AFEX Predicts Surge in Commodity Prices as Crop Production Declines

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.