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Thursday, December 29, 2016 07:38 PM /FDC
The events of 2016 have rattled the average consumer to say the least and now the question on everyone’s mind is ‘are the economic realities of 2016 to persist in 2017?’
Prices have remained static in the last week of 2016 however; we expect commodity prices to decline as we enter January 2017. This is because consumer effective demand has been negatively affected by festive spending and January school fees.
Producers will have to be long cash and short inventory. Hence, we are likely to see a ‘dumping’ of goods in the market.
The attached report summarizes the commodity price movements for this week
Burning Economic Issues
• Mexico to abandon 80-year price ceiling with a hike in petrol pump price by 14.2%
• Attributed to rising global oil prices
• Oil price average $54.82pb in December
• Diesel price crosses N255/ltr, up 59.09% YTD
• Airline passengers suffer from Harmattan and jet fuel saga
• Naira appreciates by 1.02% to N490/N on holiday lull
Domestic Commodity Prices
• Commodity prices static in the last week of 2016
• Expected to decline in January
• Perishable prices likely to slump faster
• Downside risk: higher energy prices feeding cost push element in prices
Stock Market
• NSE ASI 0.76% (26,688.25 pts)
• Market opens after holidays to bullish sentiment
Oil Prices Surge
• Brent crude 1.74% to $56.12pb
• WTI 1.4% to $53.76pb
• Production cut deadline edges closer – January 1st
• Optimism in the market is currently fuelling bullish trend
• Amidst reports that Iranian oil supply increased by 19% in the first 9 months of 2016 - EIA
• Venezuela vows to cut production in 2017 by 95,000 bpd
Oil Markets Today
Outlook – Oil Prices
• Oil prices to close at a year end rate of $58pb
• This is to be driven by optimism about product cut by OPEC and non-OPEC members
• More countries are expected to volunteer more production draws
• This is due to the effect it has on prices in the short to medium run
Outlook – Agric Prices
Grains
• Drier weather forecast for grain producers is to support price rally
Soft
Sugar
• Harsh weather conditions in Brazil to support prices
Cocoa
• Cocoa prices to trend lower on anticipation of global oversupply
Related News
1. Domestic Commodity Prices Have Reached Their Peak
2. Prices of Christmas Sensitive Staple Foods Remain Sticky Downwards
3. Domestic Commodity Prices Oblivious to a Falling Naira
4. Domestic Food Prices May Have Reached a Plateau as Consumer Resistance Bites Harder
5. Retailers Brace up for a Bleak Christmas
6. Militants Disrupt a Potential 400,000bpd from Forcados Export terminal; Food Prices Remain Flat
7. Oil Price Slips on OPEC Deal Concerns; Price of a Bag of Rice is Tapering
8. Rise in Crude Oil Price to Boost Nigeria’s Revenue by 8.7%
9. Commodity Prices Remain Relatively Unchanged
10. Domestic Commodity Prices Tick Upwards In Spite of Expected Harvests
11. Naira Depreciates to N407/$ in the Parallel Market; Impact on Imported Commodities to be Felt in Sep
12. Consumers Are Resisting Price Increases in the Retail Market - FDC
13. Continuing Slide of the Naira Leading to Higher Prices of Inelastic Commodities
14. Receding Weather Shocks Hand baton to Fundamentals
15. Domestic Commodity Prices Remain Fairly Stable
16. Potash Price Surge Could Lead To Higher Food Costs For Billions
17. Domestic Commodity Prices Declining in the Last 24hours - FDC