Militants Disrupt a Potential 400,000bpd from Forcados Export terminal; Food Prices Remain Flat


Friday, November 04, 2016 1:53 PM / fdc

Days after Forcados pipeline was restored, the militants struck again disrupting a potential 400,000bpd from Forcados export terminal. However, the bullish impact on prices was short-lived.

Domestic staple food prices have remained relatively flat but still sticky downwards, in spite of the harvest season.

In the interim, consumers are gradually stocking up for the upcoming festive season, which could push prices upwards. The inflation data is due to be released on November 17. 2016

The attached/below report summarizes the commodity price movements for this week.

Burning Economic Issues

• Niger Delta militants attack NNPC oil hub

• Domestic airlines request for $50mn allotment from CBN special FX program

• CBN spends N23bn in promoting local production of rice and other staple foods

• Senate rejects Buhari’s $30bn infrastructure project borrowing plan

• Erisco foods exits Nigerian market due to forex scarcity

• Naira depreciates by 1.06% to N470 – Parallel market

Domestic Commodity Prices

• Food prices remain unchanged

• Forex scarcity continues to be a major driver

• Uptick in prices can be linked to panic buying

• Prices to increase further as the festive season approaches

Stock Market

•NSE ASI down by 0.11% (27,223.08pts)

•Unimpressive Q3 corporate earning results weighed on market sentiment

Oil prices below $50

• Brent crude 2.66% to $46.86pb

• WTI 2.85 % to $45.34pb

• Oil prices down for 3 straight sessions

• Dimming prospects of OPEC production cut weighed on prices

• U.S crude inventories grew sharply by 14.4mb – EIA

• Biggest weekly build since 1982

• OPEC production likely to set record high at 33.82mbpd in October

Outlook – oil prices

• The OPEC meeting in Vienna will determine prices in the medium term

• Swelling inventories and supply glut will keep a lid on prices

Outlook – agric prices


• Rising inventory levels will suppress prices in the medium term



• Market slowly responding to possible surplus in 2018


• We expect cocoa futures to trade slightly lower due to prospects of improved output in Ivory Coast

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