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FG: Rice Could Sell for N40,000 by December Unless Production Expands

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Rice

The federal government at the weekend warned that unless Nigerians ramp up the production of rice, a major staple in the country, and take advantage of current agricultural policies, the product could sell for as much as N40,000 a bag by December.

The government noted that with over 3.5 million tonnes deficit in the national supply of rice, there was the dire need to put emergency measures in place to curb the rising price of the commodity, disclosing that President Muhammadu Buhari already ordered an unfettered access to his office to discuss the way forward  as part of measures to reverse the trend.

The Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, who spoke during a town hall meeting with farmers and other stakeholders in Bayelsa State, maintained that the $22billion spent annually on the importation of food was adversely affecting the economy, given that the dollars to import the product was no longer available.

The minister, who also visited some privately-owned farms in the state, with a view to partnering them in agricultural production, noted that the situation was even scarier with the recent  projection that by 2050, Nigeria’s population would have increased to 450 million.

“We were told that our population will be 450 million by the year 2050, that is 34 year from now, that is, our population will be three times this number and if we cannot feed ourselves now, how do we feed ourselves in the next 34 years.

“We have to start today, not just in production but on the entirely value food chain. Those growing the crops will only get 20 per cent of the entire food value, but those in other value chains like processing, marketing get the huge part of the value than those who are actually planting the crops.

“For your information, we spend $22 billion a year importing food into Nigeria. We don’t have any more dollars to import. That is why you see the price of rice going higher.  A bag of riwas 12,000 some months ago, but now it’s 26,000 and if we don’t start producing, by December it could be N40,000,” the minister warned.

Lokpobiri disclosed that since rice matures in three months, it was not too late for farmers to take advantage of the scarcity as there still remains a huge market for the product in the Nigerian market.

“The government has four farms in the state in our records. The average land you see in Bayelsa can grow rice, so the colonial masters were not wrong in their assessment when they said Niger Delta could feed not only the Nigerian but also the entire West Africa sub-region.

“Unfortunately, agriculture till today, is not a priority of the Niger Delta as far as the state governments are concerned because of oil,” he lamented.

He said the states in the Niger Delta had yet to give priority to agriculture the way the North-west states such as Kebbi, Jigawa, Kano as well as other states like Lagos, Ebonyi, Anambra, prioritised it, stressing that Anambra State was not owing salaries even without oil.

The minister was at the one-day interactive session with many agric supporting agencies, including the West Africa Agricultural Productivity Programme, WAAPP, which he said brought along about 3,000 disease-resistant stems of cassava and 8,500 improved yam seedling for Bayelsa State  farmers.

He decried the destruction of the region’s resources by militants, noting that agriculture was one sure way of discouraging militancy.

“The only way we can take our people out of militancy is actually through agriculture and this is also an opportunity to tell our people that the most important resources to any man is land and water resources.

“By the time you are blowing up pipelines, you are actually damaging the water resources. Today,  people say it will take 20 years to clean up Ogoni and we are blowing up our pipelines.

“We are the people suffering from our own decision, from our own wrong action. So, the time has come for change from blowing up pipelines as a way of drawing attention  to constructive engagement.

“There is no point for anybody to blow up pipelines, after all, you are killing the fishes in the river, you are doing more damage to our ecosystem. I want to use the opportunity to appeal to our youths to desist from destroying their own resources.

“The water resources around the environment are not even enough, so if you destroy them, you are destroying your own resources,” he said.

In his comments during the session, the President, Ijaw Youth Council Worldwide (IYC), Mr. Udengs Eradiri, said agriculture remained the sure way of taking Nigeria out of the security and economic challenges confronting her.

He said for the government to be able to woo people into agriculture, the farmers should be given adequate incentives, insisting the real farmers, not portfolio farmers, should be empowered with processing and storage facilities to give value to their produces.

“Give the fishermen, for instance, the right incentive. We have a big problem in the Niger Delta.  Agriculture is the sure way to solve the Niger Delta crisis. It is multidimensional.  If the Ministry of Agriculture, with all the stakeholders put their machinery together properly,  we can use it to solve the Niger Delta crisis.

“Young people are ready, it is just that with politics, blackmail and all that, people are discouraged. But we need to put the right machinery in motion.

“Brass fertiliser is very important to us. Government should look at the project and give the final support necessary so that the agric sector will have a lot of fertiliser from the oil and gas.

“And this will create a lot of jobs and these crises will be minimised. Agriculture is where the world is going now. The richest nations in the world are agro-based nations but they use their brains properly with technological inputs to drive the process,” Eradiri argued.

The Chief Executive Officer, Achievers Farms Limited, Dr. Jonathan Omu, said access to capital remained a critical problem confronting farmers in the country.

Omu added that even when the banks gave  loans, they usually gave loans that were  grossly inadequate, saying it was high time they started taking banks that refused to give loans to farmers to court.

Other supporting agencies and institutions whose officials attended the event with the minister, aside WAAPP, were the Bank of Industry (BoI), Bank of Agriculture (BoA), Nigerian Agricultural Insurance Corporation (NAIC) and the Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday

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Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

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opec

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold

Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin

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Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.

 

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