2018 to June 2018, the index has risen steadily, indicating a steady increase in food prices. By the end of June, the index has risen to the highest ever since we began tracking in July 2016. This indicates that despite the slowdown in inflation, food prices are still rising, and Nigerians are reacting accordingly.
Kano remains the town with the highest average cost of a pot of Jollof rice for a family of six, while Onitsha is the cheapest.
In both Abuja and Lagos, rising costs have opened an opportunity for smaller manufacturers, which has led to an inflow of more varieties of goods as compared to the past. In reaction to this, many of the larger FMCG manufacturers are now repackaging goods in smaller quantities (often called economy packs) that command lower retail prices that are friendlier to the budget requirements of medium to low-income earners. While this gives buyers the opportunities to continue patronising their preferred brands at lower prices, there is some evidence in company financial filings that the rise in more creative “economy packs” is hurting the bottom line of manufacturers as they seek to preserve market share at the expense of increasing the unit margin gain on their products.
From the consensus of a lot of our shopping respondents, it would appear that the number of shrinking cooking pots across the country may be on the rise.