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National Reserves 8,000 Tonnes Can’t Solve Food Crisis — Officials

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  • National Reserves 8,000 Tonnes Can’t Solve Food Crisis

The quantity of food items stored in the 23 national reserves across the country are extremely low and cannot effectively address the rising prices of food in Nigeria, various officials at the Federal Ministry of Agriculture and Rural Development and operators in the sector have said.

According to them, Nigeria’s store houses for food have the capacity to take over one million tonnes of agricultural produce but the reserves currently have only about 8,000 tonnes of food valued at N1.5bn.

On Wednesday, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, stated that the Federal Government was considering opening the nation’s food reserves as part of measures aimed at reducing food prices in Nigeria.

“We shall be looking into our reserves if in the next few days the situation persists, to see what we can bring out to lower the prices because another bumper harvest will be coming up at the end of March,” the minister had said.

But operators in the sector and officials at the FMARD noted that the quantity of food items in the reserves were very low and should be restocked.

When asked if the country had enough food in its reserves to open up in order to address the rising food prices, a senior official at the FMARD, who spoke to our correspondent in confidence on Saturday, said, “No, we don’t have.”

One of the officials added, “It is very low; in fact, extremely very low! And the reserves are low because sometime last year, we distributed about 38,000 tonnes to IDPs (Internally Displaced Persons), and the Poultry Association of Nigeria and we were not able to replenish our stock due to lack of adequate budgetary provision.

“For instance, the budget of 2016 can only give us 3,000 tonnes when we have a capacity of almost about a million tonnes. But the ministry is making an arrangement to get extra funds from the Federal Ministry of Finance to see whether they can give us money so that we can take off what the private grain stock holders have with them now and put in the reserves.”

On the conservative value of foodstuff in the reserves, the official said, “As it is now, we have about 8,000 tonnes and this will give you just about N1.5bn. To fully stock the reserves of about one million tonnes capacity will require trillions of naira, which is why it is not something that only the Federal Government should do.

“I think there has to be a partnership between the federal and state governments or the federal and private sector players through public private partnership.”

Another official at the ministry, however, noted that the government might not commence the distribution of food from the nation’s reserves at the moment, unless there was an extreme situation or scarcity.

The source said, “It has to be extreme, but you know that presently we are expecting dry season harvest from the ongoing dry season farming in many states. Therefore, before the next harvest, the price of food should come down because the produce from the various dry season farms will be coming in at the end of March this year.

“It is important to let Nigerians know what the ministry is facing and how we are tackling the issues despite the very limited resources at our disposal. Also, people should know that there isn’t much in the reserves so that they won’t relax with the hope that government has enough in its store houses, no!”

The official explained that on occasions when food from the reserves were shared, the government usually adopted measures that forestall a hijack of the distribution process by middlemen.

The official said, “It cannot be hijacked by any middleman because we do direct sales to the public or give directly to beneficiaries who are primarily those that need it, so that they won’t have to go to the market. We don’t give it to those who don’t need it.”

According to the source, the quality of different food items in the reserves are good enough, adding that Nigeria has a total of 23 functional store houses.

“We have 23 reserves, comprising of 13 old and 10 new ones, while another 10 are under construction. They are located in almost every state in Nigeria except for Rivers and Enugu, which are the states I can remember for now that don’t have. Other states have food reserves,” the official said.

Confirming the drop in food reserves and measures being put in place to increase the production of agricultural produce, the Project Manager, Micro Reforms for Africa, who doubles as the Abuja Liaison Manager for Fertiliser Producers and Suppliers Association of Nigeria, Mr. Gideon Negedu, told our correspondent that food prices would crash soon once the various industry-wide programmes began to have effect.

Negedu said, “We know there are challenges, particularly with respect to food availability and cost, but I can tell you with all confidence that food prices are going to come down tremendously because the cost of production is going to fall seriously. So as far as production and input is concerned, the price of food will come down.”

When asked to specifically state when Nigerians will start experiencing the crash in food prices, Negedu replied, “Very, very soon. When I mean very soon, I’m saying very, very soon because it’s going to be unprecedented.”

Similarly, the Coordinator, Nigeria Agribusiness Group, Mr. Emmanuel Ijewere, also confirmed that food prices were going to crash and agricultural produce would become available once the regulatory framework on fertiliser production and other initiatives in the industry began to take shape.

“There is a new paradigm going on in Nigeria. We are creating a seamless opportunity for win-win outcomes for private and public sector investments in the agribusiness space. This will not only result in adequate fertiliser, but will make food affordable to many,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Decline for Third Consecutive Day on Weaker Economic Data and Inventory Concerns

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Crude Oil

Oil prices extended their decline for the third consecutive day on Wednesday as concerns over weaker economic data and increasing commercial inventories in the United States weighed on oil outlook.

Brent oil, against which Nigerian oil is priced, dropped by 51 cents to $89.51 per barrel, while U.S. West Texas Intermediate crude oil fell by 41 cents to $84.95 a barrel.

The softening of oil prices this week reflects the impact of economic headwinds on global demand, dampening the gains typically seen from geopolitical tensions.

