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Domestic prices of garri rose by 25% while prices of onions fell by 8.56% in March

The price of a 50kg bag of garri in the country increased to N20,000 from N16,000, while the price of onions dropped to N32,000 from N35,000 in March. The prices of these commodities were affected by the ongoing cash crunch in the economy, which is expected to keep prices volatile in the short term. The naira scarcity crisis would continue to undermine the purchasing power of consumers, which does not bode well for business activities.

Naira depreciates

The naira depreciated by 0.14% to N755/$ in the parallel market, compared to its close of N754/$ on March 7th. The depreciation of the naira could be attributed to the decline in the average daily turnover by 30% to $115.5mn in the I&E window, indicating lower forex supply. This, combined with elevated demand, would exert pressure on the naira in the near term.

Oil prices down for the third time

Oil prices fell below $83pb this week, losing 3.58% on fears that the US Federal Reserve will maintain its hawkish stance to taper inflation. This outweighed the improved demand outlook for China (major importer), heightening the risk of a global recession, which would further weigh on prices in the near term. This bearish outlook for oil will negatively affect Nigeria’s export earnings by approximately $35mn. A reduction in export earnings would deplete the already-falling external reserves and weaken the naira.

Meanwhile, LNG prices rose 3.33% to $2.64 due to the decline in US gas exports. However, this is currently 72.73% below their peak of $9.68 in 2022. We expect LNG prices to plunge on a milder weather forecast and lower demand from Europe (gas inventories are 59% full and about 19% above their five-year average).

The download gives a snapshot of the discussion in the commodities segment of the Business Morning Programme on Channels TV.

Enjoy your read!