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‘Grain Shortage Looms Nationwide Amid Export of Surplus Harvest’

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  • Grain Shortage Looms Nationwide Amid Export of Surplus Harvest

The Presidency has warned that Nigeria, currently Africa’s largest producer of cereals and grains risked famine from early next year, following a huge demand in the global market that is targeting the country’s surplus production.

Giving the grim forecast in a radio interview in Kano on Monday, a spokesman of the President, Mallam Garba Shehu, said the “huge demand for our grains in the global market is creating an excellent environment for the mindless export of Nigerian grains across our borders and unless this curtailed, Nigerian markets will be bereft of food by January next year.”

Shehu in a statement made available to State House correspondents in Abuja, on Monday said the Ministry of Agriculture has advised the President on the need to draw the attention of all Nigerians to this issue which, if not addressed promptly, could lead to a shortage of grains in the country by January.

“Over the past year, Providence has blessed Nigeria with a bountiful harvest of grains, more than enough to feed the country and to export to other countries. At present, there is a high demand for grains from Nigeria, from African countries as distant as Libya and Algeria, and from places as far away as Brazil. However, the ministry of agriculture has raised concerns about a massive rate of exportation, which could lead to a shortage of grains in Nigeria by January,” Garba said.

He explained that Nigeria currently enjoys a free market situation “President Muhammadu Buhari is not in any way opposed to or intend on tampering with that. On the other hand, exporters also have a moral obligation to make their produce available to Nigerians who live within our country’s borders, to ensure that our citizens have access to food.”

The President’s Senior Special Assistant on Media and Publicity informed that the Ministry of Agriculture estimates that no fewer than 500 trucks laden with grains leave the Nigerian markets every week, headed for other countries. The major markets involved in this exportation are: the Dawanau market in Kano, Naigatari in Jigawa, Bama in Borno, and Ilela in Sokoto, as well as three other main markets in Kebbi State.

He further explained that President Buhari has on various occasions reiterated his plan for Nigeria to become a food-producing giant, self-sufficient to the point of depending very little on imported food. “This noble plan could easily be defeated by the pull of the foreign market if food continues to leave our shores to feed people elsewhere. If care is not taken, Nigeria could face a famine by January,” he stressed.

“Building our country into the edifice we envision it to be will require sacrifice and strategy from every single Nigerian. Let us remember that charity begins at home,” said in the programme.

‎On what the government is doing to avert the frightening situation, the Presidential Spokesman said that President Buhari has asked the Ministry of Agriculture to present a quick plan for the purchase of surplus grains to be stored in warehouses across the country to save for the rainy day, but opined that there were a need for moral pressure on exporters by traditional and religious authorities to curtail the depletion of the home market.

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

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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