- ‘Production Cost Remains High Despite Crash in Food Prices’
Operators in the agricultural sector have complained about the high cost of production even though the prices of products such as palm oil have reportedly crashed.
The Chairman of Comtrade Group, an agro-allied firm, Mr. Abiodun Oladapo, said that the crash in the prices of agricultural products was not to the advantage of farmers since farming inputs and other factors of production such as diesel, animal feed, seed and fertilizers were exorbitant.
Reports had revealed that the price of palm oil went down from N30,000 per 30-litre keg in December 2017 to as low as N8,500 in places like Akure.
The Chairman, Ikeja Shop Owners Association, Mr. John Okonkwo, informed our correspondent that the product sold for between N14,500 and N14,000 in Ikeja.
He said the price of tomatoes also dropped from N12,000 a basket to about N6,500.
Oladapo lamented that the gains from the sector were very minimal compared to the amount of money practitioners invested in it.
According to the National President, Cassava Growers Association of Nigeria, Segun Adewumi, the cost of planting and harvesting cassava, for instance, was higher than the price that was being offered by buyers for the produce.
He said because of this, most farmers had refused to harvest their roots, choosing instead to leave them in the ground to rot.
The President, Nigerian Association of Small and Medium Enterprises Cooperative Multipurpose Society, Mr. Adams Adebayo, pointed out that farmers were exposed to a lot of risks.
He confirmed that the cost of inputs and harvesting was so high that it was difficult for farmers to make enough money to pay back loans that they borrowed from the banks.
Farmers also said they were at a loss and completely vulnerable when natural disasters such as flood and fire strike.
A farmer in Jos, Plateau State, Nandul Durfa, owner of Daje Palm Oil Farm, was reported to have lost 10 hectares of palm oil plantation to fire recently. He lost more than 4,000 palm trees, 4,000 seedlings for planting, 500 cashew trees and 200 mango trees after rat hunters set fire to the bush to smoke out rats, reports from the Lagos Chamber of Commerce and Industry’s agriculture whatsap platform indicated on Wednesday.
Describing the loss as devastating, Durfa was quoted to have said, “I have lost hundreds of millions of naira to the inferno. Palm trees are resilient; if you water the burnt trees consistently, they could come back to life but this year’s proceeds are gone.
“We spend an average of N40,000 every month to treat and maintain the new seedlings. It is difficult to quantify the financial loss and the psychological trauma.”
Adebayo lamented the fact that the Nigerian Agricultural Insurance Corporation did not make provision for farmers or their produce.
He said since the price of the produce was cheaper and purchasing power of consumers had dropped, farmers were not getting anything for their labour, adding that it would be helpful if marketing boards could regulate the prices of farm produce so that farmers would not lose so much.
Brent Crude Oil Approaches $70 Per Barrel on Friday
Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension
Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.
Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.
Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.
While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.
According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.
“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”
Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.
“The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.
“I do believe we’re headed for a much healthier supply and demand environment” she said.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
News3 weeks ago
Doctors Warn Covid Will Become Endemic and People Need to Learn to Live With it
Bitcoin1 week ago
Bitcoin Rebounds To $50,881 Per Coin on Wednesday
Bitcoin3 weeks ago
Bitcoin Surges Above $50,000 Per Coin on Tuesday, Sets a New All-Time High
News2 weeks ago
U.S. COVID-19 Deaths Hit 500,000
Economy3 weeks ago
Petrol Subsidy May Hit N11.2bn Per Week
Economy4 weeks ago
Petrol Landing Cost Rises to N180, Oil Crosses $60
Cryptocurrency4 weeks ago
Why CBN Bans Banks from Facilitating Cryptocurrency Exchanges
Banking Sector2 weeks ago
Banks Turning Female Marketers to Sexual Slaves – Senator