Prices on the Exchange witnessed a lull as the AFEX Commodities Index (ACI) dropped by -0.39% over the period. The commodities covered by the Index remained neutral in the month under review. This was influenced partly by the lockdown measures, which were put in place by the Government to combat the COVID-19 pandemic near the end of March.
The open market indicative prices tightened considerably and were greatly influenced by the crop cycle in the agrarian North which indicated a gradual depletion of market stocks in March, thereby narrowing supplies as the markets inch closer to the lean season for commodities. The month-average executed prices in the Open market were higher than the Exchange Prices for maize, soybeans and paddy rice.
Market activity in March for maize, soybeans and paddy rice was characterized by a marked increase in price volatility in addition to a price decline for maize and soybeans on the exchange and international markets. Physical market indicative prices tightened considerably and were greatly influenced by the crop cycle in the agrarian north which indicate gradual depletion of market stocks in March, thereby narrowing market supply. On the other hand, paddy rice prices on the exchange remained neutral M-o-M while other prices eased in addition to experiencing increased price volatility indicating gradual depletion of market stocks and supplies as the markets inch closer to the lean season for commodities.
The domestic commodity markets have also witnessed some impacts following the outbreak of COVID-19 and the subsequent lockdown instructions being implemented across the country. The impact of the virus outbreak has been reflected in the suspension of procurement by industries consuming the commodities as they evaluate the demand levels and seek alternative supply and distribution networks for their products.
AFEX Executed prices for the month under review were generally lower than the physical markets for comparative commodity grades offered on the exchange.
In the international Market, maize and soybeans prices eased in March, being most pronounced for maize as the commodity experienced a price decline of -3.0% due to seasonal pressures. Global supply chains are however at risk of disruption from the current global pandemic of COVID-19 which has its epicenter situated in Southeast Asia a major food-producing hub.
The AFEX Commodities Index Composite opened at 161.4 points and had a month average value of 160.0points, a negative M-o-M performance against February 2020 to close at 162.3 points at the end of the month. The season-to-date' performance of the ACI Composite at the last trading day of the month was negative, closing 9.77 points below the index opening at the beginning of the season.
The year-on-year (seasonality) performance experienced -13.4points (-7.7%} difference against March, 2019; indicating a decrease from last year's prices.
The Maize Sub-Index opened at 178.8 points, and had a month average performance of 179.1 points, representing a negative performance of the sub-Index against February 2020 and closed at a value of 180.6 points.
The sub-index recorded a negative season-to-date performance on the last trading day of the month closing -7.4 points (-4.0%) below the February index opening while the year-on-year performance experienced a 1.8% increase against March 2019.
The Soybeans Sub-Index opened at 178.9 points, and had a month average performance of 174.5 points, representing a negative performance M-o-M for the sub-Index. It closed with a value of 178.9points. It recorded a negative season-to-date performance on the last trading day of the month closing 15.1% below the December opening of the index. The year-on-year performance experienced a -39.3points (-18.4%) decline against March, 2019.
The Paddy Rice Sub-Index opened at 136.3 points and had a month average value of 136.3 points, representing a M-o-M neutral performance to close at 136.3 points at the end of the month. The sub-index recorded a positive season-to-date performance on the last trading day of the month closing 5.9 points (4.5%) above the sub-index opening at the start of the season while the year-on-year performance experienced a 5.1% increase against March 2019.