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Maize, paddy rice prices to rise in 2024 – AFEX

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AFEX has projected that the prices of maize and paddy rice will rise by 25 per cent and 40 per cent, respectively, in Nigeria this year.

The forecast was contained in the report which was released on Wednesday in Lagos.

In 2023, maize prices fluctuated greatly, reaching a peak of N550,000/mt in Q3 and closing the year at N480,000/mt.

The increase was attributed to decreased input usage and the fallout of the Russia-Ukraine crisis impacting fertiliser prices.

AFEX also expected key export commodities like cocoa and sorghum, which were projected to rise by 50 per cent and 20 per cent respectively, in the domestic market, underpinned by 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.

“In managing the complexity of these factors, there is a pressing need to enhance domestic agricultural production, streamline trade policies, and establish strategic reserves to cushion against market volatility and ensure food security. Similarly, there perhaps isn’t a better time to look to alternative investments as a hedge against potential windfalls than now.”

 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. Agriculture commodities witnessed price surges with the greatest factor responsible being supply shortage due to low production and increased international demand.

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