AFEX predicts higher prices for maize, rice in Nigeria 2024

NIGERIA – AFEX, a leading commodities market player, has projected an increase in maize and paddy rice prices by 25% and 40%, respectively, within Nigeria in 2024. .

The forecast was contained in the report released on Wednesday, January 25 in Lagos.

The report noted that the price of maize in Nigeria has been highly volatile, reaching a high of N550,000 (US$612) per metric tonne in the third quarter of 2023, before falling to N480,000 (US$534) per metric tonne by the end of the year. 

The increase was attributed to reduced input usage and the impact of the Russia-Ukraine crisis on fertiliser prices.

AFEX also anticipated that key export commodities like cocoa and sorghum would rise by 50% and 20% respectively in the domestic market due to declining production.

On the global scene, 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 significantly influenced by numerous factors, each capable of either posing a downside or upside risk to 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, Vice President of Financial Markets, AFEX, Oluwafunto Olasemo, said “The outlook is an indispensable 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 complex balance amidst geopolitical, economic, and environmental factors, which will on one hand demand continual monitoring and strategic adaptation, and the other spur vigilance on the part of market stakeholders and policymakers.

Olasemo stated that the commodities market will face a complex and challenging landscape in 2023, with a variety of geopolitical, economic, and environmental factors impacting the market.

On the one hand, she noted that market participants and policymakers will need to be vigilant and adapt their strategies accordingly. On the other hand, she said that the ongoing challenges will also present opportunities for innovation and growth.

The report recommended the adoption of “sustainable farming practices such as diversified crop rotation, which serves to optimise soil capacity and increase productivity, which in turn has been seen to boost farming income by 21 per cent”.

A review of the past year showed that globally, the commodities market was marked by turbulence, owing to global shocks across energy scarcity, geopolitical tensions, financial crises and more. However, despite those challenges, the global market witnessed a 24 per cent decline from its peak in 2022.

The Nigerian commodities market on the other hand faced trickle-down effects of inflation, and economic reforms, which pegged the growth in the first three quarters of 2023 at 0.63 per cent, a sharp decline from 1.90 per cent in the same period of 2022.

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