Markets

Govt’s Plan to Repair Fertiliser Plants Excites Farmers

Published

6 years ago

January 19, 2018

Govt’s Plan to Repair Fertiliser Plants Excites Farmers

THE Federal Government’s plan to repair more abandoned fertiliser blending plants in various parts of the country is making farmers happy.

The Fertiliser Producers and Suppliers Association (FEPSAN) Executive Secretary, Alhaji Ahmed Rabiu Kwa, said that more blending plants had begun production, adding that of the 32 fertiliser blending plants in the country, seven have started production and distribution under the Presidential Fertiliser Initiative (PFI).

He listed some of the blending plants, which have been supplied with raw materials, including phosphate from Morocco and are blending, as the Fertiliser and Chemicals Limited, Kaduna, which produces 300,000 metric tonnes; Al-Yuma Fertiliser Company (300,000 metric tonnes) in Madobi-Kano; Kano Agricultural Supply Company, which supplies 15 trailers daily and Golden Fertiliser based in Lagos.

Funtua blending plant has received materials through the rail.

He noted that fertiliser supply had increased in the last one year compared to previous years.

According to him, national volume increased from 500,000 to one million metric tonnes.

Kwa noted that the PFI saved Nigeria over N200 million in foreign exchange and reduced the price of a 50kg bag from N10,000 to N5,500.

He said with the level of production from the reactivated plants, farmers were getting the products at affordable prices.

The Central Bank of Nigeria (CBN) through the National Sovereign Investment Authority (NSIA) provided the funds for the revival of the industry.

Also, the Nigerian National Petroleum Corporation (NNPC) has signed a Memorandum of Understanding (MoU) with the Moroccan government for the supply of phosphate, expected to lead to the production of 1.3 million tonnes of fertiliser.

Kwa noted that the MoU between the two countries would make the product affordable.

The Nigeria-Morocco fertiliser deal, he added, would help increase local blending capacity to 25 percent of installed capacity and create a 20 million bag market for operators.

For years, the country has relied on imported fertiliser, despite the abundance of the raw materials for producing fertiliser – urea, phosphate, potassium and limestone – in Edo, Sokoto states and other parts of the country.

Last year, the PFI programme started yielding results, with the production of more than 4,000 metric tonnes of local fertiliser.

The Initiative was approved by President Muhammadu Buhari in December 2016 to achieve the local production of one million metric tonnes of blended Nitrogen, Phosphorous and Potassium (NPK) Fertiliser for last year’s wet season farming.

Earlier, Nigeria’s stock of blended fertiliser was shipped into the country as fully-finished products, even though urea and limestone, which constitute about two-thirds of the component of each bag, are available locally.

The PFI’s objective is to procure the four raw materials from Morocco, and Muriate of Potash (MOP) sourced from Europe – and blend these to produce NPK fertiliser at a reduced cost.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, 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 Recover Slightly Amidst Demand Concerns in U.S. and China

Published

1 day ago

December 7, 2023

Investors King

Oil prices showed signs of recovery on Thursday after a recent slump to a six-month low, with Brent crude oil appreciating by 1% to $75.06 a barrel while the U.S. West Texas Intermediate crude oil also rose by 1% to $70.05 a barrel.

However, investor concerns persist over sluggish demand in both the United States and China.

The market’s unease was triggered by data indicating that U.S. oil output remains close to record highs despite falling inventories.

U.S. gasoline stocks rose unexpectedly by 5.4 million barrels to 223.6 million barrels, adding to the apprehension.

China, the world’s largest oil importer, also contributed to market jitters as crude oil imports in November dropped by 9% from the previous year.

High inventory levels, weak economic indicators, and reduced orders from independent refiners were cited as factors weakening demand.

Moody’s recent warnings on credit downgrades for Hong Kong, Macau, Chinese state-owned firms, and banks further fueled concerns about China’s economic stability.

Oil prices have experienced a 10% decline since OPEC+ announced voluntary output cuts of 2.2 million barrels per day for the first quarter of the next year.

In response to falling prices, OPEC+ member Algeria stated that it would consider extending or deepening oil supply cuts.

Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman met to discuss further oil price cooperation, potentially boosting market confidence in the effectiveness of output cuts.

Russia, part of OPEC+, pledged increased transparency regarding fuel refining and exports, addressing concerns about undisclosed fuel shipments.

Crude Oil

Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts

Published

2 days ago

December 6, 2023

Investors King

Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.

Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.

Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.

Despite this effort to tighten supply, market sentiment remains unresponsive.

“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.

Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.

Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.

Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.

Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.

The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.

Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.

Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.

Crude Oil

U.S. Crude Production Hits Another Record, Posing Challenges for OPEC

Published

3 days ago

December 5, 2023

Investors King

U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.

The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.

The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.

Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.

This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.

While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.

The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.

Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.

Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.

This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.

In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.

However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.

Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.

While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.

The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.