Emmanuel OchayiAFEX, a leading commodities market player, has projected an increase in maize and paddy rice prices by 25% and 40%, respectively, within Nigeria this year.
The forewarning, unveiled in a report on Wednesday in Lagos, stems from the fallout of the Russia-Ukraine crisis affecting fertilizer prices and diminished input usage.
Reflecting on 2023, maize prices experienced volatility, peaking at N550,000/mt in Q3 and concluding the year at N480,000/mt. AFEX anticipates similar tumult in 2024, asserting that cocoa and sorghum, essential export commodities, will surge by 50% and 20%, respectively, due to declining production.
READ ALSO: Nigeria, Other West African Countries To Endure Soaring Food Prices In 2024 – Report
On a global scale, the report suggests a downward trend in commodity prices for 2024, citing factors like improved supplies and expiring trade policies.
Despite this, the direction may be influenced by geopolitical events, offering both downside and upside risks. Energy prices are expected to decrease by 5% in 2024, with a further 0.7% drop in 2025, while agricultural commodities are projected to decrease by 2% and 3% in the respective years, contingent on de-escalation of the Middle East conflict.
Vice President of Financial Markets, AFEX, Oluwafunto Olasemo, emphasized the indispensable role of the outlook in dictating trading flows. Olasemo called for a strategic approach, emphasizing the need to enhance domestic agricultural production, streamline trade policies, and establish strategic reserves to ensure food security amidst market volatility.
The report also advocates sustainable farming practices, such as diversified crop rotation, to optimize soil capacity and boost farming income by 21%. Globally, the commodities market faced turbulence in 2023, marked by energy scarcity, geopolitical tensions, and financial crises, resulting in a 24% decline from its peak in 2022.
In Nigeria, the commodities market grappled with inflation and economic reforms, with agriculture commodities witnessing price surge due to low production and increased international demand. The growth rate in the first three quarters of 2023 plummeted to 0.63%, a stark decline from 1.90% in the same period of 2022.
