NNPC might halt production if price drop persists
The Nigerian National Petroleum Corporation (NNPC) has indicated that it will stop producing crude oil, if prices continue to fall. The average cost of oil production in Nigeria is $22 per barrel. However, Nigeria’s benchmark crude grade, Bonny Light, traded at $15 per barrel yesterday. There is room for optimism as the price of crude oil is expected to rise as more countries ease their lockdown restrictions.
World Bank records decline in Q1 Commodity prices
In its April 2020 Commodity Market Outlook, the World Bank recorded that almost all commodity (energy and non-energy) prices witnessed a sharp decline in 2020 Q1. This was due to the economic impacts of the global lockdown. Almost all food prices fell with cocoa dropping by 14%. This is expected to reduce revenues during the mid crop harvest season, which runs from April-June and makes up 30% of total cocoa output.
Nigerian Breweries 2020 Q1 report
Nigerian Breweries Plc, makers of Gulder, Star, & Heineken, recorded a Profit after Tax of ₦5.5 billion in Q1, - 31% lower than the ₦8 billion recorded in the same period last year. Although this decline is due to increased expenses in marketing, distribution & administration, the prolonged COVID-19 lockdown might have a bigger impact on the brewer in Q2. Other beverage companies such as Nigerian Bottling Company (NBC) recorded losses directly pertaining to the closure of away-from-home channels like bars.