Price of a Bag of Rice Declined by 14%


Wednesday, May 17, 2017 9:45AM /FDC

Oil recovered this week to $52pb from last week’s low of $47pb. This was driven by the renewed confidence from Saudi Arabia and Russia to extend the output curb to March 2018.

On the domestic front, headline inflation sustained a downward trend albeit a marginally to 17.24% in April from 17.26% in March. Food inflation however increased to 19.30% from 18.44% as the planting season intensifies. The good news is that the price of a bag of rice declined by 14% to N15, 000.

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

Burning Economic Issues

·        Oil prices spike to $52pb - Saudi & Russia prefer production cut extension
·        National grid generation up by 3.59% to 3948MWh/h
·        GE plans 2000MW hydroelectric power in Nigeria
·        Diesel down 15% to N170/ltr
·        Headline inflation data to be released this morning
·        Naira appreciates by 1.04% to N386/$
·        Aero plus Arik may be national carrier  

Economic News  

The Good   
·        Oil up by 2.44% to $52pb, revenue positive for Nigeria
·        Rice price down 14% to N15,000   

Power Generation analysis & Impact

May 14th: On grid power output was 3948MWh/hour (up 137MWh/h)
·        Total Power constraints: 1744MW due to gas, line and water constraints
·        Estimated loss: N1.143bn (annualised at N411.48bn /$1.03bn)
·        Improved supply of gas to plants is leading to increased generation, however line constraints at Afam VI persist
·        Diesel down 15% to N170/ltr 


Domestic Commodity Prices Movement




Stock Market

Oil prices

·       Brent crude 2.44% to $52.01pb
·        Saudi Arabia and Russia agree to extend output curb to March 2018
·       Terms of the existing deal to remain the same according to the Saudi energy minister   

Oil markets today   



Outlook – oil prices

·        Experts expect global glut to be eliminated by the end of 2017 due to output curb extension – WSJ
·        Production cuts will be countered by rising production levels in Brazil, Canada and US
·        US rig count has increased for 17 consecutive weeks
·        US shale still pose as a risk to stable prices  
Outlook – agric prices 

·        Growing supplies from the Black Sea Region will weigh on prices  


·        Global sugar exports to exceed demand and thus weigh on prices

·        Supplies from Ghana to offset shortfalls from Ivory Coast  

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2.      Recent Spike in Commodity Prices Confounded Analysts

3.      Retail Prices Remained Stubbornly Static as Naira Strengthened at the New Forex Window

4.      Commodity Retailers Leave Retail Prices Unchanged

5.      Oil Prices Took a Hit as Naira Converged Below N400 to a Dollar

6.      Retail Commodity Prices Remained Relatively Unchanged as Manufacturers Capitalize on Margins

7.      The Impact of CBN's Intervention on Commodity Prices Not Yet Seen

8.     The Impact of Global and Domestic Developments on the Commodity Markets

9.      Naira Recovers by 5 percent in 2 days to N495 to 1$; Oil Trades at $57pb

10.  Are The Economic Realities of 2016 to Persist in 2017?

11.   Increasing Consumer Resistance and Declining Income Is Taking Its Toll on Retail Prices

12.  Consumer Effective Demand Negatively Affected By Festive Spending

13.  Domestic Commodity Prices Have Reached Their Peak

14.  Prices of Christmas Sensitive Staple Foods Remain Sticky Downwards

15.   Domestic Commodity Prices Oblivious to a Falling Naira

16.  Domestic Food Prices May Have Reached a Plateau as Consumer Resistance Bites Harder

17.   Retailers Brace up for a Bleak Christmas

18.  The China Futures Association Signs MoU with Intnl’ Commodities & Derivatives Assn

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