AFEX, Africa’s fastest growing commodities player, has released its 2023 Crop Production report, forecasting a rise in commodity prices due to declining production and increasing demand for processing and exports.
The report focused on six key commodities: maize, paddy rice, soybean, sorghum, cocoa, and sesame. It drew on data from farmer surveys and transaction-level data to provide a comprehensive overview of crop production, price trends, and market dynamics.
AFEX projects that the prices of all six commodities will rise, with paddy rice leading the pack, experiencing a 34% price increase in the 2022/2023 season. The factors driving this increase include increased flooding in major rice-producing states in Nigeria, such as Kebbi, Jigawa, Kano, and Bauchi, as well as the rice ban in India, which has caused a surge in global demand for the commodity. Additionally, the report notes that the increased cost of production due to the rising price of inputs such as fertilizers, pesticides, and seeds will further drive up commodity pric
According to the report, the current base price of N353,000 per metric tonne (MT) is expected to rise to N400,000/MT by the third quarter of 2023 and stabilise at N480,000 to N500,000/MT by the end of the year. This is due to several factors, including the lag in government support programmes, high cost of production, high cost of diesel, and rising input costs. These challenges are expected to put pressure on rice farmers, who may be unable to produce at full capacity and may need to raise prices to cover their costs.
The report notes that food insecurity is worsening in Nigeria, with the country facing a food shortage of 5.7 million metric tonnes across both human consumption and agro-processing. This shortage is exacerbated by rising inflation, which reached a historic high of 30.64 per cent recently.
AFEX also highlights Nigeria’s poor ranking on the Global Hunger Index, at 109th out of 125 countries. This underscores the severe food security crisis in the country and the urgent need for solutions to address the issue.
The report points out that the surge in food prices will exacerbate the challenges of food insecurity and poverty in Nigeria, making it difficult to achieve the United Nations’ Sustainable Development Goal of Zero Hunger by 2030.
Speaking at the launch event in Abuja, Akinyinka Akintunde, the President and CEO of AFEX Nigeria, emphasised the need for significant investment in the agricultural sector in order to address the infrastructure, logistics, and technology gaps that are hampering the sector’s growth. He stated that the sector has the potential to play a significant role in diversifying the economy and achieving food security. Akintunde also highlighted the importance of creating an enabling environment for farmers and agricultural businesses to thrive.