- Dangote Blames Closure of Tomato Plant on Influx of Foreign Products
The Vice President of the Dangote Group of Company, Sani Dangote has said stiff competition from about 30 industries that import tomato paste from China caused its Tomato Manufacturing plant in Kano to shut down.
He explained that despite actions taken by the Central Bank of Nigeria (CBN) to stop selling of forex to importers of tomato paste, the importation of the product is still far cheaper than local production, explaining that China has drop the price of the commodity by 50 percent so as to be able to meet Nigerian demand.
He said: “The problem is that there is still a lot of import coming. Even though Central Bank said its not giving any importer dollars to import tomato paste, other countries like China have dropped their prices by 50%, to ensure that even though there is devaluation in Naira, they will be able to sell to those who want to buy through the parallel market.
“With Nigerian government dropping duty to as low at 5%, and China dropping their price to less then 50%, it means that you can even buy dollar at N500 and import tomatoes paste and sell. And if you check the price they are selling, they are selling 70gram at almost N50 naira. By the time you multiply this value they are selling over $2300 per tonne when they are buying it less than $700.
“So the margin is huge. Unless government does something, there is no way we can pay a local farmer who has no capacity compared to Chinese farmers. A farmer here gets only about 12 tonnes per hectare; the Chinese farmer gets over a 100 tonnes supported by government and other supports”.
Dangote disclosed that some companies have opened factories in Ghana, in the free zone under the disguise of ECOWAS and bring retail packs directly into the country, stating that the Federal Ministries Finance, Industry Agriculture, National Planning are aware of some of these challenges unfortunately noting is yet to be done.
He lamented that with farmers starting planting, government is yet to put in place policy that would guide the tomato value chain, maintaining that the situation does not encourage industries to embark on backward integration.
He urged President Buhari to put in place the necessary policies towards enforcing total ban of importation and ensure the companies that are into retail packaging begin to buy from local producers for them to package and sell.
He added: “The hope is that let the president take the initiative if the ministries have failed to take the initiative. If it gets to the president, am sure he won’t want to see his vision diminished by some bureaucratic process.
“But it’s very unfortunate because thousands of farmers will continue to suffer because of companies that are bent on importing to Nigerian market. Nigeria is a big market for any tomatoes exporter so they will do everything possible to see that tomatoes keep coming to Nigeria unless our government takes the bold step to do the right thing.”
A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site
Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site
Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.
Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.
A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.
One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.
However, Saudi authorities are yet to confirm or respond to the story.
Brent Crude Oil Approaches $70 Per Barrel on Friday
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.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
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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