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

Proshare

Wednesday, October 11, 2017 / 8:45 AM /FDC

Nigeria is the world’s 5th largest palm oil producer accounting for only 2% of production. With 990,000 tonnes, aggregrate supply is far below demand of 1.56million tonnes. 

Oil palm producers and processors are making super normal profits and their share prices are sky rocketing. Domestic price of palm oil has declined by 25% in 12 months to N12,000 (25 ltr) 

In the global markets, Brent oil gained marginally to $56.75 due to OPEC’s bullish stance on tighter market rebalancing in 2018.
 


Burning Economic Issues

·        Oil price up to $56.75pb

·       
Palm oil production up 990,000 tonnes (955,000 tonnes in 2016)

·       
Treasury bill rates slide to 15.49 % (182 day) & 15.72% (364 day)

·       
Naira trades flat at N363/$ and 478/£

·       
Diesel retail price unchanged at N195/ltr
 

Economic News

The Good
·        Palm oil production slightly higher

·       
Producer stock prices up 4.99% to N66.37 (Okomu), 15.25% to N68 (Presco)

·       
Oil prices gain grounds on OPEC’s bullish stance
 

The Bad
·        Exports suffer from Apapa traffic and port congestion

Power Generation analysis & Impact
  
October 8th: Average power output sent was 3486MWh/hour (up 312MWh/h)

·       
Gas constraint was 302.4MW; frequency management constraint due to loss of DisCo feeders was 2169.6MW

·       
Estimated loss: N1.187bn (annualised at N433.25bn /$1.21bn)

·       
DisCo inability to pick load is the largest constraint to improved service delivery at this time

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Domestic Commodity Prices Movement 
Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Stock Market 

·        NSE ASI 0.15% to 36,776.60 pts

·       
Consumer goods sub index 0.09% to 937.74pts

·       
Commodity users stock price fall 

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Oil prices

·        Brent crude 1.72% to $56.75pb

·   
OPEC’s secretary general hints possibility of cartel taking additional measures to rebalance oil market

·       
Saudi Arabia determined to be swing producer

·       
US drilling rigs down 2 to 748

·       
Refining in the Gulf of Mexico resumes after Hurricane Nate scare

·       
Shutting down more than 90% of crude output
 

Oil markets today
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Proshare Nigeria Pvt. Ltd.


Outlook – Oil Prices
    

·        Prices expected to trade sideways

·       
Market awaits US inventory data

·       
Impact of OPEC’s supply curb will be minimal in the short term 


Outlook – Agric Prices
  

Grains 
 
·        Global weather concerns will determine price movement 

Soft

Sugar

·       
Prices will remain soft on expectation of favourable weather in major growing region
 

Cocoa 

·       
Supply demand fundamentals will drive price movement 

Proshare Nigeria Pvt. Ltd.

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