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AFEX Predicts Higher Commodity Prices in 2024 Amid Food Inflation Concerns

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AFEX

CEM REPORT, AGROFOOD | Nigeria’s leading commodities exchange, AFEX, has released its 2024 commodities outlook, forecasting a consistent rise in the prices of domestic and export commodities due to supply and demand factors.

The outlook, which covers key commodities such as cocoa, sorghum, maize, and paddy rice, projects that cocoa and sorghum prices will increase by 50 per cent and 20 per cent respectively, as production declines due to aging trees, pests, diseases, and climate change. On the other hand, maize and paddy rice prices are expected to increase by 25 per cent and 40 per cent respectively, despite a projected 4.0 per cent increase in paddy rice production, as demand outstrips supply.

The Vice President of AFEX for Financial Markets, Ms. Oluwafunto Olasemo, said that the outlook aims to provide information to the market on the price trends of these commodities, both locally and globally, while also highlighting the events that could affect them.

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“The outlook is a valuable tool for farmers, traders, processors, investors, and policymakers, as it helps them to plan ahead and make informed decisions based on data and analysis,” she said.

She also identified food inflation as one of the major drivers of inflation in Nigeria, which reached a record high of 18.2 per cent in December 2023, according to the National Bureau of Statistics. She advised the government to intensify efforts at combating post-harvest losses, which account for over 50 per cent of food losses in the country.

“Food inflation is a serious challenge that affects the welfare of millions of Nigerians, especially the poor and vulnerable. To tackle this problem, the government needs to invest more in improving the storage, processing, and transportation infrastructure of the agricultural sector, as well as providing incentives and support to farmers to adopt best practices and technologies,” she said.

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She added that Nigeria needs to increase its level of productivity to meet the ever-increasing net demand for staple commodities, which is driven by population growth, urbanization, and changing consumption patterns.

“We are at a supply deficit, meaning that if nothing is done to close that gap, food prices will continue to skyrocket. There will always be pressure on food prices, so to address food inflation, there has to be a deliberate effort to address the key issues affecting productivity, such as post-harvest losses, access to finance, input quality, and market linkages,” she said.

About AFEX

AFEX, which was established in 2014, is Nigeria’s first private sector-led commodities exchange, offering services such as warehousing, collateral management, trading, clearing and settlement, and market information. It has over 160,000 farmers registered on its platform, and has traded over 200,000 metric tons of commodities worth over N20 billion.

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