Maize, Ginger and Soybeans are some of the soft commodities investors looking to diversify their portfolio with agricultural commodities can’t ignore this season for two reasons. Their cultivation thrives under rain-fed condition as: Ginger planting occurs from March to April; Soybeans June to July and Maize, March to May.
Second, their prices have not only been stable enough to guarantee off-taking deals according to commodity traders, ample return on investment could be generated when harvest begins.
Investing means that farmers lacking finance would be able to access adequate input supply to guarantee qualitative and quantitative yields.
With the commencement of wet-season, Nigeria’s smallholder farmers have begun tilting the land but many will, as usual, be confronted by fundamental needs of input supply and mechanisation services. No gainsaying that the success of a farming season lies heavily on the ability of a farmer to access quality inputs as and when due.
A good approach is to work with farmers under partnership with some of the structured digital agricultural platforms like Farmcrowdy, ThriveAgric or AFEX Commodities Exchange Limited.
“By facilitating access to financing for smallholder farmers to obtain quality inputs, it is an avenue for people interested in diversifying their investment portfolio. When farmers have these accesses,” Obianuju Okafor of AFEX Commodities Exchange Limited said.
“It means they can plant at the right time and get high yield. When they get their yield, it’s traded on the platform again and investors can get their return on it. It is a great way for investors to invest as we enter the input disbursement.”
AFEX Commodities Exchange Limited, for instance, pools funds from investors to foster planting activities, which afterwards generates commodities for trading on the platform. By harvest period when farmers would be hedging their produce for spot and futures trading, investors would also be set profiting.
Through AFEX wet and dry Season Input Program in 2018, which saw partnerships with LAPO Microfinance Bank, Dangote Rice, Thrive Agric, Farmcrowdy, OCP, and Syngenta, inputs worth $3.8 million was provided across eight states in the 2018 wet season to over 16,000 farmers.
A total volume of 277 metric tonnes was traded on the exchange in the week launching March, with paddy rice accounting for 88 percent of most of the total volume traded. The exchange sees demand for the key agricultural commodity’s driving continued growth, envisaging similar growth of Maize, Soybeans and Ginger.
Also, activities on the exchange have been on the uptick in terms of volume of soybeans and maize trading. Maximum prices for maize were recorded Kwara, Kaduna, for Soybean and Ginger respectively.
According to AFEX, market stability has been returning to the market in the aftermath of the election, suggesting that less uncertainty will surround the market.
The exchange commodities Index averaged 171.84 points this month, indicating 4.51 points higher than February and is expected to sustain the momentum in the coming weeks. For those who identify it, this is one of the best periods to invest.
