Dangote refinery imports 4,000 gas-powered trucks for local fuel distribution
In June, the oil refinery said it will begin directly supplying fuel to retail stations, manufacturers, telecoms firms, and other large users in August, a move that could enhance supply but puts it in direct competition with local fuel traders.
Dangote's logistics expansion adds a new push to its market entry for its mammoth 650,000 barrels per day refinery, which is Africa's largest.
It said the trucks represent a 720 billion naira ($469.89 million) investment and that it will be rolled out on August 15.
Anthony Chiejina, Dangote Industries Limited's head of branding and communication, said the move will help the refinery cut logistics costs and improve supply directly to marketers.
Africa's top oil export has turned to gas as an alternative fuel after it scrapped a popular but costly subsidy on petrol that has seen pump prices rise sharply. But adoption is slow.
($1 = 1,532.2800 naira)
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Reuters
9 minutes ago
- Reuters
India's ethanol drive imperils its push for edible oil self-sufficiency
NASHIK, India, Aug 12 (Reuters) - India's drive to produce more ethanol is leading its farmers to switch away from growing oilseeds, undermining government efforts in the world's largest buyer of cooking oils to reduce costly imports. Helped by record corn and rice harvests, New Delhi is using more of the grains to make ethanol and meet its target of blending 20% of the biofuel additive with gasoline. The process, however, produces Distillers Dried Grains with Solubles (DDGS), a protein-rich byproduct that is flooding the animal feed market. The DDGS glut is weakening demand for oilmeals, depressing oilseed prices and prompting farmers in the South Asian nation to plant more corn and rice in place of soybeans and groundnuts - despite New Delhi's push to grow more of the oilseeds to ease imports. DDGS production in India has soared some 13-fold over the past two years to an estimated 5.5 million tons by 2025, according to industry officials. "DDGS is a pain in the neck," said Aashish Acharya, vice president at Patanjali Foods Ltd ( opens new tab, a leading soybean processor. "Feed makers are substituting oilmeals with DDGS since it is cheaper." The shift is visible in government sowing data. As of August 8, oilseed acreage - including soybean and groundnut - was down 4% from last year, while corn area jumped 10.5% to a record high. Madhukar Londhe, a farmer in Nashik in the western state of Maharashtra, said he had cut his soybean area to one acre from six, planting the rest with corn - which has the added benefit of providing fodder from its stalks for his five milking cows. Nearly two dozen farmers in the area that Reuters spoke to said they had made a similar switch. "Soybean prices were too low, so I couldn't even cover my costs in the past two years. Corn did better for me last year, so I've decided to grow more of it," Londhe said. The reduction in oilseed planting is a concern for a country that spent more than $17 billion on edible oil imports last year and is making concerted efforts to reduce that dependence. Rising demand for fried foods and sweets by a growing and increasingly prosperous population has driven consistent growth in edible oil consumption at 3%-4% annually, said B.V. Mehta, executive director of the Solvent Extractors' Association of India. Edible oil imports have climbed to 16 million tons in 2023-24 from 4.4 million tons two decades ago, making India the world's largest buyer of vegetable oils such as palm oil from Indonesia and Malaysia and soyoil and sunflower oil from Argentina, Brazil, Russia, and Ukraine. New Delhi aims to boost domestic edible oil production to 25.45 million tons by 2030–31 from 12.7 million tons now, enough to meet 72% of projected demand, an effort that Mehta said is being hindered by the surge in DDGS supply. A New Delhi-based senior dealer with a global trading house who declined to be named as he is not authorised to speak with media said he expects imports to rise above 20 million tons in six or seven years, due in part to the DDGS disruption. Given the tightening global supplies of edible oils, India's additional imports will drive prices even higher, said a Kuala Lumpur-based official with a leading palm oil-producing company. India, the No. 3 importer and consumer of crude, recently hit its goal of lifting ethanol blending in gasoline to 20%. Two years ago, before India began using corn and rice on a large scale due to short supply of its main ethanol feedstock sugarcane, its blending rate was just 12%. Even before rising ethanol production began to create excess DDGS, India struggled with surplus oilmeals. Per capita demand for animal feed is much lower than the global average as a significant portion of its 1.4 billion population is vegetarian for religious and cultural reasons and most meat-eaters do so only occasionally. That led India to export surplus oilmeals to countries such as South Korea, Vietnam, Thailand, and Bangladesh. However, oilmeal exports got tougher every year as prices rose in order to support oilseed farmers. This year, some countries that import Indian meal have committed to buying more from the U.S., meaning they will buy less from India, said a Mumbai-based dealer with a global trading house. Ajay Jhunjhunwala, an oil miller in Lucknow in northern India, estimates that of this year's DDGS output, only around half will be consumed domestically. Exports are growing but are still relatively small. India's DDGS exports surged to 354,110 tons last year from just 16,556 tons in 2022. Distilleries are trying to export the surplus to markets including Bangladesh and Vietnam - longtime U.S. DDGS customers. Millers and distillers are pushing for incentives to facilitate exports of both oilmeals and DDGS. India's Agriculture Minister Shivraj Singh Chouhan said in July the government would support oilseed farmers by procuring their harvest at a state-fixed price. The Indian government did not respond to a request for comment on rising supplies of DDGS. "DDGS has exaggerated the problem of surplus meal," oil miller Jhunjhunwala said. "Unless that problem is fixed, increasing domestic oilseed production and edible oil supplies is difficult," he said.