Market observers are closely monitoring how Israel might respond to Iran’s recent attack, though analysts suggest that this event may not significantly affect Iran’s oil exports.

John Evans, an oil broker at PVM, remarked on the situation, noting that oil prices are readjusting after factoring in a “war premium” and facing setbacks in hopes for interest rate cuts.

The anticipation for interest rate cuts received a blow as top U.S. Federal Reserve officials, including Chair Jerome Powell, refrained from providing guidance on the timing of such cuts. This dashed investors’ expectations for significant reductions in borrowing costs this year.

Similarly, Britain’s slower-than-expected inflation rate in March hinted at a delay in the Bank of England’s rate cut, while inflation across the euro zone suggested a potential rate cut by the European Central Bank in June.

Meanwhile, concerns about U.S. crude inventories persist, with a Reuters poll indicating a rise of about 1.4 million barrels last week. Official data from the Energy Information Administration is awaited, scheduled for release on Wednesday.

Adding to the mix, Tengizchevroil announced plans for maintenance at one of six production trains at the Tengiz oilfield in Kazakhstan in May, further influencing market sentiment.

As the oil market navigates through a landscape of economic indicators and geopolitical events, investors remain vigilant for cues that could dictate future price movements.

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Commodities

Dangote Refinery Cuts Diesel Price to ₦1,000 Amid Economic Boost

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Aliko Dangote - Investors King

Dangote Petroleum Refinery has reduced the price of diesel from ₦1200 to ₦1,000 per litre.

This price adjustment is in response to the demand of oil marketers, who last week clamoured for a lower price.

Just three weeks ago, the refinery had already made waves by lowering the price of diesel to ₦1,200 per litre, a 30% reduction from the previous market price of around ₦1,600 per litre.

Now, with the latest reduction to ₦1,000 per litre, Dangote Refinery is demonstrating its commitment to providing accessible and affordable fuel to consumers across the country.

This move is expected to have far-reaching implications for Nigeria’s economy, particularly in tackling high inflation rates and promoting economic stability.

Aliko Dangote, Africa’s richest man and the owner of the refinery, expressed confidence that the reduction in diesel prices would contribute to a drop in inflation, offering hope for improved economic conditions.

Dangote stated that the Nigerian people have demonstrated patience amidst economic challenges, and he believes that this reduction in diesel prices is a step in the right direction.

He pointed out the aggressive devaluation of the naira, which has significantly impacted the country’s economy, and sees the price reduction as a positive development that will benefit Nigerians.

With this latest move, Dangote Refinery is not only reshaping the fuel market but also reaffirming its commitment to driving positive change and progress in Nigeria.

The reduction in diesel prices is expected to provide relief to consumers, businesses, and various sectors of the economy, paving the way for a brighter and more prosperous future.

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Crude Oil

IEA Cuts 2024 Oil Demand Growth Forecast by 100,000 Barrels per Day

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Crude Oil

The International Energy Agency (IEA) has reduced its forecast for global oil demand growth in 2024 by 100,000 barrels per day (bpd).

The agency cited a sluggish start to the year in developed economies as a key factor contributing to the downward revision.

According to the latest Oil Market Report released by the IEA, global oil consumption has continued to experience a slowdown in growth momentum with first-quarter growth estimated at 1.6 million bpd.

This figure falls short of the IEA’s previous forecast by 120,000 bpd, indicating a more sluggish demand recovery than anticipated.

With much of the post-Covid rebound already realized, the IEA now projects global oil demand to grow by 1.2 million bpd in 2024.

Furthermore, growth is expected to decelerate further to 1.1 million bpd in the following year, reflecting ongoing challenges in the market.

This revision comes just a month after the IEA had raised its outlook for 2024 oil demand growth by 110,000 bpd from its February report.

At that time, the agency had expected demand growth to reach 1.3 million bpd for 2024, indicating a more optimistic outlook compared to the current revision.

The IEA’s latest demand growth estimates diverge significantly from those of the Organization of the Petroleum Exporting Countries (OPEC). While the IEA projects modest growth, OPEC maintains its forecast of robust global oil demand growth of 2.2 million bpd for 2024, consistent with its previous assessment.

However, uncertainties loom over the global oil market, particularly due to geopolitical tensions and supply disruptions.

The IEA has highlighted the impact of drone attacks from Ukraine on Russian refineries, which could potentially disrupt fuel markets globally.

Up to 600,000 bpd of Russia’s refinery capacity could be offline in the second quarter due to these attacks, according to the IEA’s assessment.

Furthermore, unplanned outages in Europe and tepid Chinese activity have contributed to a lowered forecast of global refinery throughputs for 2024.

The IEA now anticipates refinery throughputs to rise by 1 million bpd to 83.3 million bpd, reflecting the challenges facing the refining sector.

The situation has raised concerns among policymakers, with the United States expressing worries over the impact of Ukrainian drone strikes on Russian oil refineries.

There are fears that these attacks could lead to retaliatory measures from Russia and result in higher international oil prices.

As the global oil market navigates through these challenges, stakeholders will closely monitor developments and adjust their strategies accordingly to adapt to the evolving landscape.

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