Others include unfavourable FX regimes and insecurity issues in the wheat-planting belt of Nigeria that have made securing food for the average Nigerian becoming tougher to sustain.
The report highlighted the profit eroding effects of the shrinking global wheat production levels, increasing cost and skyrocketing freight/ free on board (FOB) rates placed on Nigeria-bound goods on the revenue of flour millers and bakers
It submitted that the current price hike in the global wheat market, which the local millers rely upon to bridge the expansive supply short-fall occasioned by the low level of domestic wheat production, constitute an operational strain that is heavily impacting the cost of production of millers and have the potential to further elevate wheat-based staples prices.
Highlighting recent price volatility in the global wheat market, the analysts noted that from as early as the first quarter of 2021 the global price of wheat rose to US$642 per bushel in January 2021 and then US$650 per bushel by the end of the quarter.
Further market pressures saw prices settle at US$726.75 per bushel in May and by the end of June 2021, price dropped to US$693.5 per bushel, while yet another spike pushed price to US$707 per bushel in July 2021.
The sector report revealed how the millers and bakers absorb the inflationary burden and the impact of rising global wheat cost on the cost of wheat-based products.