Economy
Global Food Prices Jump to Almost 7-Year High in March
By Adedapo Adesanya
The United Nations through the Food and Agriculture Organisation (FAO) has disclosed that global food commodity prices rose for the 10th conservative month in March, led by vegetable oils and dairy products.
The FAO said this in its Food Price Index report released on Thursday, noting that in the third month of the year, the FAO food price index averaged 118.5 points in March, 2.1 per cent higher than in February and reaching its highest level since June 2014.
It said the March increase was led by the FAO Vegetable Oil Price Index which rose 8.0 per cent from the previous month and making its highest level since June 2011.
“The persistent strength of the index was driven by higher values of palm, soy, rape and sunflower oils.
“International palm oil prices registered a tenth conservative monthly increase as lingering concerns over tight inventory levels in major exporting countries coincided with a gradual recovery in global import demand.
“Meanwhile, soy oil prices rose sharply, largely underpinned by prospects of firm demand especially from the biodiesel sector,” it said.
The FAO Dairy Price Index averaged 117.4 points in March, rising for the 10th conservative month and lifting the index to nearly 16 per cent above its value in the corresponding month last year.
“In March, international butter prices rose mainly underpinned by somewhat tight supplies in Europe due to a slow start to its milk production season and increased internal demand in anticipation of a foodservice sector recovery.
“Milk powder prices also rose, supported by a surge in imports in Asia, particularly China due to declining production in Oceania and scarce shipping container availability in Europe and North America,” the report said.
According to the report, the FAO Cereal Index averaged 123.6 points in March, down 1.7 per cent from February, ending the eight-month rising trend but still 26.5 per cent above its March 2020 level.
“Among major cereals, wheat export prices declined the most in March falling 2.4 per cent.
“However, they remained 19.5 per cent higher than in the same month last year.
“The month to month decline in wheat prices mostly reflected generally good supplies and favourable production prospects for the 2021 crops.
“International maize and barley prices also fell in March although continued strong import demand from China prevented them from falling more significantly, and sorghum prices even rose,” it said.
In the report, the FAO Meat Price Index averaged 98.9 points in March up 2.3 per cent from February.
“Poultry and pig meat quotations increased, underpinned by a fast pace of imports by Asian countries, mainly China.
“A surge in internal sales in Europe in preparation for the Easter celebrations also supported pig meat prices.
“Bovine meat prices remained steady at close to the February levels.
“By contrast, ovine meat prices fell on increased supplies from New Zealand as farmers offloaded animals early due to prevailing dry weather,” the report said.
The report said the FAO Sugar Price Index averaged 96.2 points in March, down 4.0 per cent from February, 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 prospects of large exports from India despite persisting logistical constraints.
“Sugar quotations remained more than 30 per cent above its year-earlier level, underpinned by concerns over tight global supplies in 2020/21,” it said.
Giving its forecast, FAO said it expects world cereal production in 2021 to increase for the third consecutive year.
It said for the current 2020/21 marketing season, global cereal utilisation is now forecast at 2777 million tonnes, 2.4 per cent higher than the previous year, driven largely by higher estimates of feed use of wheat and barley in China where the livestock sector is recovering from Africa swine fever.
It said world cereal stocks at the end of 2021 are forecast to decline by 1.7 per cent from their opening levels to 808 million tonnes.
“Combined with the utilisation forecasts, the global cereal stock to use ratio for 2020/21 is foreseen to dip to a seven-year low of 28.4 per cent.
“Global wheat production is forecast to reach a new high of 785 million tonnes in 2021, up 1.4 per cent from 2020, driven by a likely sharp rebound across most of Europe and expectations of a record harvest in India,” it said.
By Adedapo Adesanya
Five securities pulled down the NASD Over-the-Counter (OTC) Securities Exchange by 1.72 per cent on Friday, August 14, cutting the market capitalisation by N47.04 billion to N2.689 trillion from N2.727 trillion, and slicing the NASD Security Index (NSI) by 78.37 points to 4,465.83 from 4,532.03 points.
11 Plc led the price decliners yesterday after its price went down by N15.03 to N230.00 per share from N245.03 per share. MRS Oil Plc weakened by N13.20 to N118.80 per unit from N132.00 per unit, Central Securities Clearing System (CSCS) Plc slid by N10.30 to N99.46 per share from N109.76 per share, Okitipupa Plc fell by N6.99 to N270.01 per unit from N277.00 per unit, and Afriland Properties Plc dipped by N2.00 to N20.00 per share from N22.00 per share.
Business Post reports that the OTC securities exchange recorded four gainers during the session, led by FrieslandCampina Wamco Nigeria Plc, which appreciated by N9.85 to N169.85 per unit from N160.00 per unit. IPWA Plc gained 70 Kobo to close at N10.41 per share versus N9.71 per share, Industrial and General Insurance (IGI) Plc rose by 4 Kobo to 54 Kobo per unit from 50 Kobo per unit, and Geo-Fluids Plc improved by 1 Kobo to N2.06 per share from N2.05 per share.
