Culled—Proshare
December 9, 2016/FDC
With OPEC in consensus and the dollar strengthening, Nigeria’s oil revenue remains mainly positive.
However, domestic commodity prices were oblivious to a falling naira and stayed flat.
In all of this, Christmas price hikes are yet to materialise.
The below report/content summarizes the commodity price movements for this week.
Burning Economic Issues
- President to present budget on Wednesday
- Oil price slides to $53.02pb
- Bankers committee retreat to hold in Lagos
- 2019 is year of self-sufficiency in wheat in Nigeria
- Naira trading flat in forex market at N485/$
- Diesel price up 2.5% to N205/ltr
Domestic Commodity Prices
- Domestic price level stagnant
- Consumers tussling with groaning retailers
- Value brands growing share
- Premium brands hemorrhaging
Stock Market
- NSE ASI 0.01% (25,673.80pts)
- November weakness, December mild rally
- Market recovers slightly amidst losses in FMCG industry
Oil Markets Today
Oil Prices Rally
- Brent crude 3.49% to $53.02pb
- 11.31% higher than November’s average of $47.02pb
- Non-OPEC members to meet on Saturday to agree on 600,000bpd cut
- Markets are sceptic as production is at record high
- Consensus is that the cut is likely to be insufficient to clamp down on global glut
Outlook – Oil Prices
- Very likely that non-OPEC members will agree to a cut
- Therefore, prices to trade in $55-$57pb range
- Downside risk:
- Some countries may want exemptions to capture gains from improved price environment
- Putting a ceiling on price increase or
- Facilitating a bearish market
Outlook – Agric Prices
Grains
- Reduction in US wheat acreage in 2017/2018 season to support prices
- US growers attempting to take advantage of high corn prices to increase sales
Soft
Sugar
- Sugar prices to trade sideways on anticipation of good supplies
Cocoa
- Ivory Coast CCC* to withhold forward cocoa sales for 2017/18 crop to stabilize prices
