News in brief:
-Â AFEX forecasts significant domestic price increases maize, cocoa, sorghum and paddy rice in Nigeria for 2024, blaming factors like reduced input usage and the lingering impact of the Russia-Ukraine conflict.
– The global outlook for food prices is a bit positive as it foresees an overall decline in commodity prices because of favourable crop conditions, policy adjustments, and lower input costs.
Commodities exchange platform, AFEX, forecasts significant price increases for maize and paddy rice in 2024, with estimates of 25% and 40% respectively.
Its projection comes amidst a complex global and domestic agricultural landscape marked by various factors influencing market trends.
Maize prices, which fluctuated heavily in 2023, reached a peak of â¦550,000/mt in Q3. The prices are also expected to continue their upward trajectory in 2024, according to the company. It attributes this surge primarily to reduced input usage, and the lingering impact of the Russia-Ukraine conflict.
The report also predicts hikes for key export commodities like cocoa and sorghum. While cocoa prices are projected to increase by 50% due to declining production, sorghum prices are estimated to rise by 20% on the back of lower output levels.
As AFEX anticipates domestic price increases for certain commodities, the global outlook seems slightly different. For example, according to the Food Price index of the Food and Agriculture Organization (FAO), there was an overall decline in global commodity prices in 2023.
The World Bank projects a downward trend of food prices in 2024, due to factors like improved supplies, favourable crop conditions, policy adjustments, and lower input costs. It projects a decrease of 2% in 2024 and 3% in 2025, contingent on de-escalation in the Middle East.
Meantime, AFEX Vice President of Financial Markets, Oluwafunto Olasemo, emphasised the need for adaptability and vigilance in the face of these intricate market dynamics. She highlighted key actions for stakeholders such as enhancing domestic agricultural production and streamlining trade policies, establishing strategic reserves and exploring alternative investments.
Ultimately, the report recommends adopting sustainable farming practices such as diversified crop rotation to optimize soil health, increase productivity, and ultimately improve farmer income.
