Energy costs, according to AFEX, will fall by 5% in 2024 and then by an additional 0.7% in 2025, while commodities related to agriculture are expected to fall by 2% in 2024 and 3% in 2025. De-escalation of the Middle East war is a prerequisite for these.
These were mentioned in the AFEX 2024 Commodities Outlook Report, which was released in Lagos yesterday. Additionally, it predicts that domestic commodity prices would grow steadily in 2024. Global commodity prices are expected to trend lower in 2024 as a result of things like increased supply and the expiration of several trade agreements.
According to the research, many factors could have a substantial impact on the trend’s direction and could potentially pose a downside or upside risk to commodity prices. Therefore, important export goods like sorghum and cocoa are expected to rise by 20% and 50%, respectively, due to decreased output. Despite a projected 4% growth in paddy rice output, other important commodities for consumption, such as maize and paddy rice, are expected to climb by 25% and 40%, respectively.
However, in order to reduce market volatility and guarantee food security, AFEX said that it was imperative to increase domestic agricultural output, simplify trade regulations, and create strategic reserves.
According to the paper, economic changes and inflation had a knock-on effect on the Nigerian commodities market. Global shocks including energy scarcity, geopolitical tensions, financial crises, and more, the research said, were causing turmoil in the commodities market.
The outlook, according to Oluwafunto Olasemo, Vice President, Financial Markets, AFEX, who spoke at the event, is a crucial element of the commodities market that determines trading patterns and movement among participants in both the physical and secondary markets.
AFEX
She stated that a difficult balance between geopolitical, economic, and environmental issues will affect the commodities market this year. This will, on the one hand, need ongoing monitoring and strategic adaptation, and, on the other, increase alertness among market participants and policymakers, as reported by guardian.ng
