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Commodity Prices Remain Relatively Unchanged

Proshare

Monday, October 3 2016 10.42am /fdc

With prospects of an oil production cut back, oil prices climbed 9.83% to $49.06pb. Nigeria, which has been experiencing production disruptions, has been exempted from the output curb.

This is excellent news, where the naira had crashed to N490/$ before recovering on news of expected dollar inflows.

Commodity prices remained relatively unchanged as consumers grapple with the reality of lean times. On a positive note, the price of a bag of rice declined to N19,000/50KG  following bountiful harvests in Bauchi state.

The attached slides sum up the events that took place in the domestic and global commodity markets this week.

Burning Economic Issues
• Naira falls to an all time low of N460/$ - Parallel market

• India pledges to invest $5bn in Nigeria

• Forcados and Qua Iboe shipments back on stream

• approx. 600,000bpd expected

• Nigeria to get $1bn loan from African Development Bank (AfDB)

• Nigeria slides three places to 127 in Global Competitiveness ranking

Impact on Commodity Prices
• Staple food prices crash in Bauchi state

• Due to increased farming activities and bumper harvest

• Food prices with import content up, citing weaker naira and lingering forex scarcity

• Diesel price at N180/liter  

Domestic Commodity Prices


Consumer Goods - No Change


Stock Market
•NSE ASI down marginally by 0.04% to close at 28,236.23pts

•Equities market trades sideways as market volatility persists



Oil Markets Today


Oil Prices

• Brent crude 5.92% to $48.69pb

• WTI 5.33% to $47.05pb

• Oil cartel agree in Algiers meeting to cut back production

• New output target lowered to 32.5 – 33mbpd

• Down slightly from August output of 33.2mbpd

• Nigeria, Libya and Iran excluded from output freeze deal

• U.S commercial stockpiles fell by 1.9mb

• Diesel and heating oil also down by 1.9mb

Agric Commodities


Outlook
• Production freeze agreement may have little impact on price as supply glut persist

• Large production volumes are expected from Libya and Nigeria

• Goldman Sachs lowered oil price estimate in Q4’16 to $43pb from $50pb

Grains
• Forecast of record wheat harvests in U.S, Russia, Ukraine and Australia to pressure prices

• Favourable weather and ample harvest in the U.S set bearish tone for corn prices

Soft

SUGAR

• Global sugar market is expected the record another year of supply deficit

COCOA

• Current price decline may be short-lived

• Ghana to miss output target by 7.1% to 0.79mmt

Related News
1.       Domestic Commodity Prices Tick Upwards In Spite of Expected Harvests
2.      Naira Depreciates to N407/$ in the Parallel Market; Impact on Imported Commodities to be Felt in Sep
3.      Consumers Are Resisting Price Increases in the Retail Market - FDC
4.      Continuing Slide of the Naira Leading to Higher Prices of Inelastic Commodities
5.      Receding Weather Shocks Hand baton to Fundamentals
6.      Domestic Commodity Prices Remain Fairly Stable
7.      Potash Price Surge Could Lead To Higher Food Costs For Billions
8.     Domestic Commodity Prices Declining in the Last 24hours - FDC
9.      Uranium Prices Set To Double By 2018
10.  Billionaire Investors Back a Gold Price Rally In 2016

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