- 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.
Oil Rises as Threat of Immediate Iran Supply Recedes
Oil prices rose on Tuesday, with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks dragging on over the United States rejoining a nuclear agreement with Tehran.
Indirect discussions between the United States and Iran, along with other parties to the 2015 deal on Tehran’s nuclear program, resumed on Saturday in Vienna and were described as “intense” by the European Union.
A U.S. return to the deal would pave the way for the lifting of sanctions on Iran that would allow the OPEC member to resume exports of crude.
It is “looking increasingly unlikely that we will see the U.S. rejoin the Iranian nuclear deal before the Iranian Presidential Elections later this week,” ING Economics said in a note.
Other members of the Organization of Petroleum Exporting Countries (OPEC) along with major producers including Russia — a group known as OPEC+ — have been withholding output to support prices amid the pandemic.
“Additional supply from OPEC+ will be needed over the second half of this year, with demand expected to continue its recovery,” ING said.
To meet rising demand, U.S. drillers are also increasing output.
U.S. crude production from seven major shale formations is forecast to rise by about 38,000 barrels per day (bpd) in July to around 7.8 million bpd, the highest since November, the U.S. Energy Information Administration said in its monthly outlook.
Oil Prices Rise as Demand Improves, Supplies Tighten
Oil prices rose on Monday, hitting their highest levels in more than two years supported by economic recovery and the prospect of fuel demand growth as vaccination campaigns in developed countries accelerate.
Brent was up 53 cents, or 0.7%, at $73.22 a barrel by 1050 GMT, its highest since May 2019.
U.S. West Texas Intermediate gained 44 cents, or 0.6%, to $71.35 a barrel, its highest since October 2018.
“The two leading crude markers are trading at (almost) two-and-a-half-year highs amid a potent bullish cocktail of demand optimism and OPEC+ supply cuts,” said Stephen Brennock of oil broker PVM.
“This backdrop of strengthening oil fundamentals have helped underpin heightened levels of trading activity.”
Motor vehicle traffic is returning to pre-pandemic levels in North America and much of Europe, and more planes are in the air as anti-coronavirus lockdowns and other restrictions are being eased, driving three weeks of increases for the oil benchmarks.
The mood was also buoyed by the G7 summit where the world’s wealthiest Western countries sought to project an image of cooperation on key issues such as recovery from the COVID-19 pandemic and the donation of 1 billion vaccine doses to poor nations.
“If the inoculation of the global population accelerates further, that could mean an even faster return of the demand that is still missing to meet pre-Covid levels,” said Rystad Energy analyst Louise Dickson.
The International Energy Agency (IEA) said on Friday that it expected global demand to return to pre-pandemic levels at the end of 2022, more quickly than previously anticipated.
IEA urged the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, to increase output to meet the rising demand.
The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020, maintaining strong compliance with agreed targets in May.
On the supply side, heavy maintenance seasons in Canada and the North Sea also helped prices stay high, Dickson said.
U.S. oil rigs in operation rose by six to 365, the highest since April 2020, energy services company Baker Hughes Co said in its weekly report.
It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.
FG Spends N197.74 Billion on Subsidy in Q1 2021
The Federal Government has spent a total sum of N197.74 billion on fuel subsidy in the first quarter (Q1) of 2021, according to the Federal Account Allocation Committee (FAAC) report for May.
The report noted that the value of shortfall, the amount the NNPC paid as subsidy, in the March receipts stood at N111.97 billion while N60.40 billion was paid in February.
In the three months ended March, the Federal Government spent N197.74 billion on subsidy.
The increase in subsidy was a result of rising oil prices, Brent crude oil, against which Nigerian oil is priced, rose to $73.13 per barrel on Monday.
The difference in landing price and selling price of a single litre is the subsidy paid by the government.
On May 19, the Nigerian Governors Forum suggested that the Federal Government removed the subsidy completely and pegged the pump price of PMS at N380 per litre.
The governors’ suggestion followed the non-remittance of the NNPC into the April FAAC payments, the money required by most states to meet their expenditure such as salaries and building of infrastructure.
However, experts have said Nigeria is not gaining from the present surge in global oil prices given the huge money spent on subsidy.
Kalu Aja, Abuja-based financial planner and economic expert, said “If Nigeria is importing Premium Motor Spirit and still paying subsidy, then there is no seismic shift.”
“Nigeria needs oil at $130 to meet the deficit. In the short term, however, more dollar cash flow is expected and with depreciated Naira, it will reduce short term deficit.”
Adedayo Bakare, a research analyst, said that the current prices do not really mean much for the country economically.
He said, “The ongoing transition away from fossil fuels and weak oil production from the output cuts by the Organisation of Petroleum Exporting Countries will not make the country benefit much from the rising oil prices.
“Oil production used to be over two million barrels but now around 1.5 million barrels. We need OPEC to relax the output cuts for the naira to gain.”
Presco Plc to Hold Emergency Meeting to Recommend Acquisition of Private Company to Shareholders
Egypt: African Development Bank Approves Loan of €83 Million for Egypt’s Electricity Sector to Spur Economic Recovery from Covid-19
Cornerstone Insurance, Morison, Others Lead Gainers as Stock Market Gains
Business3 weeks ago
End Of The Road For Internet Explorer As Microsoft Pulls The Plug
Cryptocurrency4 weeks ago
National Bank of Egypt Joins Ripple Network for Cross-Border Payments
Cryptocurrency3 weeks ago
Can cryptocurrency survive regulators? Here’s what Ripple CEO says about XRP’s future
News4 weeks ago
Akeredolu Replies Malami, Open Grazing Ban in South Is Irreversible
Telecommunications4 weeks ago
Nigerians To Submit Phone IDs In Three Months says NCC
Ethereum3 weeks ago
Ethereum Closes In on Long-Sought Fix to Cut Energy Use Over 99%
Cryptocurrency3 weeks ago
BankDhofar Launches Mobile Banking Payments from Oman to India with RippleNet
Social Media4 weeks ago
Facebook Africa Launches ‘Made by Africa, Loved by the World’ Ahead of Africa Day