Nov 06, 2024 (This Day/All Africa Global Media via COMTEX) --
The African Exchange (AFEX) has projected that Nigeria would experience historical rise in food prices in 2025 due to reduced domestic production levels, export of food crops to international markets and rising logistics costs.
The projection is contained in the, "AFEX 2024 Wet Season Crop Production Report Nigeria," which sampled 47,364 farmers across Nigeria's six geopolitical zones and covered key commodity crops such as cashew, cocoa, soybean, sorghum, sesame, paddy rice, ginger and maize.
The report stated that factors that would affect Nigeria's food production in 2024/2025 season include reduced input usage, limited access to input financing and impacts of climate shocks.
According to AFEX: "Commodity prices are projected to rise to historical highs in the new season (2024/2025), driven by reduced production levels, growing international demand, and rising logistics costs, pressured by the fuel price hikes."
The report stated that the outlook for Nigeria's food security is particularly concerning, especially given the historic food inflation rate of 37.5 per cent.
It, therefore, warned that, "if swift action is not taken, the already high levels of food insecurity in the country are likely to worsen. Recent climate shocks have severely impacted staple crops, damaging thousands of farmlands and constraining output."
The AFEX report added that, "it is now more critical than ever to adopt effective adaptation strategies to combat climate change vulnerability."
The report projected that the prices of maize, soybeans, paddy rice, sorghum and ginger would record substantial increases in the 2024/2025 season.
It said: "Looking ahead to the 2024/2025 season, maize prices are expected to continue their upward trajectory.
"With the season starting at a historical base price of over N650,000 per metric ton, we anticipate the average price to rise to around N910,000 per metric ton, representing a 48 per cent seasonal increase."
According to the report, "without the implementation of effective price controls and agricultural policies to stabilise supply and manage inflation, maize prices could escalate even further, potentially reaching an average of N1,200,000 per metric ton during the season.
"Such a situation could place significant strain on consumers and industries dependent on maize, further amplifying food security concerns and inflationary pressures across the broader economy."
The report also stated that soybean prices would continue to rise at a projected range that is between N1,100,000 and N1,700,000 per metric ton by the end of Q3 2025.
It said: "This projection indicates an average price of approximately N1,400,000 per metric ton, representing a substantial seasonal increase of about 95 per cent."
It attributed the anticipated increase in the price of soybean to a projected 2.0 per cent decline in production volumes and an expected increase in export activities, which would limit availability for local consumption and industries, placing additional upward pressure on prices.
The report also stated that looking ahead to the 2024/2025 season, "we anticipate a further seasonal price increase of around 55 per cent.
"This is largely due to the elevated starting price for the season, beginning at approximately NGN 750,000 per metric ton, reflecting ongoing supply constraints.
"By the third quarter of 2025, we expect paddy rice prices to be within the range of N1,100,000 to N1,300,000 per metric ton."
The AFEX report also estimated that the price of sorghum would experience a remarkable 102 per cent increase in the 2023/2024 season.
"The average price during 2023/2024 season was N640,000 per metric ton. Looking ahead, prices are expected to reach an average of N1,000,000 per metric ton, with a strong upward trend anticipated starting in Q1 2025.
"This anticipated surge will be largely driven by the expected depletion of maize supply, which will increase demand for sorghum as a substitute."
The report forecasted a strong upward movement in cocoa prices, with the average price expected to range between N15,000,000 and N16,500,000 per metric ton throughout the 2024/2025 season.
Although ginger experienced an extraordinary surge in price during the 2023/2024 season, skyrocketing by a staggering 476 per cent due to a severe supply shortfall caused by a widespread fungal attack on ginger farms, the report projected elevated prices for ginger in 2024/2025 season driven by continued supply constraints.
"Although efforts are being made to restore production levels, supply is anticipated to remain well below pre-fungal attack volumes.
"We project ginger prices to range between N6,200,000 and N9,000,000 per metric ton, representing a seasonal increase of over 90 per cent.
"This forecast reflects both the ongoing supply shortages and intensifying demand from international markets.
"While prices are expected to stabilise somewhat compared to the previous season's massive rally, significant relief in the market is unlikely until production fully recovers, which may take several growing seasons."
COMTEX_459513940/2029/2024-11-06T03:32:58
by Dike Onwuamaeze
Copyright 2024 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
