Business

Why Commodity Prices’ll Remain High In Nigeria, Others – World Bank

Published

3 years ago

May 15, 2022

The World Bank has said that the war in Ukraine has dealt a major shock to commodity markets, altering global patterns of trade, production, and consumption in ways that will keep prices at historically high levels through the end of 2024.

The World Bank said this in its latest Commodity Markets Outlook report.

According to a new report by the Washington-based bank titled, “Food and energy price shocks from Ukraine war could last for years,” the increase in energy prices over the past two years had been the largest since the 1973 oil crisis. Price increases for food commodities—of which Russia and Ukraine are large producers—and fertilizers, which relied on natural gas as a production input, had been the largest since 2008.

“Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s. As was the case then, the shock is being aggravated by a surge in restrictions in the trade of food, fuel and fertilizers,” said the World Bank’s Vice President for Equitable Growth, Finance, and Institutions, Indemit Gill

“These developments have started to raise the spectre of stagflation. Policymakers should take every opportunity to increase economic growth at home and avoid actions that will bring harm to the global economy.”

According to the report, energy prices were expected to rise more than 50 per cent in 2022 before easing in 2023 and 2024. Non-energy prices, including agriculture and metals, are projected to increase almost 20 per cent in 2022 and will also moderate in the following years.

Nevertheless, commodity prices are expected to remain well above the most recent five-year average. In the event of a prolonged war or additional sanctions on Russia, prices could be even higher and more volatile than currently projected.

Because of war-related trade and production disruptions, the World Bank predicts the price of Brent crude oil at an average of $100 a barrel in 2022, its highest level since 2013 and an increase of more than 40 per cent compared to 2021. Prices are expected to moderate to $92 in 2023—well above the five-year average of $60 a barrel. Natural gas prices (European) are expected to be twice as high in 2022 as they were in 2021, while coal prices are expected to be 80 per cent higher, with both prices at all-time highs.

“Commodity markets are experiencing one of the largest supply shocks in decades because of the war in Ukraine,” said Director of the World Bank’s Prospects Group, Ayhan Jose, which produces the Outlook report.

“The resulting increase in food and energy prices is taking a significant human and economic toll—and it will likely stall progress in reducing poverty. Higher commodity prices exacerbate already elevated inflationary pressures around the world.”

The report said wheat prices were forecast to increase more than 40 per cent, reaching an all-time high in nominal terms this year. That will put pressure on developing economies that rely on wheat imports, especially from Russia and Ukraine. Metal prices are projected to increase by 16 per cent in 2022 before easing in 2023 but will remain at elevated levels.

“Commodity markets are under tremendous pressure, with some commodity prices reaching all-time highs in nominal terms,” said Senior Economist in the World Bank’s Prospects Group, John Baffes.

“This will have lasting knock-on effects. The sharp rise in input prices, such as energy and fertilizers, could lead to a reduction in food production particularly in developing economies. Lower input use will weigh on food production and quality, affecting food availability, rural incomes, and the livelihoods of the poor.”

PUNCH.

Business

Naira Appreciates At Official Market

Published

3 weeks ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.

Business

BREAKING: Again, Dangote Refinery Cuts Petrol Price

Published

3 weeks ago

May 22, 2025

Editor

The Dangote Petroleum Refinery has announced a nationwide reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, with new prices now ranging between ₦875 and ₦905 per litre, depending on location.

The ₦15 per litre cut applies across all regions and partner fuel stations, and was confirmed via an official announcement posted on Dangote Refinery’s social media channels on Thursday.

Major marketers participating in the new pricing regime include MRS, Ardova, Heyden, Optima Energy, Techno Oil, and Hyde Energy — partners in the distribution of Dangote-refined products.

Under the previous pricing structure, Lagos residents paid ₦890 per litre, while prices reached ₦920 in the North-East and South-South regions. With the latest adjustment, Lagos now pays ₦875 per litre, while the North-East and South-South will see prices drop to ₦905.

A regional breakdown of the revised prices is as follows: Lagos: ₦875, South-West: ₦885, North-West & Central: ₦895, North-East & South-South: ₦905 and South-East: ₦905.

In its announcement, Dangote Refinery encouraged consumers to purchase fuel only from authorised partner stations and urged the public to report any cases of non-compliance via its official hotlines: +234 707 470 2099 and +234 707 470 2100.

“Our quality petrol and diesel are refined for better engine performance and are environmentally friendly,” the company said.

Business

Naira Appreciates Against Dollar At Foreign Exchange Market

Published

4 weeks ago

May 17, 2025

Editor

The Naira ended the trading week on a positive note, recording a bullish close on Friday at the official foreign exchange market.

It appreciated N1,598.72 against the U.S. Dollar, reflecting a modest gain that suggests continued efforts to stabilise the local currency.

According to figures published on the Central Bank of Nigeria’s official website, the Naira strengthened by N0.60k against the Dollar on Friday.

This upward movement represents a 0.03 per cent appreciation compared to the N1,599.32 exchange rate recorded at the close of trading on Thursday.

The local currency had shown some resilience earlier in the week, posting gains on both Tuesday and Wednesday trading sessions.

On Tuesday, the Naira appreciated by 0.02 per cent, followed by a stronger gain of 0.21 per cent on Wednesday.

These improvements were seen as positive indicators of growing investor confidence and increased supply in the foreign exchange market.

However, Thursday’s trading session saw a minor setback, with the Naira slipping by N2.62 against the Dollar.

This loss equated to a 0.16 per cent depreciation, dampening the midweek rally seen in previous sessions.

Market analysts attributed Thursday’s dip to a brief increase in Dollar demand from importers and other market participants.

Despite this, the week still closed on a positive note, with the Naira showing signs of gradual recovery and increased market stability.

Analysts continue to monitor the Central Bank’s policies, especially interventions aimed at improving Dollar liquidity and managing demand pressures.

The Naira’s performance in the coming weeks will likely depend on consistent supply inflows and investor sentiment across the broader economic landscape.