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Prices of rice, maize, others to increase as production declines — report

The prices of most staple foods consumed in Nigeria, including rice, maize, soya bean, sorghum among others are expected to be on the high side as production levels decrease, AFEX 2023 wet season crop production report has revealed.

According to the report, paddy rice experienced a notable upswing during the 2022/2023 season, particularly as it approached the third quarter of 2023. The surge in price was attributed to reduced production stemming from flooding and the ripple effect of the international market dynamics.

The report showed that at the end of the season, paddy rice demonstrated a season-to-date price increase of 34 percent, culminating in an average seasonal price of NGN353,000 per metric ton.

For the 2023/2024 commodity price outlook, the report estimates an increase
in production by approximately 4 percent and 32 percent surge in the price of paddy rice. “This price surge is anticipated to commence from a higher initial base price,
starting at around NGN400,000 per
metric ton at the onset of the fourth
quarter.

“The driving force behind this
surge is the low opening stock amid
reduced supply of the commodity in
the international market. By the third quarter of 2023, our forecast suggests that the price of paddy rice is likely to stabilize within the range of NGN480,000 to NGN500,000 per metric ton,” it stated.

The report also showed that heightened demand amidst reduced production led to a significant increase in the price of maize as the average price of maize was NGN370,000/mt reaching a record high of around NGN600,000 per metric ton in the 2022/2023 season.

The price of maze according to the report is expected to hover around NGN380,000 per metric ton, marking a minimum 5 percent increase by the end of the season and higher than the average of the past five years. This rise can be attributed to elevated demand and low initial stock levels.

We witnessed a fairly stable soybean price over the course of the
2022/2023 season, averaging at
NGN355,000 per metric ton.
As the season concluded, the season-to-date performance of this commodity stood at 15%.

Also, the price od soybean is expected to reach N390,000 and N420,000 per metric ton by the end of Q3 2024, from N355,000 per metric ton observed during the same period in 2022,

This price upturn, according to the report is attributed to the projected 2 percent decrease in soybean production volume and amplified international demand, given the anticipated global reduction in production by roughly 1.2 million metric
tonnes.

“Nigerian food system is still grappling with the impact of the COVID-19 pandemic and the Russian invasion of Ukraine, which highlight its susceptibility to global shocks. The recent cash crunch and fuel subsidy
removal have exacerbated the situation, leading to a food inflation rate of 30.64% in September of this year.

“To tackle these challenges, Nigerian
policymakers should adopt a multipronged approach. Urgent measures are essential to aid those facing acute food insecurity, including actions such as subsidized food distribution, cash transfers, and nutritional support to alleviate economic hardships.”

It also stated that in the longer term, a forward-thinking strategies including promoting synergy between research institutions that develop advanced seed varieties and agricultural extension agents responsible for educating smallholder farmers about these innovations will be required to revitalize the food system.

https://businessday.ng/news/article/prices-of-rice-maize-others-to-increase-as-production-declines-report/ QR Code

Published Date: November 20, 2023

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