Maize Outlook For The 2019/2020 Season

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Insights on the commodity markets in Nigeria are critical as we enter into the 2019/2020 season. All key crops traded on AFEX Commodities Exchange are being considered in view of the demand and supply dynamics as well as a look into possible proactive measures that investors can take. Read below for the AFEX maize outlook for the 2019/2020 season in Nigeria.

Maize Outlook Supply-Side Dynamics

The rains are beginning to recede in most parts of the North, and the grain moisture levels are high so we expect 16-18% Moisture Content (MC) from mid to end October but a stable 14% and below from November.

Maize harvest and stocking was expected to commence at the end of September. Despite the difficult season, we see a good harvest across board for Maize but a short period of availability at the farm gate; therefore, a concrete aggregation plan would be useful.

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In multiple large markets in the North West, the price started at N6, 000 per 93Kg Bag or N65,000 per MT and quickly appreciated to N72,000 ending October. Now in mid-November, the price is N78,000. In the North East, prices are at N65,000 per MT with huge and increasing stock availability, however, we envisage that logistics will not readily available for volumes.

Other important markets for maize will be Tuesday (Anchau) and Wednesday (Saminaka). Markets like Makarfi, Giwa in Kaduna; Dandume and Bakori will dealing at a stable N78,000 per MT mid-November.

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Maize Outlook Demand Side Dynamics

We gather that a number of players are/will be in an intense rush to build up volumes. For Maize, there will be up to 5,000 differentials between market prices for grains and best offer prices to large volume traders supplying a number of Mills. The market is basically incentivizing traders to direct traffic to them.

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Strategy to Adopt

We recommend a dual strategy with an objective to achieve volume targets, but at a comparative price advantage to the competition.

  1. Aggressive trade volumes but with a closed pricing approach, so the market isn’t further upset.
  2. The aggressive stock build-up at farm gate/AFEX Warehouse for shipment in May/June.

This post first appeared on the AFEX blog

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