Commodity Prices Remain Relatively Unchanged


Monday, October 3 2016 10.42am /fdc

With prospects of an oil production cut back, oil prices climbed 9.83% to $49.06pb. Nigeria, which has been experiencing production disruptions, has been exempted from the output curb.

This is excellent news, where the naira had crashed to N490/$ before recovering on news of expected dollar inflows.

Commodity prices remained relatively unchanged as consumers grapple with the reality of lean times. On a positive note, the price of a bag of rice declined to N19,000/50KG  following bountiful harvests in Bauchi state.

The attached slides sum up the events that took place in the domestic and global commodity markets this week.

Burning Economic Issues
• Naira falls to an all time low of N460/$ - Parallel market

• India pledges to invest $5bn in Nigeria

• Forcados and Qua Iboe shipments back on stream

• approx. 600,000bpd expected

• Nigeria to get $1bn loan from African Development Bank (AfDB)

• Nigeria slides three places to 127 in Global Competitiveness ranking

Impact on Commodity Prices
• Staple food prices crash in Bauchi state

• Due to increased farming activities and bumper harvest

• Food prices with import content up, citing weaker naira and lingering forex scarcity

• Diesel price at N180/liter  

Domestic Commodity Prices

Consumer Goods - No Change

Stock Market
•NSE ASI down marginally by 0.04% to close at 28,236.23pts

•Equities market trades sideways as market volatility persists

Oil Markets Today

Oil Prices

• Brent crude 5.92% to $48.69pb

• WTI 5.33% to $47.05pb

• Oil cartel agree in Algiers meeting to cut back production

• New output target lowered to 32.5 – 33mbpd

• Down slightly from August output of 33.2mbpd

• Nigeria, Libya and Iran excluded from output freeze deal

• U.S commercial stockpiles fell by 1.9mb

• Diesel and heating oil also down by 1.9mb

Agric Commodities

• Production freeze agreement may have little impact on price as supply glut persist

• Large production volumes are expected from Libya and Nigeria

• Goldman Sachs lowered oil price estimate in Q4’16 to $43pb from $50pb

• Forecast of record wheat harvests in U.S, Russia, Ukraine and Australia to pressure prices

• Favourable weather and ample harvest in the U.S set bearish tone for corn prices



• Global sugar market is expected the record another year of supply deficit


• Current price decline may be short-lived

• Ghana to miss output target by 7.1% to 0.79mmt

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4.      Continuing Slide of the Naira Leading to Higher Prices of Inelastic Commodities
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7.      Potash Price Surge Could Lead To Higher Food Costs For Billions
8.     Domestic Commodity Prices Declining in the Last 24hours - FDC
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