Cocoa futures in New York have reached a historic pinnacle with the most-active contract hitting an all-time high of $11,578 a metric ton in early trading on Friday.

This surge comes amidst a backdrop of challenges in the cocoa industry, including supply chain disruptions, adverse weather conditions, and rising production costs.

Despite these hurdles, the pace of processing in chocolate factories has remained constant, providing a glimmer of hope for chocolate lovers worldwide.

Data released after market close on Thursday revealed that cocoa processing, known as “grinds,” was up in North America during the first quarter, appreciating by 4% compared to the same period last year.

Meanwhile, processing in Europe only saw a modest decline of about 2%, and Asia experienced a slight decrease.

These processing figures are particularly noteworthy given the current landscape of cocoa prices. Since the beginning of 2024, cocoa futures have more than doubled, reflecting the immense pressure on the cocoa market.

Yet, despite these soaring prices, chocolate manufacturers have managed to maintain their production levels, indicating resilience in the face of adversity.

The surge in cocoa prices can be attributed to a variety of factors, including supply shortages caused by adverse weather conditions in key cocoa-producing regions such as West Africa.

Also, rising demand for chocolate products, particularly premium and artisanal varieties, has contributed to the upward pressure on prices.

While the spike in cocoa prices presents challenges for chocolate manufacturers and consumers alike, industry experts remain cautiously optimistic about the resilience of the cocoa market.

Despite the record-breaking prices, the steady pace of cocoa processing suggests that chocolate lovers can still expect to indulge in their favorite treats, albeit at a higher cost.

The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

As geopolitical tensions between Israel and Iran escalate, investors are seeking refuge in traditional safe-haven assets, particularly bonds, while crude oil prices surge on fears of supply disruptions.

The latest developments in the Middle East have sparked a rush to secure assets perceived as less risky amidst growing uncertainty.

With crude oil trading just over 1% higher, having given up earlier gains of as much as 4.2%, investors are closely monitoring the situation for any signs of real supply disruptions.

While there is currently no evidence of such disruptions, concerns persist that any escalation in tensions could affect oil flows through critical chokepoints like the Strait of Hormuz or lead to renewed attacks on ships in the Red Sea by Iran-backed Houthi rebels.

Edward Bell, head of market economics at Emirates NBD PJSC in Dubai, said it is important to assess whether there have been any tangible impacts on the physical supply or shipment of oil products, indicating that if the answer is negative, the premium may need to be recalibrated.

Meanwhile, Oman’s foreign ministry issued a statement condemning what it termed Israel’s repeated military attacks in the region in response to the blasts in Iran. This is the first reaction from Gulf Arab states to the reported Israeli strike on Iran.

The ministry also called for international efforts to focus on achieving a ceasefire in Gaza, where Israel is engaged in conflict with Iranian-backed Hamas, and to seek a resolution to the Palestinian issue.

Ziad Daoud, Bloomberg Economics’ Chief Emerging Markets Economist, argued that the ball is now in Iran’s court, with its next actions likely to determine the broader economic impact of the situation.

In the financial markets, bonds are emerging as the preferred haven for investors seeking safety amid the heightened tensions.

Bunds in Europe, together with Treasuries in the US, are expected to rally, reflecting investor appetite for low-risk assets.

Crude oil prices are also benefitting from the uncertainty, driven primarily by concerns over potential supply disruptions.

As investors navigate the evolving situation, the search for safe-haven assets underscores the cautious sentiment prevailing in global markets.

The geopolitical dynamics in the Middle East continue to shape investor behavior, with a keen focus on developments that could impact global economic stability.