A leading commodities player in Africa, AFEX, has unveiled its 2024 commodities outlook in a hybrid event hosted at their Lagos office on January 24, 2024. The annual commodities outlook is a key literature that analyses critical socioeconomic factors shaping the demand and supply dynamics of commodities, with a view to highlight challenges and opportunities inherent in the market while providing an accurate forecast that potentially steers price and volumes for the 2024.
AFEX, in a statement, hinted that globally, the commodities market was marked by turbulence, owing to global shocks across energy scarcity, geopolitical tensions, financial crises and more, however, noted that despite the challenges, the global market witnessed a 24 per cent decline from their peaks in 2022. The Nigerian commodities market on the other hand faced trickled down effects of inflation, and economic reforms, which pegged the growth in the first three quarters of 2023 at 0.63 per cent, a sharp decline from 1.90 per cent in the same period of 2022. The statement revealed that agriculture commodities witnessed price surges with the greatest factor responsible being supply. While maintaining that of all tracked commodities, maize exhibited the highest volatility at 24 per cent, resulting in a peak price of N550,000/mt by the end of Q3, and closing the year at N480,000/mt. This increase is a consequence of decreased input usage, a still-felt effect of the Russia-Ukraine crisis impacting fertiliser prices.
Also, predictions for 2024 global commodity prices suggest a downward trend due to factors such as improved supplies and the expiration of certain trade policies However, the direction of this trend can be significantly influenced by numerous factors, each capable of either posing a downside or upside risk to commodity prices. Energy prices are expected to drop by five per cent in 2024 and then further decrease by 0.7 per cent in 2025, while agriculture commodities are projected to decrease by two per cent in 2024 and three per cent in 2025, provided that the Middle East conflict de-escalates. On the flip side, the report forecasts that domestic commodity prices are expected to rise consistently throughout 2024. Key export commodities like cocoa and sorghum are projected to rise by 50 per cent and 20 per cent respectively, underpinned by declined production, while key consumption commodities like maize and paddy rice are projected to rise by 25 per cent and 40 per cent respectively, despite a four per cent increase projection on production of paddy rice.
