Daily Watch – Oil output declines in December, Cocoa processors worry over rising costs

11th January 2016

  • Industry analysts say that the proposed oil revenue in the 2016 budget may not be feasible as Nigeria’s crude exports begin to fall amid further slide in global oil prices. President Buhari had in the 2016 to 2018 Medium Term Expenditure Framework and Fiscal Strategy Paper sent to the National Assembly for this year’s budget said oil-related revenues were expected to contribute N820 billion to the nation’s revenue, but the total exports of Nigerian crude oil are expected to slide in February after reaching a three-month high in January, Reuters reported, citing a compilation of loading programmes. The export programme for Brass River crude, which was under force majeure, had not yet been issued as of Friday, leaving just 56 cargoes for a total of 53 million barrels planned for February loading. Nigeria’s output declined by 50,000 barrels per day in December due to disruptions to exports from the Brass River and Bonny production streams, a Reuters survey found out.
  • An increased awareness among farmers that export proceeds are received in US dollars has led to cocoa processors recording huge losses on cocoa beans. The president, Cocoa Processors Association of Nigeria, Dimeji Owofemi, told The Punch that this is as a result of the Federal Government’s foreign exchange market restrictions. Owofemi said that the local price for the product was based on the value of naira to the dollar at the parallel market while operators were compelled to sell their export proceeds at N197 to the dollar as directed by the CBN. The price of a tonne of cocoa beans has increased by 20.6 per cent from N580,000 in 2014 to N700,000 as of December 2015.
  • Seriake Dickson of the PDP has been declared winner of the Bayelsa State governorship election by INEC. Dickson won seven out of the eight local governments in the South south state defeating Timipre Sylva of the APC after a keenly contested election. Dickson polled 134,998 votes to emerge winner, while Sylva scored 86,852 votes.
  • The BUA Group has announced the divestment of its flour business to Olam International in a deal worth $275 million. Speaking at the signing ceremony over the weekend, BUA’s founder, Abdulsamad Rabiu said, “This signing marks a major milestone in our medium term strategy. Over the years, we have run one of the largest and most efficient flour milling businesses in Nigeria and are confident in the value it will add to the buyer’s operations. Our Group’s strategic focus will now be to diversify to business areas with greater potential for export where the sourcing and utilisation of foreign exchange is less and most of the materials needed for production can be sourced locally whilst also positioning our current line of Foods and Infrastructure businesses for market leadership.”