With the onset of a new crop season portending larger crop sizes in Ghana and Cote d’Ivoire, the “cocoa market is expected to be calm and cocoa prices could potentially decrease,” the mid-year Monetary Policy Report of the Bank of Ghana says.

It notes that prices will, however, remain high relative to the pre-spike level.

Also, it noted that the ongoing geopolitical tensions in the Middle East and the expectation of continued production restraint by some OPEC+ producers may continue to lend some support to oil.

Gold prices, the report projected, “may suffer losses as we move closer to possible Fed rate cuts in the second half of the year.”

In its report, the central bank said prices of Ghana’s key export commodities increased on the global commodities market as of the end of June 2024.

It said the weighted average price of the three major commodities exported by Ghana (cocoa, gold, and crude oil) increased in the month of June 2024.

The index rose to 196.68 from 190.74 in the previous month, representing an increase of 3.1 per cent.

The increase was on account of a rise in the cocoa and crude oil sub-indices, which was enough to outweigh the fall in the gold sub-index.

The cocoa sub-index grew by 11.1 per cent while the crude oil sub-index remained almost unchanged at 0.01 per cent and the gold sub-index fell by 1.1 per cent.

It noted that cocoa futures bounced back in June, reaching US$9,022.6 per tonne after a drop of 19.2 per cent in May.

Tight supply, spurred by extreme weather conditions and diseases amid increasing demand, supported the price increase, the report explained.

It said from January to June 2024, cocoa prices soared by 113.02 per cent, mainly on the back of tight supply.

Also, crude oil prices were broadly stable in June, gaining just 0.01 per cent to settle at an average price of US$83.01 per barrel.

The prices were supported by escalating geopolitical tension in Europe and the Middle East, notwithstanding OPEC+’s decision to boost supply later in the year, the report added.

It noted that since January 2024, crude oil prices have increased by 7.4 per cent, mainly due to concerns about supply disruptions due to geopolitical tensions and the planned output cut by OPEC+.

Spot gold dropped marginally by 1.1 per cent to close at an average price of US$2,325.34 per fine ounce in June 2024.

Gold prices were weighed down by a rising US dollar and increasing Treasury yields but losses were moderated by safe-haven demand amid tensions in the Middle East and rising bets that the U.S. Federal Reserve might reduce interest rates later in the year.

From the beginning of the year to date, gold prices have increased by 14.2 per cent, largely explained by the expectation of rate cuts by the Fed, and geopolitical tension that boosted the safe-haven appeal of the metal.