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Economy

Global Food Prices Decline for Another Month

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Africa's Food System

By Adedapo Adesanya

Last month, prices of food around the world fell for the second consecutive month as the Food Price Index averaged 157.4 points in May 2022, down 0.9 points (0.6 per cent) from April.

The index, recorded by the Food and Agriculture Organisation (FAO), despite the decline, was still 29.2 points (22.8 per cent) above its value in the corresponding month last year.

The drop in May was led by declines in the vegetable oil and dairy price indices, while the sugar price index also fell to a lesser extent.

Meanwhile, cereal and meat price indices increased.

The FAO Cereal Price Index averaged 173.4 points in May, up 3.7 points (2.2 per cent) from April and as much as 39.7 points (29.7 per cent) above its May 2021 value.

International wheat prices rose for a fourth consecutive month, up 5.6 per cent in May, to an average of 56.2 per cent above their value last year and only 11 per cent below the record high reached in March 2008.

The steep increase in wheat prices was in response to an export ban announced by India amidst concerns over crop conditions in several leading exporting countries, as well as reduced production prospects in Ukraine because of the war. By contrast, international coarse grain prices declined by 2.1 per cent in May but remained 18.1 per cent above their value a year ago.

Slightly improved crop conditions in the United States of America, seasonal supplies in Argentina and the imminent start of Brazil’s main maize harvest led maize prices to decline by 3.0 per cent; however, they remained 12.9 per cent above their level of May 2021.

Similarly, international sorghum prices also fell in May by 3.1 per cent, while spillover from the strength in wheat markets and concerns over crop conditions in the European Union (EU) boosted barley prices by 1.9 per cent.

International rice prices increased for the fifth successive month in May. Quotations strengthened in all the major market segments, but monthly increases were least pronounced (2.6 per cent) for the most widely traded Indica varieties, amid ample supplies, especially in India.

The FAO Vegetable Oil Price Index averaged 229.3 points in May, down 8.3 points (3.5 per cent) month-on-month, yet remaining markedly above its year-earlier level.

The monthly decline mainly reflects lower prices across palm, sunflower, soy, and rapeseed oils. International palm oil prices weakened moderately in May.

Apart from demand rationing, the removal of Indonesia’s short-lived export ban on palm oil exerted additional downward pressure on prices, although a further price drop was contained by lingering uncertainties over the country’s export prospects.

Meanwhile, world price quotations for sunflower oil fell from recent record highs, with stocks continuing to accumulate in Ukraine owing to logistical bottlenecks.

International soy and rapeseed oil prices also declined somewhat in May, chiefly weighed by sluggish import demand in view of elevated costs in recent months.

The FAO Dairy Price Index averaged 141.6 points in May, down 5.1 points (3.5 per cent) from April, marking the first decline after eight consecutive monthly increases, but still 20.5 points (16.9 per cent) higher than its level in May of last year. World prices of all milk products fell, with milk powders declining the most, underpinned by lower buying interests on market uncertainties stemming from the continued lockdown in China, despite the persistent global supply tightness.

Butter prices also dropped significantly due to weaker import demand in tandem with some improvements to supplies from Oceania and limited internal sales in Europe.

Meanwhile, robust retail sales and high demand from restaurants ahead of the summer holidays in the Northern Hemisphere prevented cheese prices from falling significantly, despite weakened global import demand.

The FAO Meat Price Index averaged 122.0 points in May, up 0.6 points (0.5 per cent) from April, setting a new all-time high, driven by a steep rise in world poultry meat prices, more than offsetting declines in pig and ovine meat values.

In May, poultry meat prices rose, reflecting the continued supply chain disruptions in Ukraine and recent cases of avian influenza amid a surge in demand in Europe and the Middle East.

Meanwhile, international bovine meat prices remained stable, as increased supplies from Brazil and Oceania were adequate to meet persistently high global demand.

By contrast, world pig meat prices fell on high export availabilities, especially in Western Europe, amid lacklustre internal demand and expectations for releasing pig meat from the EU Commission’s Private Storage Aid scheme. International prices of ovine meat also dropped, reflecting the impact of currency movements.

The FAO Sugar Price Index averaged 120.3 points in May, down 1.3 points (1.1 per cent) from April, marking the first decline after sharp increases registered in the previous two months.

The recent monthly decline in international sugar price quotations was triggered by limited global import demand and good global availability prospects, mostly stemming from a bumper crop in India.

The weakening of the Brazilian Real against the US dollar and lower ethanol prices resulted in further downward pressure on world sugar prices.

However, uncertainties over the current season’s outturn in Brazil, the world’s largest sugar exporter, prevented more substantial price declines.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

NGX Index Advances by 0.50% as Ecobank, MTN, Others Gain

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NGX Index

By Dipo Olowookere

Buying interests in Ecobank, MTN Nigeria and others lifted the stock market by 0.50 per cent on Monday as investors are having confidence again in the Nigerian Exchange (NGX) Limited after a wave of selling pressure caused by global uncertainties.

At the market yesterday, the All-Share Index (ASI) nudged closer to the 52,000 psychological points as it gained 344.12 points to settle at 51,962.85 points compared with the preceding session’s 51,618.73 points.

But the market capitalisation moved to the next level as it appreciated by N186 billion to close the first trading session of the week at N28.014 trillion versus last Friday’s N27.875 trillion.

Data from the exchange showed that the insurance space grew by 1.50 per cent, the banking index gained 0.51 per cent, the energy counter rose by 0.12 per cent, while the consumer goods sector lost 0.56 per cent, with the industrial goods space flat at the close of business.