The volume of trades soared by 64.8 per cent to 3.2 million units from the previous session’s 1.9 million units, the value of transactions jumped by 78.2 per cent to N375.7 million from N210.8 million, and the number of deals surged by 35.3 per cent to 46 deals from 34 deals.
Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 79.0 million units exchanged for N5.7 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Dipo Olowookere
The dominance of the bears on the Nigerian Exchange (NGX) Limited was consolidated on Friday, after further inflicting an 0.12 per cent loss at the close of trading activity.
All the key sectors of the local stock market turned red yesterday as a result of sustained profit-taking, though the industrial goods space was flat.
The insurance counter lost 1.49 per cent, the energy index shed 0.63 per cent, the consumer goods segment declined by 0.46 per cent, and the banking sector tumbled by 0.23 per cent.
Consequently, the All-Share Index (ASI) retreated by 398.18 points to 242,619.20 points from 243,017.38 points, and the market capitalisation receded by N257 billion to N156.624 trillion from N156.881 trillion.
Fortis Global Insurance lost 9.31 per cent to trade at N2.63, Omatek depreciated by 9.04 per cent to N1.51, John Holt slipped by 9.00 per cent to N9.10, RT Briscoe slumped by 7.94 per cent to N11.60, and Dangote Sugar went down by 7.79 per cent to N64.55.
But International Energy Insurance gained 9.92 per cent to sell for N5.32, Trans-Nationwide Express appreciated by 9.65 per cent to N2.84, Guinea Insurance improved by 6.67 per cent to 80 Kobo, Regency Alliance grew by 6.25 per cent to 85 Kobo, and Japaul jumped by 5.36 per cent to N2.95.
The market breadth index remained negative, with 30 price losers and 21 price gainers, indicating weak investor sentiment.
The level of activity contracted yesterday, with the trading volume, value, and number of deals down by 66.67 per cent, 10.65 per cent, and 5.60 per cent, respectively.
This was because market participants transacted 1.4 billion shares worth N45.3 billion in 39,134 deals during the session compared with the 4.2 billion shares valued at n50.7 billion traded in 41,454 deals on Thursday.
Fortis Global Insurance was the most active equity for the day, with a turnover of 874.1 million units valued at N2.4 billion, Cornerstone Insurance sold 100.3 million units worth N506.5 million, Universal Insurance traded 56.7 million units for N44.5 million, Sterling Holdings exchanged 53.3 million units worth N402.9 million, and MTN Nigeria transacted 44.6 million units valued at N31.4 billion.
By Adedapo Adesanya
The Naira maintained stability against the United States Dollar in the different segments of the foreign exchange (FX) market on Friday, August 14, according to data obtained by Business Post.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency remained unchanged at N1,357.65/$1, but lost N6.05 against the Pound Sterling to trade at N1,840.10 versus the previous session’s N1,834.05/£1, and depreciated against the Euro by N4.70 to sell for N1,571.70/€1 compared with the preceding day’s N1,567.00/€1.
At the black market, the Nigerian currency traded flat against the Dollar at N1,395/$1, but gained N3 at the GTBank forex desk to quote at N1,364/$1 versus Thursday’s exchange rate of N1,367/$1.
Data from the Central Bank of Nigeria (CBN) showed that interbank FX transactions surged by 51.2 per cent to $119.594 million from $79.097 million. These transactions were executed in 137 deals, higher than the 98 deals recorded a day earlier.
FX inflows from exporters, remittances and other sources, alongside demand from importers and individuals requiring Dollars, continue to shape market conditions.
Meanwhile, the cryptocurrency market recovered yesterday after experiencing a downturn in the previous sessions following reports that index provider MSCI has proposed new “non-operating company” screens for its Global Investable Market Indexes. Although the framework does not explicitly target cryptocurrency, it evaluates whether a company’s core operating assets constitute more than 50 per cent of its total holdings.
Heavy digital asset treasury adopters, including Strategy and Metaplanet, fail the proposed criteria and face potential removal during upcoming index rebalancings. While inclusion in major equity benchmarks previously allowed passive index funds and ETFs to automatically acquire these stocks, their removal could trigger forced institutional selling.
Dogecoin (DOGE) grew by 0.7 per cent to $0.07, Binance Coin (BNB) expanded by 0.6 per cent to $611.34, Ethereum (ETH) added 0.4 per cent to trade at $1,879.65, and Bitcoin (BTC) increased by 0.2 per cent to $63,045.87, with Ripple (XRP), the US Dollar Tether (USDT), and the US Dollar Coin (USDC) flat at $1.00, respectively.
But Cardano (ADA) lost 1.2 per cent to trade at $0.1795, TRON (TRX) shed 0.4 per cent to finish at $0.3323, and Solana (SOL) declined by 0.2 per cent to $75.60.
