Oversupply, Weak Demand Drag Key Commodities Lower in November — Afreximbank
A wave of oversupply and softening global demand pushed several major commodities sharply lower in November, with cocoa, palm oil, platinum, sugar and silver emerging as the weakest performers, according to Afreximbank’s Commodity Market Insights. The bank’s assessment shows markets adjusting to improved production conditions, shifting consumption patterns and cautious investor behaviour.
At the centre of the month’s downturn was cocoa, which saw the most pronounced correction. The bank reported that prices “tumbled toward $5,200 per tonne” as crop prospects strengthened across West Africa. Better Ivorian harvests, favourable drying weather and rising deliveries to ports reduced fears of an acute shortage that had previously driven the market to record highs. Market sentiment was further dampened by “expectations of upcoming U.S. tariff reductions,” which Afreximbank said added another layer of pressure.
Palm oil’s decline reflected a different dynamic: strong production meeting weak appetite. Output from Southeast Asian growers remained robust at a time when major importers such as China and India slowed their purchases. Malaysian stockpiles have now reached their highest level in more than six years. Afreximbank pointed out that the commodity’s recent price premium over other vegetable oils encouraged buyers to opt for cheaper substitutes, reinforcing the downward trend.
Industrial metals were not spared. Platinum slipped as the investment climate turned more cautious following hawkish signals from the U.S. Federal Reserve. Prices fell to about $1,547 per ounce, with Afreximbank noting that weakened automotive demand linked to rising electric vehicle adoption, continued to weigh on the metal. Although long-term supply challenges remain, the report highlighted that “subdued industrial activity” kept prices under pressure in the near term.
Sugar markets also softened as global production recovered strongly. Strengthening output in Brazil and India, combined with reduced ethanol demand, shifted the balance decisively. Afreximbank cited “easing weather concerns” and projected an almost 2-million-tonne surplus for the 2025/26 season, a stark contrast to the deficit recorded in the previous year. Lower oil prices have encouraged mills to prioritise sugar output over ethanol, deepening the price slump.
Silver experienced a corrective pullback after earlier gains, driven largely by profit-taking and a drop in safe-haven demand as U.S. monetary policy signals became clearer. Even so, the bank maintained that long-term fundamentals remain intact, pointing to steady demand from solar power, electric vehicles and advanced electronics.
Collectively, the performance of these commodities reflects a market recalibrating after months of volatility. With supply conditions improving across multiple sectors and global industrial demand still moderate, Afreximbank’s analysis suggests that pricing pressures may persist until broader economic momentum strengthens.
