Market Experiences Increased Volatility and Decline in Prices - AFEX Monthly Report, March 2020

Proshare

Friday, April 17, 2020 / 10:05 AM /  Kainosedge Consulting for AFEX Commodities Exchange

 

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.


Proshare Nigeria Pvt. Ltd.


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.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


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.


Proshare Nigeria Pvt. Ltd.

 

International Markets 

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.

 

Composite Index 

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.

 Proshare Nigeria Pvt. Ltd.


The year-on-year (seasonality) performance experienced -13.4points (-7.7%} difference against March, 2019; indicating a decrease from last year's prices.

 

Maize

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.

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

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.

 

Soybean 

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.

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

Paddy Rice

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.

 

Proshare Nigeria Pvt. Ltd.

 Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.


Related News

1.       Stockpiling of Staples to Keep Domestic Commodities Prices High

2.      COVID-19 Induced Lull Continues - AFEX Commodities Weekly Report 090420

3.      AFEX Partners Proshare on a Webinar on the Impact of COVID-19 on Nigeria's Food Systems

4.      Markets Witness COVID-19 Induced Lull - AFEX Commodities Weekly Report 020420

5.      Increased Consumer Demand For Grains During The Global Lockdown To Push Up Prices

6.      ACI Experiences An Uptick - AFEX Commodities Weekly Report 260320

7.      Sugar Prices to Rise in the Coming Weeks as Ethanol Refiners Switch to Sanitizers

8.     Nigeria Should Strengthen Its Warehousing Capabilities, To Boost Its Commodities Exchanges

9.      Price Volatility Ramped up Significantly in the Exchange and Domestic Market - AFEX Monthly Report

10.  ACI Surges By 5.06% - AFEX Commodities Weekly Report 060320

11.   Cocoa Prices Gained; Driven By Shortage in Supply

12.  Grain Prices Are Expected to Remain Low as Chinese Demand Slow

13.  Open Market Prices Take a bullish Turn - AFEX Commodities Weekly Report 210220

14.  Brent Likely to Trade Around $59-$61pb in the Coming Days

15.  Falling Demand for Wheat and Corn to Taper Prices in the Coming Days

16.  Commodities Markets Take Bearish Turn As Traders Contemplate Coronavirus

17.   Export Crops Maintaining Gains in Price - AFEX Commodities Weekly Report 140220

18.  Cocoa Prices Up As Adverse Weather Conditions Limit Global Output

19.  Export Crops face Bullish Trend- AFEX Commodities Weekly Report 060220

20. Declining Demand for Grains to Depress Prices in the Near Term

21.  Global Commodity Markets Calm After a Very Choppy Day

22.  Commodities Prices Maintain Steady Sail - AFEX Commodities Weekly Report 230120

 

 Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP