Commodity Retailers Leave Retail Prices Unchanged


Wednesday, April 26, 2017/ 9:02 AM /FDC

Oil prices climbed back up to $51.8pb after 6 days of consecutive losses. This psychologically helped the Naira recover to N387 from a low of N390.

At the new window for investment flows and exports, the Naira traded at N374.96/$.

Meanwhile, commodity retailers have maintained a wait & see attitude, leaving retail prices unchanged.

The attached report summarizes the commodity price movements so far this week.  

Burning Economic Issues 

•CBN increases forex intervention -$150m forward sales
•Interbank interest rate increases by 20% as banks pay for US dollar purchases
•Oil price falls to $51.8pb on rising US shale production
•Stock market gained sharply by 2.21% on bargain hunting- Earnings season has begun
•Euro hits a 5-month high
•Wholesale price of diesel flat at N200 per litre 

Economic News

The Good

• NB and Unilever outperform with profits up 9.5% and 54% respectively
• Parallel market rate depreciates to N390/$  


The Bad 

       Domestic commodity prices remain sticky downwards 
       Niger Delta militants threaten to resume attacks
      Export smuggling into the Francophone zone  


Power Generation analysis & Impact

April 23rd: On grid power output was 3968MWh/hour (up 199MWh/h) 

• Total Power constraints: 1,764MW due to gas, line and high frequency
• Estimated loss: N0.847bn (annualised at N304.92bn /$0.79bn)
•Shiroro and Geregu – 1 turbine lost owing to high frequency constraints  
•Delta and Omoku lost a turbine due to mechanical problems

Domestic Commodity Prices Movement

 Stock Market

 Oil prices  

• Brent crude by 0.31% to $51.8pb
• Rising U.S shale production continue to cap gains
• U.S drillers added 5 oil rigs for the 14th consecutive week – total 688
• Expectations that OPEC will extend pledge to curb output should increase oil price in the medium term

Oil markets today

Outlook – Oil Prices

 • Prices to trade positive on short covering  

• Iran’s crude oil exports are set to hit a 14-month low in May  

• Expectation of increasing U.S stock piles to limit gains 

Outlook – Agric Prices 

       Gains expected to be capped by expectations of increased output

        Weather conditions in South America to support price

       Prices will remain under pressure from technical selling

Related News
1.    Oil Prices Took a Hit as Naira Converged Below N400 to a Dollar
2.  Retail Commodity Prices Remained Relatively Unchanged as Manufacturers Capitalize on Margins
3.     The Impact of CBN's Intervention on Commodity Prices Not Yet Seen
4.     The Impact of Global and Domestic Developments on the Commodity Markets
5.     Naira Recovers by 5 percent in 2 days to N495 to 1$; Oil Trades at $57pb
6.     Are The Economic Realities of 2016 to Persist in 2017?
7.     Increasing Consumer Resistance and Declining Income Is Taking Its Toll on Retail Prices
8.    Consumer Effective Demand Negatively Affected By Festive Spending
9.     Domestic Commodity Prices Have Reached Their Peak

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