Wednesday, April 14, 2021 / 6:19 PM/
Kainosedge Consulting for AFEX Commodities Exchange /Header Image Credit: AFEX Commodities Exchange
The AFEX Commodities Index (ACI) fell further by 0.21% (W-o-W) closing the reporting week at 391.38 basis points because of the slight decline in paddy rice prices while other commodities remained flat.
The AFEX Export Index (AEI) remained flat for two consecutive weeks at 159.35 points. This is because cocoa is out of season while ginger experienced no price movement compared to the previous reporting week.
Sesame and cashew prices were same, closing the week at NGN47,617/contract and NGN40,000/contract. respectively. Deals on the exchange increased by 21% (W-o-W) as a total of 312 deals were traded this week in contrast to 257 deals that exchanged hands last week.
For the reporting week maize, soybean, paddy rice, and cashew were traded on the exchange with cashew accounting for 46% of the volume traded. Also, the volume traded of cashew increased by 700% compared to the previous week closing with 144 deal.
For the week, on the exchange, paddy rice declined by 1.12%. On the other hand, other commodities maintained the prices from the previous week.
Local indicative open market survey prices for soybean, ginger, and cashew were higher than exchange-traded prices. However, paddy rice, maize, sesame, and sorghum recorded higher prices on the exchange when compared to the open market prices during the reporting week.
Week-on-Week in the open market, only soybean experienced an increase in price by 2.53%. Whereas, maize, paddy rice, sorghum, ginger, sesame, and cashew declined by 1.38%. 1.27%, 0.47%, 8.12%, 3.34%, and 2.65% (W-o-W} respectively.
Sustaining prices of commodities at current levels in the open market is the impact of a good dry season harvest which has lessened considerably upward pressure on prices of commodities in the open market.
Unlike trends witnessed in the domestic market, prices of commodities, especially grains, have accelerated faster in the international space. This is reflected in the IMF's and FAO's food price index which ended Q1, up by c.11% on the back of renewed demand for commodities across economies.
The effect of the harvest is being impeded by heightening insecurity especially in the crop production heavy zones of the country. Also, induced scarcity in the market as traders and farmers hoard commodities in anticipation of higher future prices and middlemen's deliberate price hikes as reported by AFEX field officers could pressure prices of key commodities in coming weeks.