Reuters
3 hours ago
- Reuters
TRADING DAY Tariffs, CPI nerves soften sentiment
ORLANDO, Florida, Aug 11 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist World markets got the week off to a subdued start on Monday, although the Nasdaq nudged a new high, as a light earnings and data calendar allowed investors to digest the latest tariff-related news and look ahead to Tuesday's U.S. inflation figures. More on that below. In my column today I look at the blizzard of U.S. labor market data - often conflicting, sometimes distorted - and ask which number best shines a light through the fog. Could it now be continuing jobless claims? If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Tariffs, CPI nerves soften sentiment Wall Street closed lower on Monday, even as the Nasdaq touched fresh highs, with the latest news related to U.S. President Donald Trump's tariff war generally sapping risk appetite rather than strengthening it. Trump signed an executive order on Monday extending the China tariff deadline for another 90 days, with only hours to go before U.S. tariffs on Chinese goods were due to snap back to triple-digit rates. This came after a U.S. official told Reuters over the weekend that chip companies Nvidia and Advanced Micro Devices have agreed to give the U.S. government 15% of revenue from sales of advanced chips to China. The news was surprising and confusing. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" A rise for Nvidia shares this week would mark a record-breaking 12 consecutive weekly gains. The stock now accounts for 8% of the entire S&P 500 market cap, the biggest weight of any individual stock in the wider index since the data began in 1981, according to Apollo's Torsten Slok. The so-called "Magnificent Seven" megacap stocks, of which Nvidia is one, now account for a record 35.3% of the S&P 500's total market cap. The top 10 stocks make up a record 40% of the index's market cap. This concentration risk is nothing new, of course, but the steady advance deeper into uncharted territory is bound to unnerve some investors. Meanwhile, U.S.-Brazil relations show no sign of improving. Brazil's Finance Minister Fernando Haddad said on Monday that his virtual meeting with U.S. Treasury Secretary Scott Bessent scheduled for later this week has been canceled, a blow to Brasilia as it attempts to get the 50% tariff on many Brazilian exports to the U.S. reduced. Speculation continues to swirl around who Trump will nominate to replace Fed chair Jerome Powell, whose term officially ends next May. As of Monday, no fewer than eight names appear to be under consideration, according to media reports. The main economic indicators on Monday were from China, which showed producer prices fell more than expected in July and no change in consumer prices. Deflation still stalks China, in contrast to the U.S. where tariffs are putting upward pressure on prices. Attention on Tuesday turns to Australia, where the central bank is expected to reduce its cash rate by a quarter point to 3.60%, and then to CPI inflation figures for July from the U.S. Which data point may shine light through U.S. jobs fog? Amid a blizzard of contradictory signals, it's becoming increasingly difficult to get any visibility on the U.S. labor market. But of all the numbers that feed into the all-important unemployment rate, the one worth paying most attention to may be continuing weekly jobless claims. Federal Reserve Chair Jerome Powell has said that while he and his colleagues look at the "totality" of the data, the best gauge of the health of the labor market is the unemployment rate. That's currently 4.2%, low by historical standards, and consistent with an economy operating at full employment. But it is a lagging indicator, meaning that once it starts to rise sharply, the economy will probably already be in a very precarious position. And it is also being depressed by labor demand and supply factors unique to the U.S.'s current high tariff, low immigration era. Economic growth is slowing. Broadly speaking, it is running at an annual rate of just over 1%, half the pace seen in the last few years. Unsurprisingly, firms' hiring is slowing too. The latest Job Openings and Labor Turnover Survey, or JOLTS, showed hiring in June was the weakest in a year, while July's nonfarm payrolls report and previous months' revisions were so disappointing that President Donald Trump fired the head of the agency responsible for collecting the data. But the unemployment rate isn't rising, largely because firms aren't firing workers. Why? Perhaps because they are banking on tariff and inflation uncertainty lifting in the second half of the year. It's also possible that firms are still scared from the post-pandemic labor shortages. Whatever the reason, the pace of layoffs simply has not picked up, the monthly JOLTS surveys show. Layoffs in June totaled 1.6 million, below the averages of the last one, two and three years. Meanwhile, lower immigration, increased deportations, and fewer people re-entering the labor force are offsetting weak hiring, thus keeping a lid on the unemployment rate. The labor force participation rate in July was 62.2%, the lowest since November 2022. And what about weekly jobless claims, another key variable in the labor market picture? In previous slowdowns, rising layoffs would be reflected in a spike in the number of people claiming unemployment benefits for the first time. That's not happening either. Last week's 226,000 initial claims were right