Commodities exchange AFEX sees demand push grain prices higher next year

Production levels are to jump but that won’t force prices down, the firm forecasted at a webinar on outlook for four grains, cocoa and ginger for the year ahead, using data from a survey that interviewed farmers.

“Across all commodities surveyed, we noticed a marginal increase in production volumes, despite a higher-than-average price of key inputs,” Chief Operating Officer Akinyinka Akintunde said.

“This increase, however, was not sufficient to topple the upward trend of commodities prices.”

The Abuja-based firm spotlighted maize to become particularly prone to demand pressures on account of its stature as the most cultivated of all cereals in the world and considering that production will likely rise by only 3 per cent.

Owing to Nigeria’s unusually long rainy season this year, cocoa’s availability in the market could be threatened and that might push prices up to anywhere from 1.3 million/MT to 1.35 million/MT between October and December this year.

The survey, which involved 10,000 farmers and monitored price trends in markets numbering more than 200, forecasted soybean production to jump by 8 per cent, paddy rice by 10 per cent, Sorghum 2 per cent and ginger 4 per cent.

“We forecast a higher base price of N170,000 against N156,000 in 2020. By Dec 2021, maize price should settle between N170,000/MT to N180,000/MT,” it stated.

“During the season, May/June, we expect the price should be between N210,000/MT to N230,000/MT.”

AFEX, which offers solutions that enable it to have direct interaction with farmers in a bid to meet their needs, launched in 2014 with a view to deploying a robust commodities exchange model for the West African market.

It has stated a grand ambition to facilitate trade in the region to the tune of half a billion by 2026.