The activity chart was in the green on Monday as the trading volume expanded by 70.75 per cent to 266.5 million shares from 223.3 million shares, the trading value increased by 41.82 per cent to N2.6 billion to N1.8 billion, while the number of trades improved by 17.12 per cent to 5,050 deals from 4,312 deals.

It was observed that Livingtrust Mortgage Bank emerged as the most traded stock with a turnover of 64.7 million units valued at N77.6 million, trailed by Transcorp with a turnover of 31.8 million units worth N39.7 million. Access Holdings exchanged 29.3 million shares for N275.2 million, Oando sold 27.7 million stocks worth N162.4 million, while UBA transacted 20.6 million equities valued at N152.8 million.

Business Post reports that the market breadth closed positive yesterday with 18 price gainers and 16 price losers, indicating a strong investor sentiment.

Ecobank chalked up 9.79 per cent as the highest price gainer to settle at N10.65, John Holt appreciated by 9.52 per cent to 69 kobo, Linkage Assurance improved by 9.43 per cent to 58 kobo, Okomu Oil jumped by 8.53 per cent to N210.00, while Cornerstone Insurance rose by 6.45 per cent to 66 kobo.

PZ Cussons closed the day as the biggest price decliner after it dropped 10.00 per cent to sell at N11.25, Eterna lost 9.33 per cent to finish at N6.80, RT Briscoe depreciated by 6.25 per cent to 45 kobo, Ardova fell by 5.09 per cent to N13.05, while Nigerian Breweries declined by 3.42 per cent to N57.95.

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Economy

Unlisted Securities Investors Gain N10bn in One Week 

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NASD Unlisted Securities Index

By Adedapo Adesanya

The 25th week of trading at the National Association of Securities Dealers (NASD) Over-the-Counter (OTC) Securities Exchange ended on a positive note last Friday.

In the five-day trading week, investors saw an expansion in their investment portfolios by 0.5 per cent or N10 billion as the market capitalisation closed at N1.011 trillion compared with the preceding week’s N1.010 trillion as the NASD Unlisted Securities Index (NSI) increased by 3.86 points to 768.27 points from 764.41 points.

Business Post reports that three stocks on the bourse contributed to the gains reported by unlisted securities investors last week as they overpowered the losses printed by two equities.

Niger Delta Exploration and Production Plc appreciated in the week by 10 per cent to close at N198.00 per share in contrast to the preceding week’s N180 per share, Citi Trust Plc grew by 9.6 per cent to N6.85 per unit from N6.25 per unit, while Central Securities Clearing System (CSCS) Plc appreciated by 2.5 per cent to N14.80 per share from N14.44 per share.

Conversely, NASD Plc lost 8.7 per cent to settle at N13.68 per unit compared with the previous N15.00 per unit, while Nipco Plc depreciated by 5.2 per cent to N58.85 per share from N62.10 per share.

There was a 352.8 per cent increase in the total value of transactions in the week to N324.4 million from N69.9 million, while the volume of trades went down by 57.0 per cent to 6.0 million units from 2.6 million units just as the number of deals decreased by 8.1 per cent to 57 trades from 62 trades of the previous week.

At the close of the week, VFD Group Plc was the most traded security by volume with 1.2 million units, CSCS Plc traded 703,377 units, NASD Plc exchanged 350,935 units, CitiTrust Holdings Plc traded 214,800 units, while NDEP Plc sold 65,300 units.

In terms of the value of trades in the week, VFD Group Plc also topped with N293.5 million, NDEP Plc recorded N12.5 million, CSCS Plc traded N10.4 million, NASD Plc posted N5.3 million, while CSCS Plc had N1.5 million.

On a year-to-date basis, investors have transacted 3.2 billion units worth N21.3 billion in 1,428 deals, with the year-to-date gain at 3.4 per cent.

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Economy

Trading in Greif Nigeria Shares Halted for Smooth Winding up Process

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Greif Nigeria

By Dipo Olowookere

Holders of Greif Nigeria Plc shares have been prevented from trading the security on the floor of the Nigerian Exchange (NGX) Limited for now.

The embargo on the trading of the company’s stocks was placed on Monday, June 20, 2022, to ensure the process of winding up the organisation goes seamlessly.

Greif Nigeria, formerly known as Van Leer Containers Nigeria Plc, is in the business of making steel drums in the country. It also manufactures plastic containers and sheet metal products.

The company, which is a subsidiary of Greif International Holding BV, also offers services for steel punching and aluminium welding.

But lately, things have not been going on smoothly and it is in the process of winding up.

At its Annual General Meeting (AGM) held on January 31, 2022, the shareholders of the firm authorised the board to begin the voluntary winding up of the company.

In accordance with Section 622 of the Companies and Allied Matters Act (CAMA) 2020 which states that a voluntary winding-up shall be deemed to commence at the time of the passing of the resolution for voluntary winding-up, the NGX Regulation (NGX RegCo) Limited, has notified “all trading license holders and the investing public that it has suspended trading in the shares of Greif Nigeria Plc effective on Monday, June 20, 2022, to ensure a smooth winding-up process.”

In a notice filed last week, the agency explained that this action was also in line with Section 624 of CAMA 2020 which provides that a transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members of the company, made after the commencement of a voluntary winding-up, shall be void.

Business Post reports that Greif Nigeria, which uses the ticker Vanleer on the NGX trading platform, has shares outstanding of 42.640 million units and a market capitalisation of N232.4 million as it last traded at N5.45 per unit.

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