The Central Bank of Nigeria (CBN)’s restriction on 41 items banned from its official foreign exchange window is currently hurting importation of palm oil from Thailand, New Telegraph has learnt.
Thailand is facing glut in its palm oil market due to low demand from Nigeria. Nigeria is among the top five markets for Thailand and Indonesian crude palm oil before the apex bank rolled out its forex policy on some imported items.
It was gathered that efforts by Thailand to team up with the European Union, the US, Norway and Japan and ask Nigeria to lift its foreign currency restrictions on certain imports has not yielded result.
Other exporters of palm oil to Nigeria are Indonesia and Malaysia, which are also affected by CBN’s policy adversely.
In June 2015, CBN excluded importers of 41 goods and services from accessing foreign exchange at Nigerian foreign exchange markets in order to encourage local production of those items.
But at a meeting of the Council for Trade in Goods under the World Trade Organisation (WTO), it was learnt that Thailand had raised the CBN issue on the 41 items with some WTO members, including the European Union, Norway, the United States and Japan.
Thailand said the apex bank’s restrictions did not comply with the commitments given by Nigeria to the WTO.
Also affected by the restriction are vegetable oils, vegetables and processed vegetable products among other goods.
It was learnt that manufacturing firms in Nigeria, which depend on cheap imported palm oil from Thailand, Malaysia and Indonesia due to high price of the commodity in the country, are also finding it difficult to source foreign exchange to bring the commodity to the country.
Nigeria has been facing low production in the last one decade due to high demand by manufacturers. Investigation by this newspaper last February, showed that the price of the commodity, which was N250,000 per ton in 2016, has risen to N1.3 million per ton due to short supply and recession in the country, while global price of the commodity was $979 (N372, 020) per ton.
Findings from Lagos Port Complex revealed that the country took delivery of 600,000 tons between January, 2016 and January, 2017 to consolidate the 970,000 tons produced in the country annually.
Between January and April, 2017, only 50,010 tons of palm oil was shipped to the country due to lack of forex. In January, SeaPrice ferried 15,000 tons to Lagos Port Complex; Chemtrans Havel, 10,700 tons last February; Star Ploeg, 16,400 tons in March and Mid Nature, 8,000 tons in April 2017.
It would be recalled that Nigeria, which was the largest producer of palm oil in the world with a market share of 43 per cent in the 1960s now has a world share of 2.9 per cent, with Indonesia leading with 33 million metric tons; Malaysia, 19.8 million metric ton; Thailand, two million; Colombia, 1.108 million metric tons and Nigeria, 970,000 metric tons.
Tincan Customs chief to implement 48-hour cargo clearance
Customs Area Controller (CAC), Tin Can Island Port Command, Musa Baba Abdullahi has reiterated the command’s unshaken commitment to achieve 48hour cargo clearance from the port without compromising revenue collection and national security.
The customs chief said efforts are being put in place to maximise benefits of technology and build the command’s manpower to meet with the growing challenges of modern trade.
While addressing maritime journalists in his Apapa office, Musa identified swift dispute resolution as a key component to facilitate trade. He said the command has put in place a faster mechanism to address any area of disagreement in interpretations of guidelines for duty collection and other related matters.
He added that a committee put in place for disputes resolution meets as soon as any dispute arises to avoid port users incurring costs caused as a result of delays in resolving such disputes.
According to him, there is a quicker process of bringing issues to his attention and contacting the headquarters where necessary to avoid delays associated with such disagreements. He said the command has stepped up efforts at keeping officers and relevant stakeholders abreast with the use of technology for the purpose of customs operations.
The Controller disclosed that senior officers and licensed customs agents are being trained at the command’s Information Communication Technology (ICT) Centre on the latest Nigeria Customs Information System (NICIS 2) in batches.
Musa said the training and retraining of customs personnel and stakeholders will continue with a view to getting as many persons as possible knowledgeable in the workings of the system.
He also stressed the need for all stakeholders to increase their levels of compliance with rules and improve on their knowledge as ways of achieving seamless flow of trade thereby achieving faster clearance of goods from the port.
The Controller also advised the maritime media to uphold the ethics of their profession and be fair and truthful in all they do.
Early rainfall to boost Nigeria’s cocoa mid-crop
Nigeria’s mid-crop cocoa output for 2017/18 could rise by 15 per cent from last season, helped by a mix of rainfall and sunshine in the main growing regions which has helped the trees, President of Cocoa Association of Nigeria (CAN) Sayina Riman said in a recent interview with Bloomberg.
Drought cut last season’s mid-crop harvest by 40 per cent. The dry weather continued into the main crop of the new season.
Riman said the drought affected the trees, reducing output of between 300,000 tonnes and 320,000 tonnes projected at the beginning of the 2017/18 season.
He said that early rains in March and April have helped boost the mid-crop, which could see the season’s output close at around 290,000.
Riman farms on a 170 hectare cocoa plantation in Nigeria’s second-biggest region of Cross Rivers.
The cocoa season in Nigeria runs from October to September, with an October-to-February main crop and a smaller light or mid-crop that begins in April or May and runs through September.
“Despite the drought of last year which affected cocoa we believe we would be close to 290,000 tonnes for 2017/18 season,” Riman told Reuters.
The International Cocoa Organisation (ICCO), however, gives much lower estimates of Nigerian cocoa output. It forecast last season’s production at 225,000 tonnes.
Riman did not give a reason for the discrepancy. Nigerian government production figures are also significantly higher than ICCO estimates.
Nigeria has recently emerged from recession and a currency crisis which caused a chronic dollar shortage, forcing exporters to under-invoice their goods in order to use the foreign exchange black market to get premium for their hard currency.
The action caused the West African country slip to the sixth producer of cocoa in the world at the peak of the crisis. Riman said Nigeria was getting back to number four grower as exporters now use the official currency markets.
Riman said Nigeria was working on improving its bean quality especially with renewed demand from Europe.
However, bean count, a measure of the number of beans needed to produce 100 grams of cocoa, reached as high as 140 for the main crop.
Rising Nigerian bonds drags yields down
Nigeria’s local-currency bonds are on a roll, rising for the last eight days and driving their yields below Turkey’s for the first time in more than two years.
The average rate on Nigerian government bonds has fallen around 400 basis since an August-peak to 13 per cent. Yields are now 100 basis points below the Central Bank of Nigeria’s benchmark interest rate of 14 per cent, where its been held since July 2016.
Investors have piled into the naira market thanks to slowing inflation, a stable currency and rising Brent crude prices, which climbed about 25 per cent in the past six months to more than $70 a barrel. In contrast, they’ve turned bearish on Turkey, which has the worst-performing local bonds in emerging markets this year, because of accelerating inflation and loose monetary policy.
Central Bank Governor, Godwin Emefiele, may be tempted to commence his long-touted easing cycle and help revive the economy that has faltered since the 2014 oil crash. While that would reduce the attractiveness of naira assets, Nigerian yields are still high relative to other major emerging markets. Aside from Turkey, Argentina and Egypt’s bonds are the only ones to yield more in the Bloomberg Barclays EM Local Currency Index.
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