AFEX: Prices of grain commodities likely to remain elevated in 2025
Grain commodities such as maize, soybean, paddy rice, and sorghum are expected to stabilize, although prices will likely remain higher than last year. That’s according to AFEX Annual Commodities review and outlook report. The exchange highlights investors need to diversify portfolios to manage risks from climate change and market volatility while noting prioritizing investments in climate-resilient technologies and sustainable practices is critical for long-term success. Ayodeji Balogun, Group CEO of AFEX joins CNBC Africa to unpack the report.
Thu, 27 Feb 2025 12:06:55 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- AFEX Annual Commodities review predicts stable yet higher grain commodity prices in 2025.
- Investors advised to diversify portfolios and prioritize sustainable practices.
- Cocoa industry expected to undergo price adjustment amid global market shifts.
Grain commodities such as maize, soybean, paddy rice, and sorghum are expected to stabilize, although prices will likely remain higher than last year, according to the AFEX Annual Commodities review and outlook report. The report highlights the importance of investors diversifying portfolios to manage risks from climate change and market volatility. Ayodeji Balogun, the CEO of AFEX Commodities, discussed the outlook for key grains and the positioning strategy for Nigeria. Balogun pointed out the significant role of commodities like maize and soybeans in the protein value chain, with sorghum being essential for the food and beverage sector. Paddy rice, a staple in Nigerian cuisine, completes the basket of key commodities. Recent price trends have shown a 20% dip from peak prices, indicating a degree of stabilization following the post-harvest price elevation. The report suggests that over the next few months, prices are likely to remain fairly flat as supply strengthens and demand stabilizes. The impact of global geopolitics on commodity prices was also analyzed in the report, with a focus on factors like the ongoing Russia-Ukraine tensions and geopolitical shifts like 'Trump 2.0.' Despite these uncertainties, global commodity prices have returned to pre-COVID levels, with fertilizer and natural gas prices remaining stable. The analysis indicates a potentially favorable outlook for agricultural markets in Nigeria, with a stronger Naira and declining global prices offering a double advantage for the country. The conversation also turned to the cocoa industry, which has seen a significant rally in prices over the past two years. Balogun emphasized the need to determine the fair price of cocoa, noting that historical low prices have unfairly burdened West African farmers. The report expects an adjustment in cocoa prices in the upcoming season, as market dynamics and global economic conditions evolve. Overall, the AFEX report provides valuable insights for investors and stakeholders in the agricultural sector, emphasizing the importance of sustainable practices and climate-resilient technologies for long-term success.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.
