AFEX Indexes Experienced Negative Performance for the Week Ended 120321


Monday, March 15, 2021 / 02:58PM / Kainosedge Consulting for AFEX Commodities Exchange / Header Image Credit: AFEX Commodities Exchange

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The AFEX Commodities Index (ACI) decreased marginally by 0.63% (W-o-W) to close at 392.58 basis points. This is attributable to the decline in the price of maize and soybean for the reporting week, despite a price surge in paddyrice.

Likewise. the AFEX Export Index {AEI) declined by 1.12% (W-o-W), to close the reporting week at 158.90 basis points. This is due to the decline in ginger prices for the week as cocoa remains unchanged as it is out of season.

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Total volume traded on the exchange for the reporting week experienced a significant decline compared to the previous week, plunging by 86% (W-o-W). totaling a total traded volume of 104.683 contracts. While export commodities volume last week increased 41 times compared to the previous week.

Cashew had a good introductory week. as a total volume of 3.378 contract were executed. Despite export commodities like cocoa and sesame being out of season. for the reporting week the exchange recorded trades on sesame while cocoa recorded no trades.

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For the reporting week. soybean, maize and ginger declined by 3.59%, 3.31% and 2.24% (W-o-W) respectively. On the other hand. Paddy rice had a splendid week. as its price surged by 7.18%(W-o-W). sorghum increased marginally 0.66% (W-o-W).

Local indicative open market survey prices for maize. Soybean and ginger were lower than exchange traded prices. However, Players on the exchange priced paddy. sorghum. sesame and cashew higher than the open market survey prices for the reporting week.

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Week-on-Week in the open market. sorghum and ginger increased by 2.27% and 1.48% (Vto-W) as against the previous week. On the other hand. maize. soybean and paddy rice declined slightly by 0.19%. 036% and 0.17% (W-o-W) respectively. Cashew for the reporting week recorded a price decline by 11.90% (W-o-W) in the open market. Other export commodities like cocoa and sesame remained unchanged for the reporting week.

Market Talk

We are unsure of the FG's position on the removal or the sustenance of subsidy in the downstream oil sector amid rallying oil price. We believe the FG's ultimate decision is a strong factor in determining price of commodities especially in the open market going forward. Higher transportation cost has proven to have a strong positive correlation with commodity prices over time in Nigeria.

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