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Stop Cashew Smugglers, Traders Urge Govt

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Nigeria to expand Cashew Nut export by 2020
  • Stop Cashew Smugglers, Traders Urge Govt

The National Cashew Association of Nigeria (NCAN) has raised the alarm over the invasion of the cashew nuts business. It urged the Federal Government to stop smugglers of the product for the traders’ sake.

The group said some unscrupulous businessmen had been depriving the country of huge revenue, urging the government to curb the trend.

According to NCAN, smugglers were making cashew nuts business difficult for traders.

Investigation revealed that over 50 per cent of cashew nuts produced in the country were being smuggled through Kwara, Oyo and Ogun states to Benin, Ghana and Mali, from where the nuts are exported to India and Vietnam.

A member of the group, Mr Ajayi Emmanuel, said Benin Republic, Ghana, Gabon and Cote d’Ivoire had become major markets where the crop fetches a premium in the international market for smugglers.

He alleged that the merchants receiving the smuggled commodity were branding Nigerian cashew as their own farm product, saying the illegal trend had weakened the nation’s export.

“Based on the activities of smugglers, the country lacks adequate tonnage of cashew going out through the land borders and because of the illegal trade, Nigeria has been losing huge sums of revenue.There is high concentration of smuggling of the product at the porous borders in Ogun, Oyo and Kwara states.

“The volume of the smuggled product is larger than those passing through the seaports legitimately,” he said.

He noted that this had affected the price structure of the commodity in the country.

He urged the government to intervene and block all the loopholes.

The exporter said the Federal Government should ban the smuggling of the product and asked the NCS and the NIS to enforce the law to create jobs for the youths.

Emmanuel explained that the neighbouring countries were earning the revenue from the product, which is supposed to come to Nigeria.

“The government should rise up and improve on the country’s border control. If there is proper control at the borders, the country would have proper data of the tonnage produced yearly, but right now, it is difficult to know the volume of cashew produced in the country,” he said.

Emmanuel said NCAN had its own taskforce to assist Customs and immigration in enforcing the law.

He recalled that in 2015, the country earned $253 million from 160,000 tonnes and, last year, cashew generated about $280 million to the economy.

Nigeria has capacity to produce 160,000 tonnes of cashew valued at N115.2 billion ($320 million).

Findings revealed that Vietnamese traders are interested Nigerian cashew nuts because they are of the highest quality in the West African.

But, there are indications that the country may only be able to supply more than 40 per cent of the total demand due to low capacity.

The price of the nuts has increased from $1,850 per ton to $2,000 since the beginning of the year.

The nuts are being demanded for the production of anti-bacterial preparations, varnishes, insecticides and car brake pads.

According to Vietnam Cashew Association (VCA), the global output dropped from three million tons to 1.5 million tons.

The association said at the moment, about two-third of the nuts in Vietnam’s cashew industry were imported.

A member of the association, Mr. Nguyen Duc Thanh, said: “The domestic cashew supply was not sufficient for processing needs in the first half of 2017, so the industry had to import from Nigeria and other West African countries.”

He noted that cashew processors were complaining that imported nuts were expensive, while the processed product prices remained unchanged, leading to low profit for them.

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.

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Energy

Egbin Decries N388B NBET Debt, Idle Capacity

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Egbin-Power-Plant - Investors King

Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.

The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.

The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.

The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.

Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.

The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.

Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.

“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.

“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”

He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.

Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.

“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.

“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.

“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”

He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.

He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?

“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”

Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.

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Crude Oil

Oil Rises on U.S. Fuel Drawdowns Despite Surging Coronavirus Cases

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U.S. Crude Oil - Investors King

Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases.

U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $72.13 a barrel, reversing Tuesday’s 0.4% decline.

Brent crude futures rose 34 cents, or 0.5%, to $74.82 a barrel, after shedding 2 cents on Tuesday in the first decline in six days.

Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity.

That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May.

Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks.

“Most energy traders were unfazed by last week’s build, so expectations should be high for the EIA crude oil inventory data to confirm inventories resumed their declining trend,” OANDA analyst Edward Moya said in a research note.

On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23.

“The U.S. is still in peak driving season and everyone is trying to make the most of this summer,” Moya said.

Fuel demand expectations are undented by soaring cases of the highly infectious delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.

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Crude Oil

Oil Price Rises To $74.70 Despite Delta Variant

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Oil prices - Investors King

Oil price inched higher on Tuesday despite the fast spreading COVID-19 Delta variant. Brent crude oil, against which Nigerian oil is priced gained, $0.20 or 0.27 percent to $74.70 per barrel on Tuesday at 12:05 am Nigerian time.

Delta variant is spreading in China, the world’s largest importer of crude oil, forcing crude oil investors to start cutting down on their oil demand projections.

The Delta variant is still spreading and China has started to clamp down on teapots, so their import growth would not be that much,” said Avtar Sandu, a senior commodities manager at Singapore’s Phillips Futures, referring to independent refiners.

Strong U.S. demand and expectations of tight supplies have helped crude oil to recover from a 7 percent slump recorded last Monday to mark their first gains in two to three weeks last week.

Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, to raise production through the rest of the year.

There is seemingly a battle within the energy complex between the prevailing supply deficit engineered by OPEC+ and the threat of the COVID-19 Delta variant in regions with low vaccination rates,” said StoneX analyst Kevin Solomon.

The slow take-up of vaccinations will continue to limit some upside in oil demand in those regions, and there will be intermittent spells in the recovery in the coming months.

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