- Rising Transportation Costs Hurt Farmers, Food Processors
Farmers and food producers are raising the alarm that the cost of moving produce is getting higher.
The increase in trucking costs is being blamed on some factors such as unavailability of trucks, bad roads and high fuel costs.
For instance, in Iseyin, Oyo State, a cassava production belt, the cost of moving 30 tons of cassava has moved to N15,000, from N10,000 two years ago.
It was learnt the situation is of major concern for consumers and produce growers.
This has pushed up operating costs for farmers, who would then pass the additional costs to consumers.
Expressing concern, the country coordinator, African Agricultural Technology Foundation (AATF) Cassava Mechanisation and Agro-processing Project (CAMAP), Mr. Ayodele Omowunmi, said farmers in Igunrin Village, Iseyin, are finding it costly to move their cassava to The Allied Atlantic Distilleries Ltd (AADL) at Igbesa in Ogun State where their tubers can be processed to ethanol.
AATF is an international programme working with smallholder and commercial farmers from Ogun, Oyo, Osun, Kwara and Kogi states, to deploy machines to assist them in improving the cassava value chain.
AADL is the first and largest cassava-based ethanol producing plant in Africa. It has an installed capacity of 10 million litres of ethanol per year and requires 240 tons of cassava daily at an average of 10 tons per hour.
He said CAMAP facilitated the partnership between the farmers and the company to ensure steady daily supply of cassava to meet up with the requirement.
He urged the government to assist farmers through the provision of adequate vehicles to transport cassava from the farm to promote the growth of the business.
The Chief Executive, Natural Nutrient Limited, Sola Adeniyi, said rising freight costs as a reason for lower profit margins with more pain as vehicles break and higher diesel prices make it even more expensive to transport farm produce to the market .
Adeniyi said high transportation costs hurt profits, preventing them from taking advantage of lower commodity prices.
According to him, the benefits that should trickle down to the farmers are locked down by high cost of transportation, which eats into their profits.
The National Publicity Secretary, National Cashew Association of Nigeria (NCAN),Anga Sotonye, said most of the agro commodities containers coming into the ports are not attended to in time thereby affecting timely shipments.
According to him, it is one thing to aggregate agro exports for onward movement to the ports, but moving goods through the road to the port is the bigger challenge.
He urged the government to tackle the situation on Apapa port access road, adding that its conditions are an obstacle.
Sotonye complained that the ports have recorded slow turn around times.
He said the road users were fed up with delays that have stretched for several days.
The Group Managing Director, Niji Group, Kola Adeniji, said there are challenges facing food supply chain.
According to him, things are becoming stretched across food supply chain and current logistics thinking is no longer fit for purpose.
He explained that the transport infrastructure that are dilapidating is bringing challenges to food manufacturers and logistics companies.
Meanwhile, the Oyo State Executive Council said it has approved the rehabilitation of the 65km Moniya-Ojutaye-Iseyin Road for the sum N6,952,565,074.97.It said the project is expected to be completed in 18 months.
The Commissioner for Information, Culture and Tourism, Mr. Toye Arulogun, said the 65km road had been awarded to M/S Oladiran Engineering and Trade Nigeria Limited, explaining that the contractor was picked after careful evaluation of both technical and financial responsiveness by the state Consultants on Road Projects under the leadership of Reyog International Nigeria Limited.
He pointed out that 30 per cent of the contract sum will be paid to the contractor as advance payment subject to the provision of an open-ended advance payment guarantee from a reputable bank.
Arulogun maintained that the road will boost both intra and intercity transport links, improve trade, drastically reduce intercity transport connection, encourage trade and investment as well as to generally bring about better socio-economic development to the citizenry.
He noted that this is in line with the Governor Abiola Ajimobi’s philosophy to decongest traffic at all entrances and exits to the state as part of the massive infrastructural development going on in the state.
Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies
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.
Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension
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.
Gold Dips by 2 Percent on Better Than Expected Job Report
- 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.
News4 days ago
Fire Guts Central Bank of Nigeria Office in Gombe
Economy4 days ago
Citigroup Sees $60 Per Barrel Crude Oil in the Next 12 Months
Stock Market20 hours ago
Flour Mills, Dangote Cement, Vitafoam Disclose Insider Dealings
Technology4 days ago
Jeff Bezos Sets a New Record as Net Worth Hits $172bn
Finance4 days ago
Debt Market: Dangote Cement Raises N250 Billion in H1, 2020
Forex15 hours ago
CBN Starts Using N380/$ Official Rate, Expects to Make it Official Soon
Technology5 days ago
Facebook, Google Earn 80% of Annual Digital Ads Spend – Report
Forex4 days ago
Naira Records Marginal Gain Against the US Dollar on Thursday