Commodity prices to rise in 2024 – Report

AFEX, a leading commodities player in Africa, presented its highly anticipated 2024 commodities outlook during an event at its Lagos office.

Theannual report analyzed critical socio-economic factors shaping global and Nigerian commodity markets, addressing challenges, opportunities, and providing forecasts that could influence pricing and volumes for the year.

Globally, commodities faced turbulence from energy scarcity, geopolitical tensions, and financial crises, resulting in a 24% decline from 2022, according to the report.

In Nigeria, the commodities market grappled with inflation and economic reforms, leading to a sharp decline in growth during the first three quarters of 2023.

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Maize exhibited the highest volatility, reaching a peak price of N550,000/mt by Q3’s end and closing the year at N480,000/mt due to decreased input usage following the Russia-Ukraine crisis impacting fertilizer prices.

Predictions for 2024 global commodity prices suggest a downward trend, influenced by improved supplies and the expiration of certain trade policies.

However, the direction of this trend is susceptible to various factors, including geopolitical events.

Domestic commodity prices, on the other hand, are expected to rise consistently in 2024, with key export commodities like Cocoa and Sorghum projected to rise by 50% and 20%, respectively.

Speaking at the event, Oluwafunto Olasemo, Vice President, Financial Markets, highlighted the complexity of geopolitical, economic, and environmental factors in 2024, urging continual monitoring and strategic adaptation.

Olasemo stressed the need to enhance domestic agricultural production, streamline trade policies, and establish strategic reserves for food security.

She further added that mechanization would increase agricultural output but the challenge of accessible lands and equipment need to be surmounted by the government.

“Land is a very difficult area to address because most of the farmlands owned by these small holder farmers are ancestral lands and there is also insecurity.

“In the short to medium term, the volume produced by the small Holder farmers would continue to be what would drive activities on the commodity space overtime if we get the mechanization right then it would be adopted across the entire ecosystem,” she explained.

The report advocated for a boost in agricultural productivity by adopting sustainable farming practices, such as diversified crop rotation, to optimize soil capacity and increase income for farmers.