Commodities

Drone Strike on Danube Port Escalates Wheat Prices to a 5-Month High, Impeding Vital Ukrainian Grain Exports

Published

1 year ago

July 25, 2023

A devastating drone attack on the Danube port of Reni in Ukraine has sent shockwaves through the global grain market as wheat prices surged to their highest level in five months.

The attack, which occurred on Monday and resulted in the destruction of a crucial grain hangar, comes on the heels of Russia’s termination of a deal that allowed Ukraine to ship its crops across the Black Sea.

The situation has intensified efforts to cripple a vital export route for Ukrainian grain to reach world markets, and experts fear the impact will be felt most acutely in the wheat and corn sectors.

Michael Magdovitz, a senior commodity analyst at Rabobank Group, while explaining the devasting nature of the attack said, “This strike on the Danube is a huge deal.” The disruption to export capacity is expected to have the greatest effect on wheat, followed by corn, and extend beyond Reni, as the Odesa ports have also been targeted by Russian forces.

The attack on Reni is a severe blow to Ukraine’s grain trade, as the port is one of the country’s largest river ports for grain and sits on the Danube, adjacent to Romania.

Local traders had been expanding capacity at Reni in response to Russia’s sea blockade, which aimed to stifle Ukrainian grain exports.

Transporting vegetable oils by truck and train may still be an option, but it is less cost-effective for grains to be exported in this manner, further exacerbating the impact on Ukraine’s grain market, according to Magdovitz.

In the aftermath of the attack, wheat futures surged by as much as 2.6% in Chicago to $7.7725 per bushel, the highest since February 21. Corn for December delivery also saw a rise of up to 0.7%.

The full extent of the attack’s impact on grain exports from Reni remains uncertain, but the strikes undoubtedly increase operational risks for the already vulnerable grain supply chain.

With a vital export route now under threat, the situation warrants close monitoring as the global grain market navigates the complexities of geopolitical tensions and supply disruptions.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Commodities

Cooking Gas Prices Surge Amidst Import Reliance, NIPCO CEO Calls for Local Refinery Support

Published

2 weeks ago

October 15, 2024

Yetunde Olugbenga

Just like the surge in fuel pump prices, the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has increased.

The Managing Director/Chief Executive Officer of the Nigerian Independent Petroleum Company (NIPCO) Plc, Suresh Kumar, has urged the Federal Government to encourage Dangote Refinery and other domestic refineries to produce LPG to help lower the soaring price of cooking gas.

According to experts, the increase in cooking gas prices was due to insufficient local production.

Meanwhile, at the recently concluded National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers 2024, held in Lagos, Kumar revealed that over 60 percent of the cooking gas consumed in Nigeria is imported, which is a major factor behind the price hike.

Kumar acknowledged that support for local refineries would boost cooking gas production and reduce LPG importation.

“There is hope that reliance on imported LPG will decrease, which will positively influence domestic prices. Greater local production will make LPG more affordable since it reduces exposure to foreign exchange fluctuations and international pricing dynamics,” he stated.

Kumar further noted that the Federal Government should provide financial aid by investing in local refineries to accelerate LPG production, meet public demand with adequate supply, and reduce costs.

“We must work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other stakeholders to end gas flaring in the country. Substantial investments are needed to capture and process flared gas to increase domestic supply beyond the current 1.5 million MT to at least 5 million MT annually,” he reiterated.

As of the time of this report, Investors King gathered that in the Osogbo area of Osun State, the price has risen from N1,400 to N1,500. In Ilorin, Kwara State, it is currently being sold for N1,500.

Meanwhile, in Lagos State, the current price is N1,400, compared to the previous price of N1,300.

Commodities

Federal Government Expands Subsidized Rice Program to Lagos, Kano, and Borno

Published

3 weeks ago

October 2, 2024

Bassey Marshall

The Federal Government has announced that Lagos, Kano, and Borno will be the next states that will benefit from its subsidized rice program aimed at addressing economic hardship in the country.

The initiative aims to sell a 50kg bag of rice for ₦40,000.

According to a director at the Federal Ministry of Agriculture and Food Security, plans are already underway to roll out the food subsidy program in these states.

Investors King learned that since the launch of the subsidized rice program in September, only civil servants in Abuja, the Federal Capital Territory (FCT), have benefited from it.

However, the director revealed that the government is ready for the next phase of the program, which will help address growing food insecurity in Nigeria.

The source disclosed that the next phase, set to begin shortly, is part of a broader strategy by President Tinubu’s administration to ensure that no Nigerian goes to bed hungry.

The official also dismissed reports that the sale of subsidized rice has been suspended in Abuja, clarifying that the intervention is still in its early stages.

According to him, while the ministry is actively coordinating with other states, sales are ongoing in Abuja.

“As I speak to you now, we are about to activate sales in Lagos and Kano states, with Borno State also set to be addressed,” the agriculture ministry official stated.

“We’ve barely started; how can we stop? Sales are ongoing, and we are actively engaging with other states,” he added.

Commodities

Osun Government Seals Off Gold Mining Company For Allegedly Evading Tax

Published

4 weeks ago

September 30, 2024

Ugwoke Ogbodo

The Osun State Government said it has sealed up the business premises of Segilola Resources Operating Limited over alleged tax evasion.

A statement by the state Commissioner for Information and Public Enlightenment, Kolapo Alimi, on Monday, said the action followed a court order permitting the state to seal the company for “various flagrant tax violations and failure to disclose fully the employees directly and indirectly involved in its business activities, obstruction of tax processes by failing to provide timely tax information and documents.”

“Segilola Resources Operating Limited is one of the major companies carrying out mining activities and mineral exploration in the State as a subsidiary of Thors Explorations Limited listed on London and Toronto Stock Exchanges.

“After a series of demands, meetings, consultations, and engagements, the company still remained adamant and remorseless in its tax evasion and other violations. The Attorney-General of Osun State approached the court and consequently obtained an Order of the Court to seal up the Company until the due sum calculated from 2019 to 2023 is fully liquidated into the Osun State Government Account.

“The state notes with regret that while some companies make billions of naira in the state, especially in the mining sector, they are not ready to give the state its lawful dues.

“While the issue of shareholding values due to the acquisition of Osun state interest in Tropical Mines is purely commercial, we will continue to hold the company responsible for all its actions,” he said.

Recall that the gold mining company, in a statement by its Country Manager, Austin Menegbo, had denied the allegations by the state government, claiming that it has consistently demonstrated a commitment to being a law-abiding, transparent corporate entity, fulfilling all tax obligations and royalty payments in full and on time.