• Wednesday, June 19, 2024
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Nigeria sugar imports to fall on oil plunge

FG looks to sugar production for foreign exchange, job creation

Oil-producing nations from Iran to Nigeria and Russia will cut sugar imports this year as lower crude prices curb their ability to obtain dollars to make payment, according to Claudiu Covrig, an analyst at McGraw-Hill Financial Inc.’s Platts Kingsman.

Nigeria’s overseas purchases will decline to 1.65 million tons in 2015 from 1.75 million tons over the same period last year.

In Russia, raw sugar imports will probably slump to 480,000 metric tons in the 12 months ending September 30, from 750,000 tons a year earlier, Covrig said in an interview in Dubai, at the Platts Kingsman sugar conference.

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Commodities are mostly traded in dollars, meaning buyers need the US currency to make payment.

Brent crude slumped almost 50 percent last year as supplies exceeded demand and the Organisation of Petroleum Exporting Countries maintained its output target of 30 million barrels a day.

“The low oil price is already hitting import demand,” Covrig said, saying “it’s not only about sugar.”

Iran’s sugar imports are seen dropping to 1.25 million tons in 2014-15 from 1.57 million tons, while in the Persian Gulf areas, including the United Arab Emirates, purchases are forecast to drop to 1.84 million tons from 2.4 million tons, according to Covrig.

Saudi Arabia, the biggest oil exporter, will purchase 870,000 tons of raw sugar from overseas, down from 1.1 million tons a year earlier, he said.