Economy
Hunger Persists Despite Strong Global Harvests—FAO
By Modupe Gbadeyanka
According to the new edition of FAO’s Crop Prospects and Food Situation report, global food supply conditions are robust, but access to food has been dramatically reduced in areas suffering civil conflicts, while drought conditions are worsening food security across swathes of East Africa.
Some 37 countries require external assistance for food, 28 of them in Africa as a result of lingering effects of last year’s El Niño-triggered droughts on harvests in 2016.
Yet, while agricultural production is expected to rebound in southern Africa, protracted fighting and unrest is increasing the ranks of the displaced and hungry in other parts of the world.
Famine has been formally declared in South Sudan and the food security situation is of grave concern in northern Nigeria, Somalia and Yemen.
“This is an unprecedented situation. Never before have we been faced with 4 threats of famine in multiple countries simultaneously,” said FAO Assistant Director-General Kostas Stamoulis, head of the Economic and Social Development department. “It demands swift action which should consist of immediate food assistance but also livelihood support to ensure that such situations are not repeated.”
In South Sudan, 100,000 people were facing famine in Leer and Mayendit Counties, part of former Unity State, while there was an “elevated risk” that similar conditions existed in two nearby counties.
Overall, about 4.9 million people across the country were classified as facing crisis, emergency or famine. That number is projected to increase to 5.5 million, or almost half the country’s population, at the peak of the lean season in July.
In northern Nigeria, 8.1 million people are facing acute food insecurity conditions and require urgent life-saving response and livelihood protection. That comes despite the above-average cereal harvest in 2016 and reflects the disruption caused by conflict as well as the sharp depreciation of the Naira.
In Yemen, 17 million people or two-thirds of the population are estimated to be food insecure, while almost half of them are in need of emergency assistance, with the report noting that “the risk of famine declaration in the country is very high.”
In Somalia, the combination of conflict, civil insecurity and drought have resulted in more than double the number of people – now estimated at 2.9 million – being severely food insecure from six months ago. Drought has curtailed fodder for pastoralists and the third consecutive season of poor rainfall is estimated to have reduced crop production in southern and central regions to 70 percent below average levels, leaving food stocks depleted.
Conflicts and civil unrest in Afghanistan, Burundi, Central African Republic, Democratic Republic of Congo, Iraq, Myanmar and Syria are also exacerbating food insecurity conditions for millions of people as well affecting nearby countries hosting refugees. In addition, the drought in East Africa in late 2016 has heightened food insecurity in several countries in the sub-region.
Worldwide trends
Cereal production made quite strong gains in the world overall in 2016, with a record recovery in Central America, and larger cereal crops in Asia, Europe and North America.
Looking ahead, FAO’s first global wheat production forecast for 2017 points to a 1.8 percent decline from last year’s record level, due mostly to a projected 20 percent output drop in the United States of America, where the area sown to winter wheat is the lowest level in over 100 years.
Prospects are favourable for the 2017 maize crop in Brazil and Argentina and the outlook is generally positive for coarse grains throughout the Southern Hemisphere. Prospects for rice are mixed, but it is still too early to make firm predictions for many of the world’s major crops.
Maize harvests in Southern Africa, slashed by El Niño, are forecast to recover this year, with South Africa’s output expected to increase by more than 50 percent from 2016, with positive trends likely in most nearby countries. However, an outbreak of armyworms, along with localized flooding in Mozambique, Zambia and Zimbabwe, could limit larger production gains in 2017.
The 37 countries currently in need of external food assistance are Afghanistan, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic People’s Republic of Korea, Democratic Republic of the Congo, Djibouti, Eritrea, Ethiopia, Guinea, Haiti, Iraq, Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Niger, Nigeria, Pakistan, Sierra Leone, Somalia, South Sudan, Sudan, Swaziland, Syria, Uganda, Yemen and Zimbabwe.
By Adedapo Adesanya
Crude oil went down on Tuesday after a projection showed steady demand in the world’s largest oil producer, the United States, for 2025, Brent futures declining by $1.09 or 1.35 per cent to settle at $79.92 a barrel and the US West Texas Intermediate (WTI) crude losing $1.32 or 1.67 per cent to finish at $77.50 a barrel.
