African Export-Import Bank (Afreximbank) has warned that worsening climate risks, including the possible emergence of a “super” El Niño weather pattern, could inject fresh volatility into global commodity markets even as lithium demand strengthens and cocoa prices retreat from historic highs.
In its latest commodity bulletin, the Cairo-based trade finance institution said lithium remained the world’s top-performing commodity this year despite a recent pullback in prices, driven by expanding demand for electric vehicles, grid-scale battery storage and AI-linked data center infrastructure.
The bank said Africa was rapidly emerging as a strategic supplier of lithium, with the continent projected to account for as much as 15% of global production within five years, up from about 4% in 2023.
“Africa has rapidly emerged as the fastest-growing producing region globally,” the report said, adding that the lender was increasingly focused on financing mineral processing and integrated industrial value chains rather than raw commodity exports.
The comments reflect intensifying competition among resource-rich African countries to position themselves within the global clean-energy supply chain as demand rises for battery minerals including lithium, cobalt and copper.
Afreximbank said the longer-term outlook for lithium remained constructive despite supply increases and recent price corrections, citing structurally tight markets, underinvestment in new mines and rising demand from energy storage systems supporting renewable power and AI infrastructure.
The lender contrasted lithium’s performance with cocoa, which it described as one of the worst-performing commodities this year after prices sharply reversed from record highs reached during the 2024-25 season. Cocoa futures had briefly approached $11,000 a ton before retreating as supply conditions improved and demand weakened.
Improved weather conditions in major West African producers including Ghana and Côte d’Ivoire helped shift the cocoa market from deficit into surplus, with industry estimates projecting excess supply of as much as 300,000 tons during the 2025-26 season, according to the report.
The bank also said elevated cocoa prices had triggered “meaningful consumption destruction” as major chocolate manufacturers including The Hershey Company, Mondelez International and Barry Callebaut reformulated products and reduced cocoa content to offset costs.
Beyond lithium and cocoa, Afreximbank said commodity markets remained vulnerable to geopolitical risks, weaker Chinese demand and supply disruptions across sectors ranging from oil and natural gas to copper and coffee.
The report highlighted growing concern over weather-related disruptions tied to the possible return of El Niño conditions (A naturally occurring climate phenomenon characterized by the warming of sea surface temperatures in the central and eastern tropical Pacific Ocean) later this year.
The bank said forecasts pointed to a high probability of a strong event developing between June and August and lasting into early 2027, potentially disrupting rainfall patterns across Africa, Asia and South America.
“The expected return of El Niño conditions therefore introduces a material source of systemic volatility across agricultural and related commodity markets,” the report said.
