Com­modi­ties ex­change records in­creased par­tic­i­pa­tion, de­mand

The Punch - - CAPITAL MARKET -

AFEX Com­modi­ties Ex­change Lim­ited said the com­modi­ties mar­ket was highly com­pet­i­tive in 2019 with a sig­nif­i­cant in­crease in the num­ber and so­phis­ti­ca­tion of buyer par­tic­i­pat­ing in the mar­kets.

In its 2019 mar­ket re­view, AFEX said the de­mand-sup­ply ra­tio of the co­coa mar­ket in­creased from 3:1 to 6/7:1.

It added that the grains mar­ket also showed sim­i­lar de­mand-sup­ply dy­nam­ics with maize, soy­bean and paddy rice in­creas­ing by 4.72

per cent, 5.99 per cent and 10.32 per cent re­spec­tively.

It noted that to in­crease the chances of ful­fill­ing or­ders and achiev­ing the pro­cure­ment tar­gets of off-tak­ers and in­dus­trial users along the var­i­ous value chains in the coun­try, it would en­sure the ag­gre­ga­tion dur­ing har­vest pe­ri­ods to en­sure an ad­e­quate sup­ply of com­modi­ties dur­ing the lean sea­son to mit­i­gate price shocks.

AFEX said ow­ing to the cash im­pli­ca­tions of the first strat­egy, an al­ter­na­tive ag­gre­ga­tion

strat­egy would be the use of the wide net­work of traders trans­act­ing on the ex­change to pur­sue fast ag­gre­ga­tion.

It stated that the com­modi­ties mar­ket in Nige­ria was de­servedly gain­ing strength as more play­ers got in­volved in a va­ri­ety of ac­tiv­i­ties along com­mod­ity value chains.

The re­port read in part, “This in­creased in­volve­ment has led to a growth in the value chains as play­ers sup­port more seam­less trans­ac­tions in the in­dus­try.

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