Dipo Olowookere
By Dipo Olowookere
The production of soybean in Nigeria has been hindered by heavy rains, resulting in high levels of immature grains with very high moisture content. This assertion was made by AFEX Commodities Exchange Limited in its Soybean outlook for 2019/2020 season.
In the report obtained by Business Post, it was stated that harvest has commenced as the rains are beginning to recede in most parts of the North, and the grain moisture levels are high at 15-16 percent MC from end of October to mid – November, but expected to moderate to 12 percent and below from end of November cross all locations.
It was further stated that in Benue and Taraba, the rains have persisted slightly longer and only a handful of farmers have been able to harvest by early November, most of which have high levels of immature grains with very high moisture content.
Prices started at N115,000 per MT in Benue, N100,000 in Taraba and N110,000 in the North West (Kaduna, Katsina, and Kano).
“We also envisage that logistics will be a challenge for most suppliers especially those in the North east with prices as high as N600,000 – N700,000 for deliveries to the South Western States,” the report added.
Commenting on the soybean outlook demand side dynamics, AFEX noted that the local demand for the commodity has over the years outweighed the local supply of the product and by a significant margin.
“Demand players have positioned themselves strategically to mop up volumes at farm gate. We anticipate a conservative 25 percent – 30 percent differential between market prices for grains at point of harvest in mid – late November and Peak period in July/ August. The market is basically liquidity driven with products going to the biggest pockets,” it noted.
On the strategy to adopt, “We recommend a dual strategy with an objective to achieve volume targets, but at a comparative price advantage to the competition. Aggressive trade volumes but with a closed pricing approach, so the market isn’t further upset. Aggressive stock build-up at farm gate/AFEX Warehouse for shipment in June/July.”
Business Post reports that as the time of filing this piece on Thursday morning, prices of Soybeans were up by 5.72 percent at N130,020 on AFEX.
