08 March 2019 : Analyst's Urban Retail Price Tracker – the PURP index – recorded a slight uptick of 0.28% MoM to 111.6 pts in February (vs 0.42% MoM in January). On an annual basis, prices were 8% higher relative to same period in the prior year. The brewery and commodity basket took the center stage with prices rising 0.13% MoM and 0.39% MoM respectively. Elsewhere, prices across the consumer, cement and oil & gas retreated over the month.

In the consumer basket, average prices moderated by 0.39% MoM. Analysts noted declines in price of Milo (-6.01%), Lipton (- 13.5%) and Dangote Pasta (-13.0%). Across the pasta products, Dangote Pasta implemented price reversal during the month following a price hike in January. Meanwhile, analysts also saw price of Golden Penny pasta increase 28% placing it at a premium to Dangote Pasta and Honeywell Pasta which are the most demanded pasta. Elsewhere, in a bid to gain market share, analysts observed an increased supply in Tastic Pasta (another product from Dangote but not as popular as the major three). From analyst's findings, Tastic presently sells at a premium to other pasta products with price point at N325.

Prices in the brewery basket were slightly higher by 0.13% MoM. Though prices were flat across most beer products under analyst's coverage, analysts noted an increase in price of Trophy (+1.9% MoM).

Average price in the commodities basket remained elevated but slowed over the month with prices rising by 0.42% MoM (January: 0.57%). Price increase was largely as a result of higher vegetable oil price. Elsewhere, palm oil price moderated 0.4% over the month after weeks of festivity induced price hike.

To determine how retail prices have moved on average, analysts fashioned out a Pentad Urban Retail Price Index (PURP) which adopts April 1st to April 8th as a base period. The PURP index accords 30% weightings apiece to consumer and commodities prices, 20% weighting to the brewery basket with a further 20% distributed evenly between cement and cooking gas prices.

Across the sectors, price evolution is monitored on a weekly basis

while analysts adopt 0.6%, 0.0%, and -0.6% as indicators for volume expansion from prior week, no change in volumes, and week on week output contraction (respectively) in a manner slightly akin to CBN’s PMI methodology.

Prices in the oil & gas sector moderated over February with average prices down by 0.18% MoM largely on the back of lower Cooking Gas price (-1.3% MoM). Analysts believe this is largely due to increased domestic and foreign supply.

Prices in the cement sector eased by 1.0% MoM following an increase in the previous month. On other fronts, activities in the cement sector remained lukewarm as a result of electioneering activities.

Reporting for EasyKobo on Friday , 08 March 2019 in Lagos, Nigeria

Source: ARM Securities Limited

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