Culled—–Proshare
August 12, 2016/FDC
The continuing slide of the naira coupled with import restrictions is leading to higher prices of more inelastic commodities such as rice. Nigerians have responded by cutting down on luxuries and switching to cheaper alternatives.
The global energy market remains oversupplied as OPEC’s production is still a threat to oil price recovery. Saudi Arabia is ramping up production levels. Nigeria’s production is still hampered by militancy.
The attached/below contents are a snapshot of the commodity world this week.
- Domestic Commodities Market
•Domestic commodity prices flat as Nigerians adjust to persistent increase in prices of goods and services•97% of respondents acknowledged the negative impact of economic realities on wellbeing – NOI polls•Naira depreciated to N317.50/$ at the interbank while depreciating to an all time low of N351/$ in intraday trading
•Appreciated in the parallel market to N394/$
•CBN to sell to BDCs at a weekly limit of $30,000
Stock Market
Stock Market
- Weak performance amongst FMCG stocks
- Market sentiments driving direction of prices
Oil Prices
- Brent crude 3.37% to $43.86pb
- WTI 3.53% to $41.05pb
- US crude stockpiles and refined product increased by 2.5mb
- Saudi Arabia’s production rises to record high levels despite supply glut
- Increased to 10.67mbpd in July from 10.31mbpd
Outlook
•Seasonal demand expected to fade as autumn approaches
•Prices may touch record lows after the season
•Market sceptical about OPEC meeting in late September
•The battle for market share continues to increase supply in the market
•Prolonged period of low oil prices will impair national coffers
Grains
• European shortages will continue to provide a support for wheat prices
• US corn production expected to overwhelm demand from livestock and ethanol producers
Soft
Sugar
• Deficit expected to increase to 6 million in 2016/2017 season
COCOA
• Bullish outlook for cocoa as unsatisfactory output from Ivory Cocoa inflates deficit
