Staple Food Prices on the Upward Trajectory as Consumer Demands Continues to Slow


Tuesday, May 10, 2016 6:29PM/ FDC

Staple food prices are on the upward trajectory. Consumer demand continues to slow due to the high prices and lower purchasing power.

The recent uptick in Oil price, following a brief fall to $43pb is being driven by supply shortages in major producing regions- Canada and Nigeria. The growing uprising in the Niger Delta is becoming a cause of concern that could impede Nigeria’s oil production.

This commodity update highlights key events and provides a brief analysis of the implications of these price movements and forecasts for the week ahead.

Enjoy your read!

Kindly direct any questions, queries or comments to the undersigned.

Domestic Commodity Prices Stable

Rising food prices persist

•Prices of major staples remain high, up by 50% - 200%

•Consumer demand waning due to unrelenting high prices & lower purchasing power

•Clash between farmers & herdsmen a threat to food production and security

•Diesel price flat at N130/liter

•Average fuel selling price at N137

•Inflation forecast for April: 13.2%

Stock Market

•Positive sentiment driven by signing of the 2016 budget

Oil Price Movement

• Brent crude 3.84% to $43.63pb

• WTI 2.73% to $43.44pb

• Expectations of inventory build up of 1.4mb at Cushing,

• Outweighs oil output disruption caused by Canadian wildfire

• New Saudi Arabia oil minister setting bearish sentiment for oil prices

• Plans to retain market share and increase production capacity

• China’s crude import up 7.6% in April y-o-y

Oil Markets Today

Agric Commodities



•We anticipate prices to trade at current levels in the short-term

•New Saudi oil minister vows to maintain market share & increase production levels

•Production shortfall in the U.S, Latin America, Asia and Africa slowly eroding supply glut

•Policy change unlikely at June OPEC meeting

•Futures may remain relatively stable, pending any changes in weather conditions & supply / demand pattern

Sugar – Brazil expected to have a good start to harvest, may cushion prices temporarily

Cocoa – Prices to trade over $3000/mt in the long term on growing supply deficit in major producing regions – West Africa & South America

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1.       Nigeria records modest growth in food and accommodation sector
2.      Food price on the rise – Mile 12, Ikeja and Agege markets raise prices
3.      Domestic Prices Remain Sticky Downwards
4.      Oil Prices Fall by 2.87% as Oil Producers Fail to Reach an Output Agreement
5.      Oil Prices Increase by 20% to $44pb
6.      Commodity Update: Prices Remain Stable
7.      Commodity: Domestic Prices Sticky Downwards

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