AFEX forecasts that maize and paddy rice prices in Nigeria will climb by 25% and 40%, respectively, this year.
The forecast was included in the report, which was released on Wednesday in Lagos.
Maize prices fluctuated substantially in 2023, peaking at N550,000/mt in Q3 and closing at N480,000/mt.
AFEX also predicted that key export commodities such as cocoa and sorghum would grow by 50% and 20%, respectively, on the domestic market, supported by decreased production.
The increase was ascribed to lower input utilization and the impact of the Russia Ukraine situation on fertilizer prices.
The report said, “Predictions for 2024 global commodity prices suggest a downward trend due to factors such as improved supplies and the expiration of certain trade policies. “However, the direction of this trend can be strongly altered by a number of factors, each of which has the potential to either lower or raise commodity prices.
“Energy prices are expected to drop by five per cent in 2024 and then further decrease by 0.7 per cent in 2025, while agriculture commodities are projected to decrease by two per cent in 2024 and three per cent in 2025, provided that the Middle East conflict de-escalates.”
Speaking at the event, the Vice President of Financial Markets at AFEX, Oluwafunto Olasemo, said, “The outlook is a crucial component of the commodities market, dictating trading flows and movement across the physical market and secondary market players.
“This year, the commodities market will see a delicate balance of geopolitical, economic, and environmental concerns, necessitating ongoing monitoring and strategic adaptation on the one hand and vigilance on the part of market stakeholders and policymakers on the other.
“To manage the complexity of these issues, there is an urgent need to increase domestic agricultural production, streamline trade rules, and develop strategic reserves to protect against market volatility and assure food security. Similarly, this may be the best moment to consider alternative investments as a hedge against potential windfalls.”
The paper advised the use of “sustainable farming practices, such as diversified crop rotation, which serves to optimize soil capacity and increase productivity, which has been seen to boost farming income by 21 per cent.”
A study of the previous year revealed that the commodities market was characterized by turmoil due to global shocks such as energy scarcity, geopolitical tensions, financial crises, and more. Despite these hurdles, the worldwide market fell 24 per cent from its peak in 2022.
The Nigerian commodities market, on the other hand, was hit by inflation and economic changes, with growth forecasted at 0.63 per cent in the first three quarters of 2023, down from 1.90 per cent in the same period in 2022. Agriculture commodities experienced price increases, with the primary cause being a lack of supply due to low production and increased worldwide demand.
