AFEX: Commodity prices projected to rise to historical highs

In a recent wet season crop production report, AFEX Commodities Exchange has projected that commodity prices are set to rise to historical highs in 2025. This comes as the World Bank estimates a 14 percent decline in global cocoa production for the 2023-24 season, mainly attributed to reduced output in Côte d’Ivoire and Ghana. However, supply conditions are anticipated to improve in the upcoming 2024-25 season, particularly in Côte d’Ivoire, where favorable weather conditions could boost production by up to 17 percent. The World Bank also foresees a potential 13 percent decrease in prices in 2025 and a further 2 percent dip in 2026 as additional supplies enter the market. Yvonne Chioba, Head of Food and Beverage at AFEX Commodities Exchange, highlighted that the increase in food prices is primarily fueled by demand. She pointed out that Nigeria has been facing significant pressure on food security due to various factors and emphasized the importance of proper policy implementation to stabilize and make food more affordable for Nigerians. Chioba discussed the cocoa market outlook, mentioning the expectation of increased production and improved quality in the current season. Farmers are urged to adhere to best practices to meet international standards and enhance market competitiveness. The focus remains on ensuring that cocoa seeds meet the necessary specifications to capitalize on rising international market prices. Regarding paddy rice, Chioba explained that the upcoming dry season would be favorable for planting, with less risk of flooding compared to the wet season. This period offers a strategic window for farmers to boost production for local consumption, aligning with market demand to maintain adequate supply levels. In the context of maize, Chioba noted that the previous season saw a shift towards planting more maize than soybean due to input costs. While there is currently sufficient maize in the market, price stability is expected in the first quarter of the year, with potential increases projected from late Q1 to Q3 as existing harvests are depleted. As commodity markets navigate various challenges and opportunities, stakeholders are advised to monitor supply and demand dynamics closely to mitigate potential price fluctuations and ensure market sustainability. The evolution of production and pricing trends in key commodities like cocoa, paddy rice, and maize will continue to shape the future landscape of the agricultural sector.