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Group Blames Speculators for Rejected 37,000 Tonnes of Cashew

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Nigeria to expand Cashew Nut export by 2020
  • Group Blames Speculators for Rejected 37,000 Tonnes of Cashew

The Federation of Agricultural Commodity Associations of Nigeria has heaped the blame for the rejection of 37,000 tonnes of Nigerian cashew by Vietnamese buyers, on Nigerian and foreign produce merchants, who engage in speculative buying in the Nigerian produce market.

The President, FACAN, Dr Victor Iyama, disclosed this to our correspondent on Thursday.

Iyama said people were in the habit of rushing to the market and just paying any price on produce, no matter how high.

He equally blamed foreigners who come into the Nigerian market and overprice the produce because they wanted to get ahead of the competition.

He said,”It is a lesson for us that we should not just rush into the market and buy at any price we see, and escalate prices in the process.

“The government needs to check the influx of foreigners into the Nigerian produce market. They come in because they have money and the moment they see somebody pricing produce, they go ahead and offer to pay a higher price. Eventually, the produce price becomes very high locally.”

The Deputy Executive Secretary, FACAN, Mr Peter Bakare, had explained that 37,000 tonnes of cashew exported from Nigeria to Vietnam were rejected because of high price of the commodity.

He said that the price volatility was due to the lack of conducive business environment that had made the price of raw cashew from Nigeria to be higher than the price of finished product in the international markets.

He said, “The banks in Vietnam that usually provide the loans to their buyers for purchase complained that the prices of the finished products are less than the price of raw materials.

“The Vietnam financial institutions, therefore, backed out of the business, stressing that it is not a profitable venture for its farmers, so the produce are stuck in Vietnam now,’’ he said.

On what next for the exporters, Iyama responded that the expectation was towards the next cashew season which would be February.

He said, “I am advocating that more of our cashew should be processed and consumed locally. Also, we should sell more of the processed ones instead of raw cashew.”

He pointed out that cashew was not on the terminal market, and so the price was subject to negotiation.

“People can renege on the contract they made with the sellers, giving all kinds of excuse. They can say, for instance, that the shipment came late, especially with the situation we are currently experiencing at the ports.”

On the estimated loss to the operators, Iyama said it could not be determined yet, adding that in the new season, it would be possible to assess what was sold and leftover, as well as the profit and the losses.

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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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Investment

Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies

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Barclays Bank

Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies

Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.

According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.

The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.

It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.

“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”

Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.

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Economy

Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension

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  • Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension

Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.

OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.

In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.

Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.

Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.

While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.

Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.

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Gold Dips by 2 Percent on Better Than Expected Job Report

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  • Gold Dips by 2 Percent on Better Than Expected Job Report

Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.

The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.

The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.

“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.

Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.

Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.

The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.

Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.

Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.

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