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CEMAC sees commodity price rise in Q4 2023 but faces bleak outlook for 2024

CEMAC sees commodity price rise in Q4 2023 but faces bleak outlook for 2024
  • Comments   -   Monday, 04 March 2024 14:44

(Business in Cameroon) - Export commodity prices for the six CEMAC countries experienced a 1.3% increase in the fourth quarter of 2023, according to the Composite Commodity Price Index (CCPI) released on February 29, 2024, by the Bank of Central African States (Beac). In the previous quarter, the increase was 8.3%. The central bank attributes this growth to rising prices in the agricultural market sector. "The index of prices for major agricultural products exported by CEMAC countries rose by 8.0% to 153.29. This increase, starting since the third quarter of 2022, correlates with ongoing uncertainties in the global economic situation, affecting international markets for products like coffee, cocoa, and bananas," Beac explains.

The central bank also reported that climate change impacts have affected agricultural yields, while disruptions in supply chains have led to temporary shortages of other products such as rice and palm oil. "Positive variations were observed in the markets for cocoa (13.5%), rubber (9.5%), tobacco (5.2%), rice (4.5%), and coffee (3.0%)”, and the opposite trend was observed for metals and minerals (-0.9% after -3.3% in Q3 2023) and fishery products (-1.1% after 4.9% in Q3 2023) plus and a slowdown in forestry products (0.5%, after 0.8% in the previous quarter).

Although the prices for many raw materials remain historically high, "they are likely to normalize below last year's levels due to global demand stagnation," Beac cautions. According to data published by the World Bank in the "Commodity MarSkets Outlook" report of October 2023, commodity prices are expected to decrease by 4% in 2024, following a nearly 24% drop in 2023, marking the steepest decline since the Covid-19 pandemic. This downturn could dampen growth prospects for nearly two-thirds of the economies in the sub-region, which are highly dependent on these exports.

The CCPI is based on the prices of 20 commodities exported by CEMAC, representing 90% of the export values. The basket is divided into five main categories: energy products, metals and minerals, forestry products, agricultural products, and fishery products.

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