06 June ( Lagos):  The Analyst’s Urban Retail Price Tracker—the PURP index— recorded an increase of 0.77% MoM to 105.7 pts in the month of May (vs 0.69% MoM in April). Their survey revealed a mixed play of prices. While the brewery and commodities sector saw increased prices due to high transport cost and the ongoing Ramadan festival, prices in the consumer sector were largely lower MoM. Volumes were generally higher across board.

The brewery sector saw price increases for the third consecutive month with prices up 0.86% MoM. Notably, Trophy (2.22%) and Gulder (1.96%) both witnessed a faster pace of price increase MoM. Feedback from retailers linked the increase in prices to higher transport cost in the month. On volumes, feedback from retailers revealed a decline in volumes during the month.

The commodities basket increased 0.84% MoM in May. Prices were higher across board save for palm oil -0.69%. Over the period, both vegetable oil and rice witnessed price increases of 0.43% MoM and 2.25% MoM respectively. For palm oil, feedback from retailers showed that stability in prices has been driven by increased supply of the commodity. Elsewhere, feedback from retailers associated the general increase in price of both vegetable oil and rice to higher transport cost in the month of May as well as the Ramadan festival which made it possible for retailers to raise prices.

The consumer sector saw a mixed play of prices with an overall decline in prices by 1.56%. Amongst the products that witnessed price increase include Honeywell (12.82%) and Dangote pasta (13.89%) while Lipton (-15.22%) and Milo (-7.79%) saw the largest decline in prices. Overall, most of the decline was as a result of price discounts in the ongoing Ramadan festival.

Prices in the oil & gas sector expanded 1.72% MoM with prices of lubricants (+2.47%) accounting for the increase. Elsewhere, the price of cooking gas was relatively flat over the month.

The cement sector witnessed an increase in prices by 2.21% MoM. On volumes, retailers noted higher sales volume compared to the previous month.

Source: Analysts from ARM Securities Limited.