at the average for the past year, and only a few thousand higher than the averages over the past two and three years. "It's a low fire, low hire economy," notes Oscar Munoz, U.S. rates strategist at TD Securities. One high-frequency number that has gone under the radar, but which merits more attention is continuing jobless claims, which measures the number of workers continuing to file for unemployment benefits after losing their jobs. Rising continued claims suggest people actively looking for a job are struggling to get one, a sign that the labor market could be softening. That figure spiked last week to 1.97 million, the highest since November 2021, which in theory should put upward pressure on the unemployment rate. Using the 'stock' versus 'flow' analogy, continuing claims are the 'stock,' and weekly claims are the 'flow'. Everyone will have their own view on what's more important, but right now initial claims are offering no guidance while continuing claims are pointing to softening in the job market. Fed officials are on alert, but what would move them to cut rates? Munoz and his colleagues at TD Securities estimate that continuing claims of around 2.2 million would be consistent with an unemployment rate of 4.5%, a level of joblessness most economists agree would prompt the Fed to trim rates. That's also the year-end unemployment rate in the Fed's last economic projections from June, a set of forecasts which also penciled in 50 bps of easing by December. An unemployment rate of 4.4% would probably tip the balance on the Federal Open Market Committee, while 4.3% would make it a much closer call, perhaps a coin toss. Further muddying the picture, other indicators suggest the labor market is ticking along nicely. July's payrolls report showed that average hourly earnings last month rose at a 3.9% annual rate, consistent with the level seen in the past year. And the average number of hours worked was 34.3 hours, right at the mean for the past two years. These numbers and the JOLTS data are released monthly, and there will be one more of each before the Fed's September 16-17 policy meeting. But if the increased focus on the unemployment rate means investors want a more regular labor market temperature check, they should keep a close eye on weekly continuing claims. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
Reuters
4 hours ago
- Reuters
Dollar edges up with US inflation report on tap
NEW YORK, Aug 11 (Reuters) - The U.S. dollar firmed across the board on Monday, a day before the release of a U.S. inflation report that could help determine whether the Federal Reserve lowers borrowing costs next month. The dollar index was up 0.3% at 98.52 after last week's 0.4% fall. Against the yen, the U.S. currency traded at 148.085 , up 0.2%. Japanese markets were closed on Monday for the Mountain Day holiday. The euro was down 0.3% at $1.16123, while sterling was down 0.2% at $1.34335. "The buck is trading a little firmer against all peers, though the moves are overall modest in nature," said Michael Brown, market analyst at online broker Pepperstone in London. "A very modest hawkish repricing of Fed policy expectations appears to be helping the move along, likely driven by participants squaring up some positions ahead of the risk that tomorrow's CPI print presents," he said. The dollar softened last week as investors adjusted their expectations for interest rate cuts from the Fed after soft data on U.S. jobs and manufacturing. Fed officials have sounded increasingly uneasy about the labor market, signaling their openness to a rate cut as soon as September. Cooling inflation could cement bets for a cut next month, but if signs emerge that U.S. President Donald Trump's tariffs are fuelling price rises, that might keep the Fed on hold for now. "It's important to note ahead of tomorrow's data that the bar for a hawkish surprise is higher," said Francesco Pesole, FX strategist at ING. Pesole added that a 0.3% monthly rise in core CPI would give the Fed room to lower interest rates, given the deterioration in the labor market. Economists polled by Reuters expect core CPI to have risen 0.3% in July, pushing the annual rate higher to 3%. Money market traders are pricing in around a 90% chance of a rate cut next month, while 58 basis points of easing are priced in by year-end, implying two quarter-point cuts and around a one-in-three chance of a third. The dollar was little swayed by Trump signing an executive order extending a pause in sharply higher U.S. tariffs on Chinese imports for another 90 days, a move that some market participants said was expected. With the United States and China seeking to close a deal averting triple-digit goods tariffs, a U.S. official told Reuters that chip makers Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab had agreed to allocate 15% of China sales revenues to the U.S. government, aiming to secure export licences for semiconductors. The Australian dollar fetched $0.6515 , trading down 0.2% ahead of a rate decision on Tuesday, in which it is widely expected that the Reserve Bank of Australia will cut rates by 25 bps to 3.60%, after second-quarter inflation came in weaker than expected and the jobless rate hit a 3-1/2-year high. Cryptocurrencies rose, with bitcoin up 1.1% at $119,679, not far from its July 14 record of $123,153.22, after Trump's executive order on Thursday freed up cryptocurrency holdings in U.S. retirement accounts. Ether rose 1.9% to $4,298.23, its highest since December 2021.
