Domestic Commodity Prices Oblivious to a Falling Naira

Friday, December 9, 2016 10:24 AM /fdc 

With OPEC in consensus and the dollar strengthening, Nigeria’s oil revenue remains mainly positive.
 

However, domestic commodity prices were oblivious to a falling naira and stayed flat.
 

In all of this, Christmas price hikes are yet to materialise.

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

Burning Economic Issues 

• President to present budget on Wednesday

• Oil price slides to $53.02pb

• Bankers committee retreat to hold in Lagos

• 2019 is year of self-sufficiency in wheat in Nigeria

• Naira trading flat in forex market at N485/$

• Diesel price up 2.5% to N205/ltr  

Domestic Commodity Prices 

• Domestic price level stagnant

• Consumers tussling with groaning retailers

• Value brands growing share

• Premium brands hemorrhaging

Stock Market 

• NSE ASI 0.01% (25,673.80pts)

•November weakness, December mild rally

• Market recovers slightly amidst losses in FMCG industry

Oil Markets Today

Oil Prices Rally  

• Brent crude 3.49% to $53.02pb

• 11.31% higher than November’s average of $47.02pb

• Non-OPEC members to meet on Saturday to agree on 600,000bpd cut

• Markets are sceptic as production is at record high

• Consensus is that the cut is likely to be insufficient to clamp down on global glut

Outlook – Oil Prices  

• Very likely that non-OPEC members will agree to a cut

• Therefore, prices to trade in $55-$57pb range

• Downside risk:

• Some countries may want exemptions to capture gains from improved price environment

• Putting a ceiling on price increase or

• Facilitating a bearish market   

Outlook – Agric Prices 

Grains

• Reduction in US wheat acreage in 2017/2018 season to support prices

• US growers attempting to take advantage of high corn prices to increase sales  

Soft  

Sugar

• Sugar prices to trade sideways on anticipation of good supplies  

Cocoa

• Ivory Coast CCC* to withhold forward cocoa sales for 2017/18 crop to stabilize prices

Related News

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

2.      Retailers Brace up for a Bleak Christmas

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

4.      Oil Price Slips on OPEC Deal Concerns; Price of a Bag of Rice is Tapering

5.      Rise in Crude Oil Price to Boost Nigeria’s Revenue by 8.7%

6.      Commodity Prices Remain Relatively Unchanged

7.      Domestic Commodity Prices Tick Upwards In Spite of Expected Harvests

8.     Naira Depreciates to N407/$ in the Parallel Market; Impact on Imported Commodities to be Felt in Sep

9.      Consumers Are Resisting Price Increases in the Retail Market - FDC

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

11.   Receding Weather Shocks Hand baton to Fundamentals

12.  Domestic Commodity Prices Remain Fairly Stable

13.  Potash Price Surge Could Lead To Higher Food Costs For Billions

14.  Domestic Commodity Prices Declining in the Last 24hours - FDC

15.   Uranium Prices Set To Double By 2018