Nigeria Produced a Meager 348,000 Tonnes of Cotton in 2016


Wednesday, November 15, 2017 / 8:35 AM /FDC

The 2018 budget expects a boost to non-oil revenue of 87%. One of such activities is the recovery in the production of cotton.


Nigeria produced a meager 348,000 tonnes (1.5% of global output) in 2016 . The new initiatives, including the anchors borrowers programme, is expected to catalyze an otherwise extinct product.


Burning Economic Issues  

·    8 Nigerian banks’ ratings downgraded by Moody’s

·    Global cotton consumption to increase by 2% (2018)

·    Brent crude down to $62.94pb

·    FG pampers Niger Delta – new plans released

·    Retail diesel price down 2.4% to N200/litre

·    Naira trading flat at N363/$ 


Economic News  

The Good  

·  Power output sent from grid above 4,000MWh/hour

The Bad

· Moody’s downgrade will adversely affect banks’ ability to raise capital 


Commodity in Focus – Cotton 

Total global production (2016/2017): 23.07mn tonnes
2017/2018 growth forecasts: Production - 8.5%, Consumption- 2%
Uses: Cottonseed oil, livestock feeding, textiles, fishing nets, coffee filters, tents, bandages
World’s top producers: India, China, U.S, Pakistan and Brazil – 76% of global output

World’s top consumers: China, India, Pakistan, Turkey and Bangladesh

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Power Generation analysis & Impact  

November 10th: Average power output sent was 4,013MWh/hour (up 175.95MWh/h)

·   Gas constraint was 1,256MW; frequency management constraint due to loss of DisCo feeders was 756.8MW, water management constraint was 150MW

·    Estimated loss: N1.038bn (annualised at N378.87bn /$1.05bn)

·    Shiroro Hydro has commenced water management measures to ensure dry season efficiency

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Domestic Commodity Prices Movement   

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 Stock Market 

·   NSE ASI 0.96% to 36,953.41pts

·   Consumer goods sub index 1.30% to 904.21 pts

·    Most commodity dependent corporates declined

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Oil prices

·  Brent crude 0.35% to $62.94pb

·  Market remains supported by forecasts of rising demand

·  Growing tensions in the Middle East kept a cautious tone on trade


Oil markets today

                                                                                                                                                                                                                    Proshare Nigeria Pvt. Ltd.

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Outlook – Oil Prices    

·   Prices likely to remain above $62pb in the near term

·   On rising global demand and tighter supply

·   Strong macro-economic backdrop and inventory drawdown in the U.S.


Outlook – Agric Prices  


·  Bumper U.S harvest to keep prices bearish



· Prices will be determined by supply/demand dynamics



· Lower production forecasts in Ivory Coast will continue to support prices

Related News

1.  Most Food Prices In Nigeria Have Shrugged off The Currency Gains and Remained Relatively Static

2.   Commodity with a 150-Day Lag Could Be a Game Changer for Economic Diversification

3.   Diesel Prices Increased by 20.4% Despite the Improvement in on-grid Power Generation

4.   Domestic Commodity Prices Responding to the Increased Harvest Output

5.    Harvest Season Has Begun; Expected to Increase Supply and Moderate Prices

6.   Price of Cement is up 8% to N2,700 while Brent Slipped to $56.34pb

7.    Domestic Price of Palm Oil Has Declined by 25% in 12 Months

8.   FG to Bring Down the Price of a 50kg Bag of Rice to N9,000 Within a Month

9.    Price of Cement Dropped by 3.8% to N2,500 per Bag

10.  Oil Prices Climbed Sharply to a 2-year High of $59pb

11.   Cashew Nut Exports Increased Significantly by 463% to $37m in Q2’17

12.  Volatile Oil Prices in August

13.  Oil Prices Hovered Around $55pb Ahead of OPEC Meeting

14.  Higher Price of Oil Has More Than Compensated for Any Cocoa Shortfalls

15.   Oil Price Up to $54.16pb Due to Lower OPEC Production



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