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Across Your Markets

Change in commodity futures prices YTD May 8, 2020: Cocoa (-4.8%); Wheat (+3.7%); Maize (-17.5%); ICE Natural gas (-55%); Gold (+12.1%); Soyabeans (-23.1%); Cotton (-18.2%); Rough rice (+27.2%); Platinum (-18.5%); Arabica coffee (-15.1%); Brent crude oil (-53.3%); Copper (-14.6%); Sugar (-23.3%);     Whilst Africa's growth in 2020 could fall to its lowest since the 2008/9 global financial crisis, the asymmetric nature of shocks facing the region, coupled with increasing investment and cross-border trade, should help the region recover speedily.

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Monday, September 21, 2020

“Buckle-up chicks!”: Commodity markets are pummeled lower


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Two weeks ago, WTI crude for May delivery tumbled deep into negative territory. Some could argue the writing was on the wall when major #African producers failed to secure buyers from staple and long-haul markets, against a backdrop of severely limited storage capacity. Even now, markets in contango offer little comfort to naturally-long or speculatively-short participants.

Elsewhere, in #cotton, sagging global demand and more competitive pricing for #polyester (on account of low oil prices) have collapsed markets. Meanwhile, cotton merchandisers and distributors are having to pay more for storage and debt servicing, compounding the adverse effects on an already-fragmented supply chain; #Coffee could be a surprise winner as COVID-19-related labour shortages undermine harvests with at least a temporary uplift in prices.

As one cheeky airline captain once announced on a bumpy Florida flight… “Buckle-up chicks!”

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About FrancTrade

FrancTrade provides independent analyses and commentary as well as bespoke commodities market intelligence to global and regional corporate and institutional clients with a stake in the Francophone Africa CFA franc zone. FrancTrade also publishes one-off special reports on commodities and trade in strategic West African markets, including Nigeria and Ghana.