GECAM
Groupement des Entreprises du Cameroun
Monthly Economic Review By GECAM
N°002 of July 2024
# 1. Major commodity prices
Wheat. Wheat prices remained on the same down trend in July. They averaged coast around $202.3/tonne, down by 7% on June and 19% on the same period in 2023. The decrease is the result of abundant supply, which is in fact allowing a gradual return to the average flows between August 2023 and March 2024, i.e. close to $214/t.
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Cocoa. The cocoa prices fell by 10% in July compared with June, to $7,999.3/tonne. However, it is still well above the level seen in 2023 at the same period, i.e. $3290. per tonne.
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Coffee. Unlike cocoa, the coffee price keeps its upward momentum, with a further monthly average rise of 4% in July and an annual rise of 49%. Adverse climatic conditions in the main producing countries (Vietnam in particular, with 40% of supply) are behind the uptrend in prices since the end of the year 2023.
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Cotton. The cotton prices has been on a downward trend since April 2024, after reaching a peak of $34.5/t in March and $25.6/t in July, compared with $26.5/t in June (down 4%) and $30.7/t in July 2023 (down 12%).
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Oil prices. In July 2024, the price of crude oil rose by 2.4% month-on-month to $85.06/barrel. This level is still below the turning point experienced in March (89.14), but significantly higher than in July 2023 (79.57%).
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GECAM Groupement des Entreprises du Cameroun Monthly Economic Review By GECAM N°002 of July 2024
2. Sub-regional Economic News
1. Foreign exchange reserves: dependence on fuel imports impacts the level of reserves
According to data from the BEAC, expenditure on fuel imports cost nearly CFAF 976 billion. One of the immediate consequences is the deterioration in the stock of CEMAC reserves, which decreased from CFAF 7,617.7 to CFAF 6,642 billion in one year.
Cameroon, for example, saw its net transfer balance dropped to CFAF-225.9 billion, while Equatorial Guinea and Chad also experienced alarming declines.
Increasing oil production within the community through the rehabilitation or modernization of existing refineries is thus becoming a decisive factor for the stability of the monetary zone.
Monetary regulation: The BEAC alternates between injecting and reducing liquidity from banks
On 2 July 2024, the BEAC injected CFAF 165 billion into the CEMAC banking sector. The operation resulted in a subscription rate of 233% (i.e. CFAF 385 billion that could have been absorbed).
This injection operation was followed between 8 and 22 July by successive attempts to withdraw liquidity totalling 150 billion through the issuance of securities with a maturity of 14 to 28 days and an interest rate of 2.5%. The low subscription rate (36%) reflected the reluctance of the banks and may indicate an insight from banks of an opportunity in the economy that supports the choice of taking risks rather than rely on BEAC securities.