AFEX forecasts 3% increase in Nigeria’s maize production

AFEX, one of Nigeria’s leading commodity players, has predicted that maize production will rise by 3 percent.

The commodity exchange firm disclosed this on Tuesday at the unveiling of its 2021 crop production report.

AFEX said its 2021 crop production report was developed by surveying over 10,000 farmers and tracking market prices across over 200 markets in the country.

The report focused majorly on the impact of land usage, inputs, weather, and subsequently, and the output expectations of farmers on production levels.

According to the report, maize, which is the most widely planted cereal crop in the world, is particularly vulnerable to demand pressures, which have been signalled to exceed supply levels in the season and could result in increased prices.

“We forecast a higher base price of N170,000 against N156,000 in 2020. By Dec 2021, maize price should settle between N170,000/ metric tons (MT) to N180,000/MT,” the report reads.

“During the season, May/June, we expect the price should be between N210,000/MT to N230,000/MT.

“The CBN’s intervention in the industry should weigh on price pressure this season.”

Similarly, soybean is anticipated to grow by eight percent as against 2020 numbers while sorghum and paddy rice is projected to grow by two percent and 10 percent, respectively.

Ginger is also predicted to see a four percent increase in production levels and sesame production is expected to increase significantly by 12 percent.

AFEX said both production levels and price forecasts are expected to take an upward trend for the bulk of commodities included in the report as against the numbers recorded at the same time last year, early in the season.

The report, however, projected an eight percent decline in cocoa production.

It said there would also be a “significant pressure on cocoa price due to low supply”, driven by prolonged rains in Nigeria.

“We forecast cocoa prices to settle around NGN1.3 million/MT to NGN1.350 million/MT by Q4 2021,” the report reads.

The price forecasts for most commodities that were featured in the report were shown to be on the rise with analysts, who discussed the findings at the unveiling event, revealing a myriad of factors for the increase.

The key factor considered was the difference in aggregate demand and supply for the commodities as well as key macro events likely to drive prices.

Commenting on the report, Akinyinka Akintunde, AFEX’s chief operating officer, said: “This year’s report shows real optimism among farmers which is great for the industry. Across all commodities surveyed, we noticed a marginal increase in production volumes, despite a higher-than-average price of key inputs.

“This increase, however, was not sufficient to topple the upward trend of commodities prices. As such, we expect prices of commodities to start from a higher base when compared to the previous year.”

Akintunde explained that AFEX’s mission is to fill the data gap in the sector, enabling policymakers, producers, and key stakeholders to predict future agricultural yields, output, and eventual pricing.