On Tuesday, the US Energy Information Administration said the country’s oil demand would remain steady at 20.5 million barrels per day in 2025 and 2026, with domestic oil output rising to 13.55 million barrels per day, an increase from the agency’s previous forecast of 13.52 million barrels per day for this year.
Also, the oil market shrank a few days after prices gained following new US sanctions on Russian oil exports to India and China.
On Monday, prices jumped 2 per cent after the US Treasury Department on Friday imposed sanctions on Gazprom Neft and Surgutneftegas as well as 183 vessels that transport oil as part of Russia’s so-called shadow fleet of tankers.
Analysts say this move could have a significant price impact on Russian oil supplies from the fresh sanctions, however, their effect on the physical market could be less pronounced than what the affected volumes might suggest.
ING analysts estimated the new sanctions had the potential to erase the entire 700,000 barrels per day surplus they had forecast for this year, but said the real impact could be lower.
Uncertainty about demand from China, the world’s largest oil importer, could impact tighter supply this year.
China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.
Meanwhile, the American Petroleum Institute (API) estimated that crude oil inventories in the US fell by 2.6 million barrels for the week ending January 10.
For the week prior, the API reported a draw of 4.022 million barrels in US crude oil inventories amid build season, while product inventories saw a hefty build.
In 2024, crude oil inventories dropped by more than 12 million barrels, according to the API’s inventory data. In the first few weeks of 2025, crude inventories have shed more than 6.6 million barrels.
Official data from the US EIA will be due later on Wednesday, confirming the actual level of stockpiles.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited came under heavy selling pressure on Tuesday, going down by 1.66 per cent as investors embarked on profit-taking after most stocks on the trading platform gained in the past few trading sessions.
It was observed that the industrial goods sector was the most affected yesterday as it went down by 4.99 per cent due to the decline suffered by Dangote Cement and others.
The insurance continued its downward trend during the day as it lost 2.80 per cent, the consumer goods counter fell by 0.27 per cent, and the banking index shed 0.10 per cent, while the energy sector appreciated by 0.29 per cent.
At the close of business, the All-Share Index (ASI) deflated by 1,745.16 points to settle at 103,622.09 points compared with the previous trading day’s 105,367.25 points and the market capitalisation moderated by N1.1 trillion to finish at N63.188 trillion versus Monday’s N64.252 trillion.
Business Post reports that investor sentiment remained weak on Tuesday after the bourse ended with 41 depreciating equities and 23 appreciating equities, representing a negative market breadth index.
Honeywell Flour lost 10.00 per cent to trade at N9.54, Dangote Cement declined by 9.98 per cent to N431.00, Julius Berger crashed by 9.98 per cent to N139.80, Sovereign Trust Insurance decreased by 9.68 per cent to N1.12, and Prestige Assurance tumbled by 9.30 per cent to N1.17.
On the flip side, Northern Nigerian Flour Mills appreciated by 10.00 per cent to N45.10, Livestock Feeds grew by 9.91 per cent to N6.10, Academy Press expanded by 9.90 per cent to N3.22, University Press increased by 9.82 per cent to N4.81, and Neimeth gained 9.76 per cent to quote at N3.15.
During the session, market participants bought and sold 503.3 million shares valued at N12.6 billion in 12,900 deals compared with the 505.8 million shares worth N8.1 billion traded in 14,259 deals a day earlier, indicating a rise in the trading value by 55.56 per cent and a drop in the trading volume and number of deals by 0.49 per cent and 9.53 per cent, respectively.
The most active stock for the session was GTCO with 54.4 million units worth N3.2 billion, Nigerian Breweries transacted 32.2 million units for N1.0 billion, Universal Insurance traded 30.8 million units valued at N22.6 million, AIICO Insurance exchanged 26.6 million units worth N47.2 million, and Chams transacted 20.0 million units valued at N40.9 million.
By Adedapo Adesanya
The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).
In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.
Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.
According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.
These bonds have some special features. They are tax-free under both company and personal tax laws.
Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.
However, interested investor can only buy at least N5,000 worth, and can’t buy more than N50 million.
This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.
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