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Domestic Commodity Prices Remained Flat Despite August Break, Harvest Season & Improved Logistics

Proshare

Tuesday, August 22, 2017 / 6:14 PM /FDC

The naira has weakened in the parallel market to N370/$ despite sustained forex injection by the CBN of $559m in the last week. This is because of growing aggregate demand for forex due to school fees, summer holidays and hajj travel.

Domestic commodity prices have remained flat despite the August break, harvest season and improved logistics.


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


Burning Economic Issues
·        Naira remains weak at N370/$

·        CBN sustains supply in forex market - $464m

·        Stock market loses 3.43% (N650bn) last week & 0.91% on Monday

·        42trn e-payment transactions in 6months

·        On-grid power output down 184mw

·        Shortfall between invoiced and paid amount between NBET & Discos (N28.2bn)

·        Oil price up marginally to $52pb

·        Nigeria’s oil production in July up at 1.75mbpd  

Economic News 

The Good  
·        Diesel price flat at N160/ltr

·        President likely to fast track PIB and other initiatives


The Bad

·        Naira weakness continues in spite of forex supply

·        Food prices flat despite August break  

Power Generation analysis & Impact  
August 21st : Average power output was 3,442MWh/hour (down 184MWh/h)

·        Gas constraint was 550MW; frequency management constraint due to loss of DisCo feeders was 3241MW

·        Estimated loss: N1,819bn (annualised at N663.9bn /$1.65bn)

·        NBET- Discos received 91.68% of energy generated with a shortfall of N28.2bn in payment in May

·        Top payments- from Abuja, Ikeja, Ibadan and Yola discos

·        Bottom payments – Kano, Kaduna and Jos




Domestic Commodity Prices Movement 






 Stock Market 
·        NSE ASI 0.91% to 36,584.44pts

·        Consumer goods sub index 0.73% to 959.15pts
 



Oil prices
·        Brent crude 0.66% to $52pb

·        Oil price trades above $52pb on the closure of the second largest refinery in the US, Texas refinery

·        U.S. crude stock piles are still high despite fall in rig count by 5 to 763 rigs

·        Global supply glut remains a threat to prices


Oil markets today  





Outlook – Oil Prices    

·        US shale output expected to decline as energy firms reduce drilling

·        Oil price to remain slightly above $52pb


Outlook – Agric Prices 

Grains   

·        Expectations of favorable weather forecast to put pressure on prices

Soft

Sugar
 

·        Prices to trade bearish as supply glut persists
 

Cocoa  

·        Growing supplies continue to decrease prices
 

Related News

1.       US Shale Production to Climb to 6.14mbpd
2.      Bonny Light Slipped to $50.26pb Following Slowdown in Chinese Refining
3.      Brent Crude Now Trading Above July 2017 Average
4.      Domestic Commodity Prices Remain Static In Spite of MPC Hold Decision
5.      Price of Rice Still High at N18,500 per bag
6.      Threat To Agric Policy Emerge as AFEX Warehouse in Kaduna Invaded by The Police (1)
7.      Staple Food Prices Remain High Due to Shortages Arising From Heavy Rains
8.      Commodity Retailers Leave Retail Prices Unchanged
9.      Oil Prices Took a Hit as Naira Converged Below N400 to a Dollar
10.   Retail Commodity Prices Remained Relatively Unchanged as Manufacturers Capitalize on Margins
11.    The Impact of CBN's Intervention on Commodity Prices Not Yet Seen
12.   The Impact of Global and Domestic Developments on the Commodity Markets
13.   Naira Recovers by 5 percent in 2 days to N495 to 1$; Oil Trades at $57pb
14.   Are The Economic Realities of 2016 to Persist in 2017?
15.   Increasing Consumer Resistance and Declining Income Is Taking Its Toll on Retail Prices
16.   Consumer Effective Demand Negatively Affected By Festive Spending
17.   Domestic Commodity Prices Have Reached Their Peak
18.   Prices of Christmas Sensitive Staple Foods Remain Sticky Downwards
19.   Domestic Commodity Prices Oblivious to a Falling Naira
20.  Domestic Food Prices May Have Reached a Plateau as Consumer Resistance Bites Harder

 

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