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Commodities | |
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Wednesday, April 17, 2019 / 06.50PM
/ Ottoabasi Abasiekong for Proshare WebTV
A total of 7,183 MT of commodities ranging from maize, paddy rice and sorghum valued at N773.1m was traded at the AFEX exchange in Q1, 2019.
This was disclosed by AFEX at a Tweet-chat organized in partnership with Proshare Nigeria.
Engaging stakeholders via twitter the focus of the AFEX-Proshare Tweet-chat was “Agricultural Commodities a Key Vehicle for Investments”.
Giving an overview of the commodities market in 2019, the exchange projected a bullish H1, 2019 performance in Nigeria, with return on investments on yields of smallholder farmers expected to hit 25%.
This was on the backdrop of the wet season experienced in 2018, which AFEX believes will boost the yield of farmers by one and a half times.
Commodity Demand Increased As Election Fears Subsided
The exchange also noted that in the first
quarter of the year, (Q1, 2019) with uncertainty over
the just concluded general elections gone, several investors bought and stored
commodities, which led to an increase in demand. Logistic costs were also high
in the period contributing to price increases and fluctuations.
In the area of the regulatory framework and
environment for the commodities ecosystem, AFEX in its response informed the
market and the nation that it had representation in the sub-committees for
commodities set up by the Securities and Exchange Commission, and has been in
constant interaction with policy makers and regulators on charting a pathway
for a viable commodities exchange.
Deploying Technology
for Increased Smallholder Farmer Participation
Speaking to one of its initiatives the
#CodeCashCrop the first Nigerian private commodities exchange highlighted
the fact that the scheme was borne out of a financial
inclusion drive, which as a large part of the pillars of its service and which
has seen AFEX deploy tech solutions to get more smallholder farmers in
rural communities to access financial services.
The initiative according to the Exchange, is targeted at
attracting investments into the sector and also providing sound solutions
towards increasing productivity in Agri-Business.
Commodity Market Outlook in 2019
On the outlook for
the commodities market in 2019, AFEX expects
to see an increase in retail participation as well as the introduction of key
products targeted at increasing participation of key stakeholders.
The
exchange also identified its “outreach structure” as a strategy to increase the commodities traded on the platform, even as it will
remain focused on farmer engagement; using the Exchange’s offerings from input
financing to storage and grading services.
To ease its
operations and provide seamless service, AFEX also made a lot of investments in
technology, to automate its processes and make it easier for data capturing and
analysis.
This is one of the reasons AFEX drives its publication of prices on the website http://www.afexnigeria.com and also the weekly and monthly reports that it sends to members with analysis of the market both locally and internationally.
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