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

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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 
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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

·        Global weather concerns will determine price movement 



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


Supply demand fundamentals will drive price movement 

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