Price of a Bag of Rice declines by 14% to N15,000

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Oil recovered this week to $52pb from last week’s low of $47pb. This was driven by the renewed confidence from Saudi Arabia and Russia to extend the output curb to March 2018.

On the domestic front, headline inflation sustained a downward trend albeit a marginally to 17.24% in April from 17.26% in March. Food inflation however increased to 19.30% from 18.44% as the planting season intensifies. The good news is that the price of a bag of rice declined by 14% to N15, 000.

The attached report summarizes the commodity price movements for this week.

Burning Economic Issues

  • Oil prices spike to $52pb – Saudi & Russia prefer production cut extension
    · National grid generation up by 3.59% to 3948MWh/h
    ·        GE plans 2000MW hydroelectric power in Nigeria
    ·        Diesel down 15% to N170/ltr
    ·        Headline inflation data to be released this morning
    ·        Naira appreciates by 1.04% to N386/$
    ·        Aero plus Arik may be national carrier
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Economic News

The Good
·        Oil up by 2.44% to $52pb, revenue positive for Nigeria
·        Rice price down 14% to N15,000

Power Generation analysis & Impact

May 14th: On grid power output was 3948MWh/hour (up 137MWh/h)
·        Total Power constraints: 1744MW due to gas, line and water constraints
·        Estimated loss: N1.143bn (annualised at N411.48bn /$1.03bn)
·        Improved supply of gas to plants is leading to increased generation, however line constraints at Afam VI persist
·        Diesel down 15% to N170/ltr

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Price of a Bag of Rice declines by 14% to N15,000 - Brand Spur

Domestic Commodity Prices Movement

Price of a Bag of Rice declines by 14% to N15,000 - Brand Spur

Price of a Bag of Rice declines by 14% to N15,000 - Brand Spur

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Stock Market
Price of a Bag of Rice declines by 14% to N15,000 - Brand Spur

Oil prices

  • Brent crude 2.44% to $52.01pb
    · Saudi Arabia and Russia agree to extend output curb to March 2018
    ·       Terms of the existing deal to remain the same according to the Saudi energy minister

Oil markets today 

Price of a Bag of Rice declines by 14% to N15,000 - Brand Spur

Price of a Bag of Rice declines by 14% to N15,000 - Brand Spur

Outlook – oil prices

  • Experts expect global glut to be eliminated by the end of 2017 due to output curb extension – WSJ
    · Production cuts will be countered by rising production levels in Brazil, Canada and US
    · US rig count has increased for 17 consecutive weeks
    · US shale still pose as a risk to stable prices
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Outlook – agric prices

Grains 
·        Growing supplies from the Black Sea Region will weigh on prices

Soft

Sugar
·        Global sugar exports to exceed demand and thus weigh on prices

Cocoa
·        Supplies from Ghana to offset shortfalls from Ivory Coast

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