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Ship Import Dips to N319b on Forex Scarcity

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  • Ship Import Dips to N319b on Forex Scarcity

Importation of vessels to Nigeria has dropped from N774billion ($2.15billion) in the last two years to N319 billion ($885.9million) due to scarcity of foreign exchange (forex).

It was learnt that the Central Bank of Nigeria’s (CBN’s) forex policy has made it difficult to get more vessels into the country from China, United States (U.S.) and South Korea since last year.

Already, the government has reviewed import duties on luxury yachts, boats, tug boats, oil platforms, bulkers and barges from 20 per cent to 70 per cent of the value of the vessels.

Also, it was revealed that lack of forex has made it difficult to import spare parts, which could be used to maintain the old ones rusting on the sea.

Before the forex challenge, the country imported some vessels worth $2.04 billion from the Republic of Korea between 2013 and 2014.

Also, $266.6million worth of vessels were imported from U.S; $405.9million from China; $108million from Netherlands; and $19.45million from Turkey. Also, $28.49million ship were imported France; $14.04million from Indonesia; $12.56million from Romania; $23.4million from Singapore and $17.27million from the United Kingdom.

Investigation revealed that some of the vessels, which were acquired for cabotage, are idle on the Nigerian waters as coastal shipping is now exclusively in the hands of Indians, Greeks and Lebanese.

It was gathered that foreign shipping lines still dominate the country’s coastal trade, while their local counterparts, that acquired loans to purchase vessels had gone bankrupt.

Nigerian Ship Owners Association of Nigeria (NISA) President, Captain Niyi Labinjo, said the Nigerian National Petroleum Corporation (NNPC) had been reluctant to give the Nigerian shipping companies jobs because their ships were too old to safely transport petroleum products to and from larger tankers offshore.

He lamented that some of his ships have been idleas long as nine months without a job.

Labinjo said: “As the sixth largest oil producing and exporting country, with proven crude oil reserves at 37,070 million barrels; and proven natural gas reserves at 5.111 billion cubic metre, coastal shipping is exclusively in the hands of Indians, Greeks and Lebanese. Nigerians are completely out of it.

“Officials of NNPC give many excuses. They say, ‘your ships are leaking’. When it isn’t leaking, they will say, ‘your papers aren’t complete; you don’t have insurance’. When you have everything, ‘your ship is first class, your ship is insured’; they will tell you don’t have enough bollards.”

He stressed that some of the vessels, which could not work in Europe and Asia, where stiff enforcement of regulation of cabotage trade are found, find their way into Nigeria to do business.

“This can be calculated. Nigerians import about 1.8 billion litres of petroleum products every month and that gives you N5.4 billion every month, so, that is what Nigeria is losing monthly,’’ he added.

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 Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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