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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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May 10, 2021

Sell the fact! West African commodities and a Trump presidency  


Commodities traded by West African producers fell sharply ahead of the US presidential elections and are yet to recover following confirmation that Donald Trump had secured enough electoral college votes to be declared US President-elect.

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Strong Coffee: (Cote d’Ivoire, Cameroon) Coffee futures traded both in London and New York dived lower on Tuesday as investors, who have helped make coffee one of the best performing commodities in the last 6months, took profit ahead of the US presidential vote. Markets have recovered some ground this morning and there are tentative signs that investor interest will return as markets digest and accept the political status quo.

Liquid Cocoa: (Cote d’Ivoire, Ghana, Cameroon) Cocoa prices remain on the backfoot following Donald Trump’s win. Cocoa markets have been under pressure since the start of the new season in Ghana and Cote d’Ivoire as the market discounts potentially larger output this season compared to last season’s el Niño-stunted harvest. That said, cocoa arrivals in top producer Cote d’Ivoire have been 30% below last year’s, as at October 31. As such, Cote d’Ivoire has stopped new forward sales of cocoa until January 2017 and this is providing marginal support for the market which dropped to a 3-year low on Monday.

Flimsy Cotton: (Mali, Burkina Faso) Cotton prices have reacted rather differently to cocoa and coffee. Cotton futures rose in late trading yesterday before falling in sympathy with most US denominated commodities post the US election. However, losses on the cotton market have been shallow and prices have regained some momentum in today’s trading. Longer term, West African producers should look to lock in prices at current levels as global output and harvesting are showing strong signs of recovery and could undermine the current strength in markets.

Safe haven Gold: (Ghana, Mali) News that a London based gold dealer is running out of bars and coins aptly summarises the performance of gold following the US elections. Gold prices surged in intraday trading today by nearly 5% before trending lower.  Chances of a US Federal Reserve rate hike in December are now slimmer which is supportive for gold prices.

Uncertain Oil: (Gulf of Guinea) “Trump means more US domestic energy production…plus a more inward looking and protectionist US is bad for economic growth globally, so less oil demand” according to AR Oil Consulting. However, other oil analysts believe a Trump presidency could either be bullish or neutral for energy prices. Markets will probably remain in ‘wait-and-see’ mode with limited upside in the near term.

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