By Faridat Salifu
In a new report, AFEX, a prominent commodities exchange in Nigeria, has projected substantial price increases for maize and paddy rice in 2024.
The forecast, unveiled in Lagos recently , anticipates a 25% surge in maize prices and a substantial 40% increase in paddy rice prices.
The previous year saw significant fluctuations in maize prices, with peaks reaching N550,000/mt in the third quarter before closing the year at N480,000/mt.
AFEX attributes these changes to reduced input usage and the impact of the Russia-Ukraine crisis on fertiliser prices.
Furthermore, AFEX expects key export commodities such as cocoa and sorghum to experience price hikes of 50% and 20%, respectively, in the domestic market. These increases are attributed to declining production levels.
Globally, the report predicts a downward trend in commodity prices for 2024, influenced by factors such as improved supplies and the expiration of certain trade policies.
Energy prices are projected to drop by 5% in 2024, with a further decrease of 0.7% forecasted for 2025.
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Agricultural commodities are expected to see a 2% reduction in 2024 and a 3% decrease in 2025, contingent on the de-escalation of the Middle East conflict.
Oluwafunto Olasemo, Vice President of Financial Markets at AFEX, emphasized the importance of the outlook in guiding trading flows and movement across both physical and secondary market players.
He acknowledged the complexities of balancing geopolitical, economic, and environmental factors in the commodities market and stressed the need for enhancing domestic agricultural production, streamlining trade policies, and establishing strategic reserves to mitigate market volatility and ensure food security.
The report also advocates for the adoption of sustainable farming practices like diversified crop rotation to optimize soil capacity and boost productivity, which can increase farming income by 21%.
A review of the past year revealed global market turbulence due to shocks across energy scarcity, geopolitical tensions, and financial crises.
Despite these challenges, the global commodities market saw a 24% decline from its peak in 2022.
In Nigeria, however, the market faced the trickle-down effects of inflation and economic reforms, resulting in a growth rate of only 0.63% in the first three quarters of 2023 anotable decrease from the growth rate of 1.90% over the same time in 2022.
Nigerian agricultural goods saw price increases mainly as a result of rising demand from outside and shortfalls in supply.
