Economy
Nigerians to Expect Increase in Prices of Rice in December—Olam
By Adedapo Adesanya
Tough times are on the horizon as one of the nation’s largest rice farms operated by Olam Nigeria has been affected by flooding in Nasarawa State.
Speaking on a programme on Arise TV, Mr Ade Adefeko, the vice-president of Olam Nigeria Limited, said the incident affected the company’s $20 million investment and about 25 per cent of Nigeria’s rice needs.
He said the situation would spike the prices of the commodity at the end of the year. Currently, a 50kg bag of rice sells between N37,000 and N39,000, depending on the brand.
“Well, what happened on October 2, I will tell you that 25 per cent of the crop for rice has been taken out. We should expect an increase in the prices of rice in December. Of course, that goes without saying because the entire crop has been lost,” he said.
Mr Adefeko described the situation as “very terrible”, adding that climate change is real despite all efforts put in place to prevent the damage.
“The entire team from the farm worked very hard to prevent the colossal damage that arose there from the dam broke the likes of the dam the dikes of the farm, and that affected us to a large extent we supply about 25 per cent of Nigeria’s rice needs, and that has been affected and have lost over $20 million,” he said.
The Olam deputy head said the farms were insured, but the damage scale was large.
“Of course, we are insured, But you can insure crops; you cannot replace crops. So, the crop has been insured, but you cannot be replaced. So you have to grow again. So, we are talking about 4400 hectares of farmland gone submerged due to climate change. So it’s very serious.
“Well, like I spoke to the fact that climate change is real. There’s not much you can do about the fact that climate change is real. We’ll continue to do what we have to do. I think NiMET had warned about the impending floods, I am sure you will notice what happened in Kogi as well.
“When they say it rains. It’s not really raining, it’s pouring. So it’s terrible.”
According to Mr Adefeko, Olam farm, located in Rukubi Doma LGA of Nasarawa state, was flooded after River Benue burst its banks and broke the dyke.
“Doma, where we are, is where we have the largest facility. We have the largest rice farm and mill on the continent. It is a $140 million investment, the national $20 million investment, which brought everything to $160 million.
“On our journey to the communities where we operate, it’s terrible. I mean, you need to come and see what is happening. We have over 57 kilometres of dikes surrounding the farms. The farm was built 12 kilometres by 7 kilometres, and 57 kilometres of dikes were meant to stop the flow from entering, but this was made after the 2012 major crisis.”
In another interview with Channels TV, the farm’s Chief Agronomist, Dr Umar Ismaila, said the incident will affect Nigeria’s food security.
The Flood Situation in Nigeria
Many parts of the country have witnessed heavy flooding in recent weeks, with Kogi, Nassarawa, Gombe, and Anambra affected badly. Human and material losses have risen as a result of the unusual rainfalls and the release of excess water from the Lagdo Dam in neighbouring Cameroon’s northern region.
The Nigeria Hydrological Services (NIHSA) blamed state and local governments for disregarding “adequate and timely warnings” and weather advisories issued by various Federal Government agencies.
In August, the Nigerian Meteorological Agency (NEMA) predicted that the prevailing weather pattern in Nigeria would cause above-normal rainfall in about 19 states between August and October this year.
It stated that above-normal rainfall conditions were expected over the northern states such as Sokoto, Zamfara, Katsina, Kano, Jigawa, Yobe, Borno, Bauchi, much of Kebbi and Gombe, as well as northern Kaduna and Adamawa states, whereas normal to above-normal rainfall conditions were expected over most parts of the south-western states including Lagos, Ogun, Osun, much of Oyo, Ondo, parts of Ekiti, and Edo.
It advised states to intensify adaptation, mitigation, and response mechanisms to curb the impending danger
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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