By Onome Amuge
The Nigerian local commodities market is expecting to see maize price drop to between N120,000 and N140,000 per tonne ($317-$369 per tonne at official central bank rate of N379=$1) in the coming days as the market gets set to receive some 300,000 metric tonnes of the commodity next month from strategic drivers in the supply chain.
- Vaccine Passports: Why the Market Should Decide
- Seplat kicks off capital market day in Lagos, London with name change
- Meet Damilola Awosusi: The size 4 petite EYDNE woman spurred by a…
- Health insurance market: Leadway’s disruptive plan to drive health penetration
- Heirs Insurance, Heirs Life plan to disrupt market begins with policy…
The price of the commodity currently stands at N155,000 per tonne, but observers say efforts to release thousands of tonnes into the market through the Central Bank of Nigeria-financed Anchor Borrowers’ Programme (ABP) and other channels will see that price drop significantly.
Edwin Uche, president of Maize Growers, Processors and Marketers Association of Nigeria (MAGPMAN), said he was optimistic about maize price falling to the range of N120,000 per metric tonne in the next couple of days.
The maize to be released was facilitated following a decision by the CBN, in partnership with the Nigeria Customs Service (NCS), in the last quarter of 2020, to ease import waivers to four agro-processing companies to enable them import 262,000 tonnes of maize to bridge the shortfall in production and augment local supply.
With the release of 300,000 metric tonnes in February 2021, it is expected that the prices of maize in the Nigerian market will drop significantly, thereby increasing demand for the crop and ultimately enhancing the gains of maize farmers.
As part of its financing framework, the CBN has reportedly facilitated the funding of maize farmers and processors through the ABP Commodity Association, private/prime anchors, state governments, Maize Aggregation Scheme (MAS), and the Commercial Agricultural Credit Scheme (CACS).
Confirming the release of credit to its members by the CBN, Bello Abubakar, president of the Maize Association of Nigeria (MAAN), disclosed that over 200,000 farmers have targeted producing over 25 million metric tonnes of maize in the 2020/2021 planting season.
According to him, the credit secured by the CBN are being distributed to members along the maize value chain, nation-wide. He expressed confidence that the support of the CBN would boost production and ultimately ensure availability as well as stability in the price of the commodity.
Abubakar also charged middlemen not to take advantage of the supply gap to hike the price of the grains, even as he assured that farmers would maintain reasonable prices. He equally enjoined the federal government to put in place mechanism to protect farmers from market triggered shocks
Speaking on the recent price hike of maize in the country, Abubakar, attributed it to the current shortfall in the quantity of maize available in the market, insecurity around the major maize producing belt of Niger, Kaduna, Katsina, Zamfara and some areas in Kano State. He further identified the activities of hoarders and middlemen who engage in hoarding of the grain.
Also noting the challenges encountered in the maize sector and the resultant price increase, Edwin Uche, president, Maize Growers, Processors and Marketers Association of Nigeria (MAGPMAN), a prime anchor under the maize production chain, noted that banditry, drought in some parts of the country in 2020 and activities of middlemen are responsible for the current high price.
He however asserted that the projected dry season farming which is first of its kind in the country, timely distribution of inputs to farmers and improved security, would go a long way to enhance production and ensure stability in price.
On his part, Ayodeji Balogun, CEO, AFEX Commodities Exchange Limited, another major stakeholder in the maize production chain, attributed the price hike to cash-flow problem of farmers which has compelled many farmers to resort to collecting cash from buyers ahead of production and resort to side-selling, especially across the borders with neighbouring countries due to higher prices.