Burning Economic Issuesfdcng.com/wp-content/uploads/2018/12/Commodities-Update-December-11... ·...
Transcript of Burning Economic Issuesfdcng.com/wp-content/uploads/2018/12/Commodities-Update-December-11... ·...
Burning Economic Issues
• Nigeria’s trade balance falls sharply by 71% to $1.86bn in Q3
• CBN adds fertilizer to 41 items banned from forex
• Q3 GDP expands by 0.31% (year-on-year) to 1.81%
• Oil marketers give FGN 5-day warning to pay subsidy backlog
• External reserves up by 1.4% since November ($42.6bn)
Impact
• Agriculture growth of 1.91% is below
the average of the last 3 quarters
• External reserves level continues its
creep up
• Benefitting from Eurobond proceeds
• Imports spikes by 98% to $11.46bn
in Q3
• Brent now below $60pb ($59.92pb)
The GoodiesThe Downers
Power Sector
December 9th
• Average power output: 4,015MW/h (down by 207.87MW/h)
• Water constraint stood at 190MW while grid constraint was at 384.5MW. No
gas constraint
• Naira equivalent of power loss: N0.276billion (annualized at N100.74billion)
State Temperature
Abuja 280C
Kano 210C
Lagos 280C
Domestic Commodities Price Movement
Commodities Current Prices
PreviousMonth Prices
Directional Change
1-Year Low 1-Year High
Palm Oil (25l) N10, 000 N10,000 N6,000 N25,000
Semovita (10kg) N2,800 N2,850 N1,800 N3,500
New Yam (medium size) N400 N400 N400 N1,900
Sugar (50kg) N14,900 N14,900 N8,000 N20,000
Relatively Elastic Goods
Domestic Commodities Price Movement
Commodities Current Prices
PreviousMonth Prices
Directional Change
1-Year Low 1-Year High
Garri (50kg) Yellow N6,500 N6,500 N7,000 N16,000
Rice (50kg) N16,000 N15,500 N13,000 N22,000
Flour (50kg) N11,000 N11,000 N8,500 N11,100
Beans (Oloyin)(50kg) N26,500 N26,000 N12,000 N34,000
Cement (50kg) N2,600 N2,550 N1,400 N2,700
Tomatoes (50kg) N8,000 N12,000 N8,000 N20,000
Pepper (bag) N8,000 N13,000 N8,000 N15,000
Relatively Inelastic Goods
Street price
N120
N260
N350
Goods
Bread Loaf
Pepsi (50cl)
Beer (60cl)
Indomie (1 carton)
Supermarket price
N100
N300
N400
N2,100
% difference
20%
-15.5%
-12.5%
-15.30%
Domestic food prices remain flat
Gala (big size) N100 N100 0%
N1,900
Consumer Goods – Current price
Commodity in Focus - Okro
•Planting/harvesting lag: Approximately 2-2½ months
•Total global production: Estimated at 8.9mn tonnes ($10.68bn)
•World’s top producers: India, Nigeria, Sudan
•World’s top consumers: India, Nigeria
•Uses: okro soup, thickening agent in other soups, okra juice, traditional medicine
•Joint demand (ugu & okro, eba & okro)
Source: FAOSTAT, FDC Think Tank
Okro Production in Nigeria
•Output: Estimated at 1.98mn tonnes ($2.38bn)
•22.25% of total global production
•Production rank: Global-2nd, SSA-1st
•Potential output: Approximately 5mn tonnes
•Widely planted in Nigerian compounds for subsistence consumption
•Producing states- Osun, Oyo, Anambra, Ebonyi
•Mainly used by households and restaurants
Source: FAOSTAT, FDC Think Tank
Stock Market
SharePrices
(N)
Daily % Change(December 7th -
10th)
YTD (% Change)
Nestle 1,485 4.13 4.56
Honeywell 1.10 4.35 47.62
Flour Mills 20.00 0.99 31.03
Cadbury 9.45 - 39.69
NB 78.00 2.50 42.18
Dangote Sugar
13.50 - 32.5
Unilever 38.90 - 5.12
•NSE ASI 0.82% to 30,614.73 on December 10th
•Consumer goods sub index 2.32% to 722.54pts
Oil Prices
• Brent crude down by 0.08% to $59.92pb
• Following OPEC’s decision to cut global supply by 1.2mbpd
• However, outlook for prices remains weak amidst slowdown concerns
BRENT
WTI
NATURAL GAS
COMMODITY
0.08%
1.62%
0.09%
DAILY CHANGEDecember 10th– 11th
10.39%
15.57%
53.90%
YTDCURRENT
PRICE
$59.92pb
$51.01pb
$4.54MBtu
Oil Markets Today
GraphicDesign
Wheat Corn Cocoa Sugar
• Cocoa prices decreased by 0.58% to $2,212/MT
• Despite strong demand from Asia.
• Sugar prices decreased by 0.54% to 0.1280/pound
• Increase in global sugar supply.
• Corn prices declined by 0.52% to $3.84/bushel
• Driven by abundant supply from Black sea region.
•Wheat prices down 0.75% to $5.27/bushel
• Amid renewed trade tensions between the US and China.
Agricultural Commodities
• Brent is likely to trade at higher prices this week ($62pb-
$65pb)
• Oil markets would continue to react to supply cut
OUTLOOK – Oil Prices
GRAINS
SOFTS Sugar
• Increased supply of sugar would keep prices low in the near
term
Cocoa
• Reduced cocoa output from Nigeria will push prices up
OUTLOOK – Agricultural Prices
• Doubts over export demand for EU wheat could push global
price of wheat down