Africa’s leading commodities player, AFEX, unveiled its 2023 Crop Production report in Abuja on Thursday, predicting a surge in commodity prices attributed to declining production and rising demand for processing and exports.
The comprehensive report, which focused on six key commodities (Maize, Paddy Rice, Soybean, Sorghum, Cocoa, and Sesame), utilized farmer surveys and transaction-level data measurements to provide crucial insights into crop production, price trends, and market dynamics.
AFEX anticipates an increase in prices across all commodities, with Paddy Rice experiencing a notable upswing of 34% in the 2022/2023 season. Factors contributing to this surge include increased flooding and the India rice ban.
The baseline pricing of N353,000/mt (per metric ton) is expected to rise to N400,000/mt and stabilize at N480,000 to N500,000/mt by Q3 2023, the report noted.
Highlighting food insecurity and a historic high food inflation rate of 30.64%, the report identifies a 5.7 million metric ton shortage in Nigeria across human consumption and agro-processing.
Nigeria’s Global Hunger Index score remains at 109th out of 125 countries, underscoring a severe food security crisis.
AFEX Nigeria’s President/CEO, Akinyinka Akintunde, emphasized the need for substantial investment in the agricultural sector, addressing infrastructure, logistics, and technology gaps.
The report suggests that the surge in food prices witnessed in the 2023 season will exacerbate these challenges, hindering progress towards achieving Zero Hunger by 2030.
Federal Government Revokes 1,633 Mineral Titles Over Non-payment
In a significant move to enforce compliance and revitalize the solid minerals sector, the Federal Government through the Ministry of Solid Minerals Development has taken decisive action by revoking 1,633 mineral titles previously granted to non-compliant mining companies.
The announcement was made by the Minister of Solid Minerals Development, Dele Alake, during a press briefing in Abuja.
The revocation of these mineral titles was a result of the mining companies’ failure to fulfill their mandatory annual service fees of N1,500 per cadastral unit.
Alake emphasized that the move aligns with Sections 10, 11, and 12 of the Mining Act, and it is aimed at creating opportunities for potential investors willing to contribute to the sector.
Expressing disappointment at the non-compliance of mining firms, Alake stated, “It is indeed very unconscionable for corporate bodies making huge profits from mining to refuse to give the government its due by failing to pay their annual service fee.”
The minister stressed that the mining companies, despite reaping significant profits from mining activities, failed to meet their financial obligations to the government.
He further highlighted the nominal nature of the annual service fee, emphasizing that it pales in comparison to the revenue projections of these companies.
The revocation process, initiated by the Mining Cadastral Office on October 4, 2023, targeted a total of 2,213 titles, including Exploration titles, Small Scale Mining Licences, Quarry licenses, and Mining Leases.
The notice of revocation was published in the Federal Government Gazette on October 10, 2023.
Alake cautioned those whose licenses had been revoked to vacate mining sites promptly to avoid potential legal actions by security agencies.
The ministry’s commitment to cleaning up the sector for international competitiveness was underscored, signaling a new era for responsible and compliant mining practices in Nigeria.
Rising Rice Consumption Spurs 37% Price Surge, Reveals AFEX Report
A recent report by AFEX, the agricultural commodity trading firm, has brought to light the surge in rice consumption in Nigeria.
The AFEX Wet Season Crop Production Report for 2023 indicates that the country’s rice consumption has been steadily increasing, contributing to a consistent growth in the rice market.
The report highlights a 37% year-to-date increase in the price of rice in 2023.
According to AFEX, despite Nigeria’s potential to be a net rice exporter, it has spent over $15 billion in the past decade to meet the expanding demand for rice.
Globally, rice prices have reached their highest point in nearly 12 years due to factors such as India’s ban on rice exports and potential production disruptions from El Nino in key regions.
In Nigeria, the 37% price surge is attributed to reduced production in 2022 caused by flooding during the wet season.
The report anticipates a 4% increase in rice production and expects the price of paddy rice to rise by around 32%.
While the Northwest region accounts for 72% of the total rice production in Nigeria, the report underscores the need for strategies to bridge the supply gap and ensure sustainable rice production to meet the growing demand in the country.
Oil Marketers Forced to Sell Stations Amidst Fuel Scarcity and High Costs
Nigeria’s oil marketers, particularly members of the Independent Petroleum Marketers Association of Nigeria (IPMAN), are increasingly divesting from their filling stations due to the ongoing scarcity of Premium Motor Spirit (PMS), commonly known as petrol.
The combination of fuel scarcity and the rising costs of procuring products from private depots has pushed many marketers to the brink, making their operations unsustainable.
Members of the Major Oil Marketers Association of Nigeria (MOMAN), with fewer operational stations in urban areas, have been less affected.
Meanwhile, IPMAN boasts over 3,000 stations spread across the country, including remote areas.
The situation has arisen due to the Nigerian National Petroleum Company Limited (NNPCL) reducing its product supply to IPMAN members as a result of the fuel scarcity.
NNPCL, the sole importer, sells PMS to the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) at an official price of N556 per litre, which is then sold to IPMAN at N616 per litre.
This results in retail prices of around N630 per litre when additional transportation and charges are factored in.
Inflation and reduced patronage have further compounded the financial strain on IPMAN members, leading to the closure of many filling stations. Additionally, banks are hesitant to extend loans to these businesses.
The hurdles in the supply chain are driving some marketers to sell their stations to better navigate the challenging economic landscape.
The future of Nigeria’s fuel market remains uncertain, with increasing costs, inflation, and fluctuations in global oil prices complicating matters.
However, the NNPC has asserted that the downstream sector is now deregulated, leaving marketers to procure fuel independently.
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