The report further indicated that the fertiliser index which rose by 66% in 2022, is projected to decline by 12% in 2023 as supply disruptions gradually subside.
“However, the commissioning of some fertilizer plants, which have not yet ramped up to full capacity in 2022, will suppress the positive risks.”
A grim outlook for Nigeria
When it comes to Nigeria, the report is not as upbeat, projecting that commodity prices will remain at historically high levels, amid concerns of an impending food crisis and global recession.
AFEX attributes the higher commodity prices to the impact of flooding, devaluation of the naira, high logistics costs, and the social-political situation in the country.
The report further attributes this surge in prices to the low production volume of maize, paddy rice, sorghum, and cocoa.
These commodities declined by an average of 11.5% in the 2022/23 trading season due to price-induced low fertiliser usage because of the Russia-Ukraine war, according to the report.
Speaking on the commodities outlook for the year, Oluwafunto Olasemo, Vice President, Financial Markets at AFEX said, “The shift in global commodities supply has greatly influenced the commodity market and exposed the vulnerabilities in our food system. There is a growing imbalance between the food supply and the demand of the growing population, putting upward pressure on prices.”
Olasema further noted that it was imperative for Nigeria to develop a holistic approach to mitigate food insecurity and improve the shocks to climatic change, inadequate financing, and low access to efficient markets is a priority.
“With this report, we seek to provide high-quality, timely, accurate, and accessible data for investors while addressing the real pressing issues of the agricultural sector in Nigeria,” he added.
Founded in 2014, AFEX has grown to become Nigeria’s leading commodities market player. “Every year, AFEX reviews Nigeria’s commodity market and gives an in-depth analysis of the outlook for the new year
The company has also developed and deployed a viable commodities exchange model for the West African market and is on track to impact one million producers: providing services in productivity and value capture and access to finance and markets.