AFEX Predicts Decline in Production of Grains in 2023

Oluchi Chibuzor

Amid concerns of an impending food crisis and global recession, AFEX Limited has predicted a decline in production of grain commodities.
AFEX in its annual commodity outlook, 2023, attributed the surge in food prices to the low production of maize, paddy rice, sorghum, and cocoa. 

According to the report, these commodities declined by an average of 11.5 per cent in the 2022/23 trading season due to price-induced low fertiliser usage because of the Russia-Ukraine war. 

It also noted that climate change realities such as flooding also had a significant effect on the market among other unfavourable conditions in the 2022/ 2023 trading season.

The Annual Commodities Outlook by AFEX also alludes to price pressures being exacerbated by the fact that 2023 is an election year, which could cause some market uncertainty. 

In his remarks, during the report launch, Head, Market Data and Research at AFEX, David Ibidapo, explained that, “Every year, AFEX reviews Nigeria’s commodity market and gives an in-depth analysis of the outlook for the new year. In the last 2 to 3 years, we have seen the commodities market susceptible to global shocks, as evidenced by the COVID-19 pandemic’s impact and the ongoing Russia-Ukraine crisis on supply chain and food prices. It’s then critical to monitor the market closely and give an objective picture of these agricultural commodities which would bring transparency and clarity in a bid to ameliorate the impact of the next global shock.”

Speaking, Vice President, Financial Markets at AFEX, Oluwafunto Olasemo, said, “The shift in global commodities supply has greatly influenced the commodity market and exposed the vulnerabilities in our food system. There is a growing imbalance between the food supply and the demand of the growing population, putting upward pressure on prices.”