AFEX projects 3% growth in maize production in 2021

AFEX Commodities Exchange has projected a 3% increase in maize production volumes for the year 2021. This estimate represents a significant improvement from the previous year, as highlighted by Akinyinka Akintunde, the Chief Operating Officer at AFEX Commodities Exchange, in an interview with CNBC Africa. The projection was based on extensive research that shed light on production patterns among smallholder farmers across Nigeria. AFEX surveyed over 10,000 smallholder farmers engaged in commodities production to gather data on their farming practices. Information regarding inputs used, land sizes, planting timelines, crop varieties, and chemical applications was collected to inform the projections. Through their proprietary methodology, AFEX determined that there would be a notable increase in production volumes for smallholder farmers in the current year. Despite the marginal nature of this anticipated growth, it holds significance in light of the challenges faced in 2020. An analysis of the survey data revealed external factors beyond the control of smallholder farmers, particularly the macroeconomic environment, exerting considerable influence on production timelines and outcomes. Nigeria's status as a food deficit production country contributes to a perennial imbalance between supply and demand for commodities. This imbalance typically manifests in upward pressure on food prices due to the persistent shortfall in supply. The projected increase in production volumes for 2021, however, is unlikely to fully counteract the sustained high demand for food commodities within the country. As a result, AFEX anticipates that commodity prices will commence the year at a premium, approximately 20% higher than the preceding year. Despite efforts to combat inflation and stabilize commodity prices by economic authorities and regulatory bodies such as the Central Bank of Nigeria, underlying infrastructure deficiencies continue to pose challenges in achieving long-term stability in the agricultural sector. Issues related to input pricing and supply volatility have been particularly pronounced throughout the year. The scarcity of critical inputs like Urea, crucial for agricultural productivity, has been exacerbated by its high value in export markets. The pricing of Urea in dollars has incentivized manufacturers to prioritize exports over domestic supply, leading to local shortages and increased costs for farmers in Nigeria. While the arrival of Urea in the local market has somewhat mitigated supply constraints, its elevated price remains a concern for smallholder farmers. The pricing dynamics of essential inputs, including gas, further compound the challenges faced by agricultural stakeholders as they navigate a volatile economic landscape. Inflationary pressures continue to exert a significant impact on the agricultural value chain, affecting not only input costs but also the overall production and pricing dynamics in the sector. Akinyinka Akintunde emphasized the need for concerted efforts to address structural deficiencies and enhance supply chain resilience to foster stability in commodity prices and ensure consistent access for both consumers and manufacturers. Despite the prevailing challenges, AFEX remains optimistic about the potential for growth in maize production and seeks to support smallholder farmers in expanding their output. The upcoming period will demand innovative solutions and collaborative strategies to address the complex interplay of macroeconomic forces and local realities shaping the agricultural landscape in Nigeria.