Nigeria’s food inflation rate rose to 20.31 per cent in July, its highest level in six months, as farmers and poultry producers continue to grapple with rising production costs and weakening consumer purchasing power.

 

The latest increase is creating pressure across the agricultural value chain, with farmers facing higher costs for energy, transportation, fertiliser and other inputs while consumers struggle to afford food at prices that can sustain producers.

Data from the National Bureau of Statistics (NBS) showed that food inflation increased for the sixth consecutive month, rising from 8.89 per cent in January to 12.12 per cent in February and reaching 20.31 per cent in July.

The rise in food prices came despite a decline in Nigeria’s headline inflation, which fell from 15.91 per cent in June to 15.43 per cent in July.

The widening gap has raised concerns among agricultural stakeholders that the moderation in overall inflation is yet to translate into meaningful relief for households or farmers.

On a month-on-month basis, food inflation also increased to 5.56 per cent in July from 3.75 per cent in June. The NBS linked the increase to higher prices of commodities including crayfish, fresh pepper, onions, carrots, rice, water yam, tomatoes, garri, plantain, beef, eggs, guinea corn, ginger and plantain flour.

Although July’s food inflation remained below the 26.20 per cent recorded in July 2025, it represented an 8.19 percentage-point increase from the 12.12 per cent recorded in February.

Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, said the latest figures point to an affordability challenge driven largely by increasing production costs.

He identified energy and fuel costs, transportation, fertiliser availability and other structural challenges as major factors affecting farmers’ ability to maintain production.

According to Banjoko, rising energy costs have also affected fertiliser supply, making it harder for farmers to meet production targets.

He added that insecurity, flooding and high financing costs were compounding the pressure on agricultural businesses.

The combination of rising operating expenses and limited access to affordable finance is particularly challenging for smallholder farmers and agricultural businesses that have limited financial capacity to absorb higher costs.

The situation is also creating a difficult paradox in the poultry industry, where farmers are struggling to sell eggs even as food prices continue to rise.

Chairman of the Poultry Association of Nigeria, Lagos State Chapter, Mojeed Iyiola, said declining consumer demand had forced farmers to reduce egg prices to prevent their products from spoiling.

Eggs are highly perishable, leaving producers with limited options when sales decline.

Iyiola said thousands of crates of eggs were being wasted every week because farmers were unable to sell their output, forcing many producers to dispose of eggs at reduced prices.

For poultry farmers, the problem is compounded by the fact that production cannot simply be paused when demand falls.

Birds must continue receiving feed to maintain egg production, meaning farmers continue to incur expenses even when they are unable to generate sufficient revenue from sales.

The situation has left many agricultural businesses caught between two major pressures: rising production costs and declining consumer purchasing power.

Food inflation increased from 12.12 per cent in February to 14.31 per cent in March, 16.06 per cent in April, 16.96 per cent in May, 17.52 per cent in June and 20.31 per cent in July.

Meanwhile, headline inflation moved from 15.06 per cent in February to 15.38 per cent in March, 15.69 per cent in April, 15.93 per cent in May, 15.91 per cent in June and 15.43 per cent in July.

This means food inflation increased by 8.19 percentage points between February and July, compared with only a 0.37 percentage-point increase in headline inflation over the same period.

For MSMEs operating within the agricultural value chain, the trend presents significant challenges. Higher input costs can reduce profit margins, while weaker demand makes it difficult for businesses to pass the full cost of production to consumers.

Farmers who depend on bank loans are also exposed to greater financial pressure when unsold or spoiled products translate into losses and make loan repayment more difficult.

Agricultural stakeholders have warned that addressing food inflation requires more than focusing on consumer prices.

They want greater attention to the underlying cost of production, including energy, transportation, fertiliser, financing, security and infrastructure.

Reducing these costs could improve farmers’ productivity and enable agricultural businesses to offer food at more affordable prices without operating at unsustainable losses.

The July figures underline the need for stronger support across Nigeria’s agricultural value chain as farmers struggle to maintain production while households face declining purchasing power.

Unless the structural challenges affecting food production and distribution are addressed, the divergence between food inflation and headline inflation could continue to put pressure on both farmers and consumers. \)