Why prices of cash crops dropped
According to the Nigerian Export Promotion Council (NEPC), in August 2024, Nigeria had declared a non-oil export sector impressive growth in the first half of the year by generating $2.7 billion in revenue. This development led to a surge in the prices of staple food and cash crops. It was also projected that the price would continue to surge in 2025. However, recent reports indicate that food and cash crops market in Nigeria was witnessing a decline in the prices, especially in the northern part of the country.
This trend is reflected in the commodity price index, which has dropped by over 25 per cent from N87 at the beginning of the year to N64 as at March 2025 as reported by Nigeria’s first licensed private commodities exchange, AFEX’s infrastructure and platforms.
During the surge, a lot of merchants invested heavily in the production of these cash crops, especially sesame and soybeans, with the expectation that there would be a huge gain as international demand on the commodity raised.
To many merchants, the drop in prices is temporary as demand by the international market remains very high, while other merchants feel that it is better to work with the reality and do the needful to remain afloat in the business arena.
Alhaji Aminu Gumel, a sesame merchant who claimed to have been in the business for over three decades, said he bought the commodity worth millions of naira for export, but his international business partners were yet to make any payment, contrary to what was obtainable years back.
He said, “It is clear that there has been a mad rush for Nigerian cash crops, such as sesame and hibiscus flower. However, many of us studied the trend last year and sent our men to mop-up the commodities from farmers. We paid more than what was required because we were optimistic that we will gain out of it. Ironically, what is currently happening goes contrary to our expectation as our international partners have asked us to wait. But the waiting period is getting too long and we were left with no option than to bring out the commodity and sell at the Nigerian open market price.”
It was also gathered that in Kano, this development resulted to price fluctuation, which is observed across many staple commodities. It is also believed that another reason behind the development is driven primarily by seasonal production cycles that are specifically attached to many cash crops.
According to Alhaji Sagir Bello Black a Jigawa State-based sesame farmer, under normal conditions, prices of commodities decline during harvest periods due to increased market supply but rise during the lean season. He added that another factor would lie in the production level because if it falls short of demand, it is due to insecurity or any other reason.
Similarly, for Alkasim Idris Ajingi, a merchant and farmer, Nigeria’s ginger production in 2023 faced a severe setback due to blight epidemic, a fungal disease that devastated crops nationwide. He revealed that in that year, about 70 per cent of the crops was affected and as a result, the price went high due to scarcity.
“Due to the epidemic, there was a drastic reduction in production and supply, which led to a six-fold increase in ginger prices over the years, escalating from N50,000 per bag to about N300,000.
“Farmers struggle to meet market needs when they face difficulties during planting seasons; and when supply dwindles, prices are bound to rise. This development had resulted to more production last rainy season although the price has also dropped a little,” he said.
An agricultural economist at Tryout Invest Limited, Mr Audu Tanga, said Nigerian commodities had enjoyed a sizable push under the trade and international demand statistical table. He explained that the Nigerian soybean market had recorded tremendous rise due to import restrictions on GMO-soybeans in 2023/2024 season by many countries.
Findings have shown that this development played a very important role in the increase in demand for Nigeria’s non-GMO soybeans.
“It was also revealed that as a result, Nigerian soybean exports skyrocketed by over 1,000 per cent, leading to a sharp increase in domestic prices, trading well above international market quotes.
“Soybean exports increased significantly from USD10.8 million in 2022 to about USD201 million in 2023, with domestic prices in northern Nigeria surging to over 1 million per metric. Unfortunately, the demand has dropped in 2025 because the demand for organic crops dropped,” he said.
However, recent findings have shown that a kilogram of soybeans, which sold at N1,300 last year, is now selling at N750. This development, according to Mr Chucks Idowu, an international soybeans merchant, is due to the fact that countries demanding for Nigerian soybeans are now growing their own organic commodities; and that has affected demand.
He further revealed that with the increase in soybeans price last year, a lot of people had hoarded the commodity; and now that the demand has fallen, they have no option than to bring it out and sell according to open market price.
Alhaji Abdullahi Usman, the chief executive officer of Mumin Foods Limited, said the drop in international demand for Nigerian crops by the international community was responsible for the recent drop in prices in the country. He explained that with the rising demand for Nigerian commodities, many business people had mopped up not only cash crops but also food crops from the markets. He added that the recent development that warranted countries to grow their crops and reduce importation forced the Nigerian commodity market to experience glut; hence the drop in the prices of some cash crops.
“People engaged in hoarding these commodities, especially when some foreign countries indicated interest in Nigerian crops because they are mostly organic and not genetically modified.
“It is clear that the business seemed to be flourishing at the initial stage and that had attracted more people. Unfortunately, the demand by these countries ceased or dropped unexpectedly, and that has necessitated the drop in the prices of these cash crops,” he said.
It was reliably gathered that a kilogram of sesame which sold at N2,300 last year is now selling at N1,600 and a kilogram of hibiscus flower sold at N2,300 last year is now selling at N1,500. Sources within the agro-business sector revealed that the price may still drop as demand by the international community keeps dropping.
A grain merchant at Dawanau International Grain Market, Kano, Alhaji Danliti Dauda, said it was widely believed that the falling prices offer only temporary relief to struggling households as it may not indicate a sustained long-term decline. Moreover, those who deal in cash crops are usually not affected negatively because they have what it takes to store the commodities till when the prices are favourable to them, he added.
Similarly, an economist at the Sa’adatu Rimi College of Education, Kano, Malam Hassan Ali, said the relative stability of the naira against the dollar had also played a role in easing import costs. He added that according to the Central Bank of Nigeria, the exchange rate for the US dollar to the naira has fluctuated between N1,478 and N1,551 from January 1, 2025 till date. According to him, this marks a decline of over 8 per cent from the N1,688 recorded in the last months of 2024.
It is also said that seasons play a role in price fluctuations in Nigerian agro-products as the timing of planting and harvesting cycles directly affects the supply of food commodities; and consequently, their prices. It is usually a tradition that weeks after harvest, there is a general reduction in prices of agricultural commodities due to surplus supply, while prices usually spike as stocks begin to dwindle.