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Food Prices Expected to Crash as Fertiliser Bill Nears Passage

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  • Food Prices Expected to Crash as Fertiliser Bill Nears Passage

Stakeholders in the agriculture sector have commenced the review the fertilizer quality control bill, so as to checkmate adulteration of the farm input and boost food production in the country.

When passed into law, the bill is expected to crash the high food prices as fertiliser is properly deregulated and made readily available to farmers at reasonable prices.

The bill, which has passed second reading in the House of Representative and moved to the Senate, was being reviewed to regulate fertilizer production, supply and usage in the nation, and also ensure that the environment is not polluted with the adulterated farm input.

The project funded by the Alliance for Green Revolution in Africa (AGRA) under the Micro Reforms for African Agribusiness (MIRA) was geared towards regulating the production and the sale of fertilizer.

The Vice President of the Nigerian Agribusiness Group, Emmanuel Ijewere, during a stakeholders’ consultation on the economic impact assessment of Agriculture reforms in the input sector yesterday in Abuja said there will be provision in the bill, fine against producers that engage in fertilizer adulteration.

Also, the fertilizer bill when passed into law would regulate players in the fertilizer procurement, blending and distribution, he said the Fertilizer Supplier Association of Nigeria would be strengthened to protect the interest of small-scale farmers.

The Project Consultant, Prof. Peter Okodua said the expectation was for farmers to get access to the right fertilizer and high yielding seed so as to increase yield per unit area, adding that if farmers benefit by getting access to right fertilizers and seed, the blenders, producers, distributors would also benefit.

He said: “If we do not regulate the way we manufacture and produce the fertilizer, it then becomes a problem so we get substandard and farmers don’t get the right yield and income; also the soil would be degraded further and the chemicals would enter into our water that people drink, causing Cancer among other diseases.”

The university don added that the plan was to remove the bureaucratic act of the government through subsidy control and allow the forces of demand and supply to equal out through proper regulation.

He posited the need to make adulteration of farm input a criminal offence so as to discourage people from engaging in the act.

The Abuja liaison manager for the Fertilizer Producer and Supplier Association (FEPSAN), Idoko Negedu lamented that there is little or no regulation of the fertilizer in the country, adding that farmers are only getting what they see.

He said: “There are a lot of local production of fertilizer that are going on that are unregulated, which bothers on law, the bill is to look into the challenges and find ways of government to regulate the industry. Farmers get a lot of sand in the name of NPK fertilizer, no wonder their yield is not as high as expected.”

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 Dip Amidst Middle East Tensions, Market Reaction Limited

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Oil

Oil prices fell on Monday as market participants reevaluated their risk premiums in the wake of Iran’s weekend attack on Israel, which the Israeli government said caused limited damage.

Brent crude oil, against which Nigerian oil is priced,  dipped by 50 cents, or 0.5%, to $89.95 a barrel while West Texas Intermediate (WTI) oil fell by 52 cents, or 0.6%, to $85.14 a barrel.

The attack, involving over 300 missiles and drones, marked the first assault on Israel from another country in more than three decades. It heightened concerns over a potential broader regional conflict impacting oil traffic through the Middle East.

However, Israel’s Iron Dome defense system intercepted many of the missiles, and the attack resulted in only modest damage and no reported loss of life.

Warren Patterson, head of commodities strategy at ING, noted that the market had largely priced in the potential attack in the days leading up to it. The limited damage and the absence of casualties suggest that Israel’s response may be more measured, which could help stabilize the oil market.

Iran, a major oil producer within OPEC, currently produces over 3 million barrels per day (bpd) of crude oil. The potential risks include stricter enforcement of oil sanctions and the possibility of Israeli targeting of Iran’s energy infrastructure, according to ING.

Nevertheless, OPEC possesses over 5 million bpd of spare production capacity, which could help mitigate any supply disruptions.

Analysts from ANZ Research and Citi Research have suggested that further significant impact on oil prices would require a material disruption to supply, such as constraints on shipping in the Strait of Hormuz. So far, the Israel-Hamas conflict has not had a notable effect on oil supply.

The market remains watchful of Israel’s response to the attack, which could influence the future trajectory of oil prices and broader geopolitical tensions in the region.

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Crude Oil

Nigeria’s Crude Oil Production Falls for Second Consecutive Month, OPEC Reports

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Crude Oil

Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.

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Oil Prices Edge Higher Amidst Fear of Middle East Conflict

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Crude Oil

Amidst growing apprehensions of a potential conflict in the Middle East, oil prices have inched higher as investors anticipate a strike from Iran.

The specter of a showdown between Iran or its proxies and Israel has sent tremors across the oil market as traders brace for possible supply disruptions in the region.

Brent crude oil climbed above the $90 price level following a 1.1% gain on Wednesday while West Texas Intermediate (WTI) hovered near $86.

The anticipation of a strike, believed to be imminent by the United States and its allies, has cast a shadow over market sentiment. Such an escalation would follow Iran’s recent threat to retaliate against Israel for an attack on a diplomatic compound in Syria.

The trajectory of oil prices this year has been heavily influenced by geopolitical tensions and supply dynamics. Geopolitical unrest, coupled with ongoing OPEC+ supply cuts, has propelled oil prices nearly 18% higher since the beginning of the year.

However, this upward momentum is tempered by concerns such as swelling US crude stockpiles, now at their highest since July, and the impact of a hot US inflation print on Federal Reserve rate-cut expectations.

Despite the bullish sentiment prevailing among many of the world’s top traders and Wall Street banks, with some envisioning a return to $100 for the global benchmark, caution lingers.

Macquarie Group has cautioned that Brent could enter a bear market in the second half of the year if geopolitical events fail to materialize into actual supply disruptions.

“The current geopolitical environment continues to provide support to oil prices,” remarked Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. However, he added, “further upside is limited without a fresh catalyst or further escalation in the Middle East.”

The rhetoric from Iran’s Supreme Leader, Ayatollah Ali Khamenei, reaffirming a vow to retaliate against Israel, has only heightened tensions in the region.

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