Continuing Slide of the Naira Leading to Higher Prices of Inelastic Commodities


Friday, August 12, 2016 6.09pm/fdc

The continuing slide of the naira coupled with import restrictions is leading to higher prices of more inelastic commodities such as rice. Nigerians have responded by cutting down on luxuries and switching to cheaper alternatives.

The global energy market remains oversupplied as OPEC’s production is still a threat to oil price recovery. Saudi Arabia is ramping up production levels. Nigeria’s production is still hampered by militancy.

The attached/below contents are a snapshot of the commodity world this week.

Domestic Commodity Prices

Domestic Commodities Market
•Domestic commodity prices flat as Nigerians adjust to persistent increase in prices of goods and services

•97% of respondents acknowledged the negative impact of economic realities on wellbeing – NOI polls

•Naira depreciated to N317.50/$ at the interbank while depreciating to an all time low of N351/$ in intraday trading

•Appreciated in the parallel market to N394/$

•CBN to sell to BDCs at a weekly limit of $30,000

Stock Market  

·         Weak performance amongst FMCG stocks


·         Market sentiments driving direction of prices

Oil Prices

·         Brent crude 3.37% to $43.86pb


·         WTI 3.53% to $41.05pb


·         US crude stockpiles and refined product increased by 2.5mb

·         Saudi Arabia’s production rises to record high levels despite supply glut

       Increased to 10.67mbpd in July from 10.31mbpd

Oil Markets Today

•Seasonal demand expected to fade as autumn approaches

•Prices may touch record lows after the season

•Market sceptical about OPEC meeting in late September

•The battle for market share continues to increase supply in the market

•Prolonged period of low oil prices will impair national coffers

• European shortages will continue to provide a support for wheat prices

• US corn production expected to overwhelm demand from livestock and ethanol producers



• Deficit expected to increase to 6 million in 2016/2017 season

• Bullish outlook for cocoa as unsatisfactory output from Ivory Cocoa inflates deficit

Related News
1.       Receding Weather Shocks Hand baton to Fundamentals
2.      Domestic Commodity Prices Remain Fairly Stable
3.      Potash Price Surge Could Lead To Higher Food Costs For Billions
4.      Domestic Commodity Prices Declining in the Last 24hours - FDC
5.      Nigerians are changing eating habits as tomato crisis persists
6.      Staple Food Prices on the Upward Trajectory as Consumer Demands Continues to Slow
7.      Nigeria records modest growth in food and accommodation sector
8.     Food price on the rise – Mile 12, Ikeja and Agege markets raise prices
9.      Domestic Prices Remain Sticky Downwards
10.  Oil Prices Fall by 2.87% as Oil Producers Fail to Reach an Output Agreement
11.   Oil Prices Increase by 20% to $44pb
12.  Commodity Update: Prices Remain Stable
13.  Commodity: Domestic Prices Sticky Downwards

Related News