A total of 7,183 MT of commodities ranging from maize, paddy rice and sorghum valued at N773.1m was traded at the AFEX exchange in Q1, 2019.
This was disclosed by AFEX at a Tweet-chat organized in partnership with Proshare Nigeria.
Engaging stakeholders via Twitter the focus of the AFEX-Proshare Tweet-chat was “Agricultural Commodities a Key Vehicle for Investments”.
Giving an overview of the commodities market in 2019, the exchange projected a bullish H1, 2019 performance in Nigeria, with return on investments on yields of smallholder farmers expected to hit 25%.
This was on the backdrop of the wet season experienced in 2018, which AFEX believes will boost the yield of farmers by one and a half times.
Commodity Demand Increased As Election Fears Subsided
The exchange also noted that in the first quarter of the year, (Q1, 2019) with uncertainty over the just concluded general elections gone, several investors bought and stored commodities, which led to an increase in demand. Logistic costs were also high in the period contributing to price increases and fluctuations.
In the area of the regulatory framework and environment for the commodities ecosystem, AFEX in its response informed the market and the nation that it had representation in the sub-committees for commodities set up by the Securities and Exchange Commission, and has been in constant interaction with policymakers and regulators on charting a pathway for a viable commodities exchange.
Deploying Technology for Increased Smallholder Farmer Participation
Speaking to one of its initiatives the #CodeCashCrop the first Nigerian private commodities exchange highlighted the fact that the scheme was borne out of a financial inclusion drive, which as a large part of the pillars of its service and which has seen AFEX deploy tech solutions to get more smallholder farmers in rural communities to access financial services.
The initiative according to the Exchange, is targeted at attracting investments into the sector and also providing sound solutions towards increasing productivity in Agri-Business.
Commodity Market Outlook in 2019
On the outlook for the commodities market in 2019, AFEX expects to see an increase in retail participation as well as the introduction of key products targeted at increasing participation of key stakeholders.
The exchange also identified its “outreach structure” as a strategy to increase the commodities traded on the platform, even as it will remain focused on farmer engagement; using the Exchange’s offerings from input financing to storage and grading services.
To ease its operations and provide seamless service, AFEX also made a lot of investments in technology, to automate its processes and make it easier for data capturing and analysis.
This is one of the reasons AFEX drives its publication of prices on the website http://www.afexnigeria.com and also the weekly and monthly reports that it sends to members with an analysis of the market both locally and internationally.