Nigeria’s food inflation rate climbed to 20.31 per cent in July, marking its highest level in six months as farmers and poultry producers continue to face rising production costs and weakening consumer purchasing power.
The increase is putting additional pressure on businesses across the agricultural value chain, with producers dealing with higher expenses for energy, transportation, fertiliser and other inputs while consumers struggle to afford food at prices that can support sustainable production.
According to data from the National Bureau of Statistics (NBS), food inflation rose for the sixth consecutive month, increasing from 8.89 per cent in January to 12.12 per cent in February, before reaching 20.31 per cent in July.
The increase 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 between food and headline inflation has raised concerns among agricultural stakeholders that the moderation in overall inflation is yet to provide meaningful relief to households and food producers.
Food prices continue to climb
On a month-on-month basis, food inflation increased to 5.56 per cent in July, up from 3.75 per cent in June.
The NBS attributed the increase to rising prices of several food 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 rate 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.
Food inflation rose 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.
Rising production costs squeeze farmers
Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, said the latest figures highlight a growing affordability challenge driven largely by rising production costs.
He pointed to energy and fuel prices, transportation, fertiliser availability and other structural challenges as major factors affecting farmers’ ability to sustain production.
Banjoko also noted that higher energy costs were affecting fertiliser supply, making it increasingly difficult for farmers to achieve their production targets.
Insecurity, flooding and high financing costs are further compounding the difficulties faced by agricultural businesses.
For smallholder farmers and MSMEs, the combination of higher operating costs and limited access to affordable financing is particularly challenging, as many lack the financial capacity to absorb rising expenses.
Poultry farmers face falling demand
The challenges extend to the poultry sector, where farmers are struggling to sell eggs despite rising food prices.
Chairman of the Poultry Association of Nigeria, Lagos State Chapter, Mojeed Iyiola, said declining consumer demand had forced some farmers to reduce egg prices to prevent their products from going to waste.
Because eggs are highly perishable, producers have limited options when demand falls.
Iyiola said thousands of crates of eggs were reportedly being wasted each week as farmers struggle to sell their output, forcing some producers to dispose of eggs at significantly reduced prices.
The problem is further complicated by the nature of poultry production. Farmers cannot simply suspend production when demand declines because birds still require feed to maintain egg production.
As a result, producers continue to incur feeding and operational costs even when sales revenues are insufficient.
Food businesses caught between rising costs and weak demand
The situation has created a difficult operating environment for businesses across Nigeria’s agricultural value chain.
While production costs continue to rise, consumers are becoming increasingly price-sensitive as their purchasing power weakens. This makes it difficult for farmers and food businesses to transfer the full increase in production costs to consumers.
Headline inflation, meanwhile, 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.
The figures show that food inflation increased by 8.19 percentage points between February and July, while headline inflation increased by just 0.37 percentage points over the same period.
For MSMEs operating within the agricultural sector, the trend could significantly affect profitability and cash flow.
Businesses relying on bank loans may face additional pressure when unsold or spoiled products result in financial losses, making it harder to meet repayment obligations.
Stakeholders call for action on production costs
Agricultural stakeholders have stressed that tackling food inflation requires more than measures aimed at controlling consumer prices.
They are calling for greater attention to the structural factors driving the cost of food production, including energy, transportation, fertiliser, financing, insecurity and inadequate infrastructure.
Reducing these costs could help farmers improve productivity and allow agricultural businesses to offer food at more affordable prices without operating at unsustainable losses.
The July figures highlight the growing pressure on Nigeria’s agricultural sector, with farmers struggling to maintain production while households contend with declining purchasing power.
Without interventions to address the structural challenges affecting food production, transportation and distribution, the persistent gap between food inflation and headline inflation could continue to place pressure on both farmers and consumers.
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