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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="569" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-820x569.jpg" alt="" class="wp-image-470766" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-820x569.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-300x208.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-130x90.jpg 130w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-768x533.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-1536x1065.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/GettyImages-480163885-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">THE HAGUE, NETHERLANDS &#8211; MARCH 23:Dutch Prime Minister Mark Rutte meets with the President of the People&#8217;s Republic of China Xi Jinping at the Catshuis March 23, 2014 in The Hague, Netherlands. The Nuclear Security Summit, held March 24-25, will be attended by world leaders and is aimed at preventing nuclear terrorism. (Photo by Valerie Kuypers-Pool/Getty Images</figcaption></figure>



China’s technological progress cannot be stopped, Chinese President Xi Jinping told Dutch Prime Minister Mark Rutte when they met in Beijing Wednesday for talks on areas such as the critical semiconductor industry.



“The Chinese people also have legitimate development rights, and no force can stop the pace of China’s scientific and technological progress,” said Xi, according to Xinhua News Agency.



Xi said China will “continue to pursue a win-win approach.”



Relations between China and the Netherlands have been strained since the the Netherlands, together with the U.S., blocked exports of advanced chip technology to China over concerns they could be used for military purposes.



Semiconductor chips are critical components which can be found in everything from smartphones to automobiles.



Dutch tech giant ASML has been barred from exporting extreme ultraviolet lithography machines to China — it is the only company currently capable of making such machines To date, it has not shipped a single EUV machine to China yet.



Such EUV lithography machines are crucial for chip manufacturing and are used by companies like Taiwan’s TSMC to make the smallest and most sophisticated chips.



In January, the Netherlands barred ASML from exporting some of its deep ultraviolet lithography systems to China, which are used to make slightly less advanced chips.



Beijing slammed the Dutch government’s move, urging the Netherlands to “uphold an objective and fair position and market principles” and “protect the shared interests” of the two countries and their companies.



“Creating scientific and technological barriers and severing industrial and supply chains will only lead to division and confrontation,” Xi said Wednesday, according to Xinhua state media.



He said cooperation is the only way and added that “decoupling and breaking the chain” is not an option.



Xi said China is ready to continue dialogue with the Netherlands and urged the Dutch side to “provide a fair and transparent business environment for Chinese enterprises.”



According to Reuters, Rutte said Wednesday the Netherlands tried to ensure that export restrictions, when related to semiconductor industry and companies like ASML, are never aimed at one country. “We always try to make sure the impact is limited,” he was quoted as saying.



Chinese state media reported that Rutte responded by saying decoupling is not a policy choice for the Dutch government either, “since any act undermining China’s development interests will only boomerang.”

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="450" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/JSE-Transcribe-Image-820x450.png" alt="" class="wp-image-470515" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/JSE-Transcribe-Image-820x450.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/JSE-Transcribe-Image-300x165.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/JSE-Transcribe-Image-160x88.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/JSE-Transcribe-Image-768x422.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/JSE-Transcribe-Image.png 991w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



South African fund managers expect the benchmark all share index to advance more than 10 percent to a record in the next year, outperforming cash as the economy recovers from record power shortages and lower interest rates amid lower inflation.



The JSE All Share Index is forecast to reach 81,000 points in 12 months, according to the Merrill Lynch survey titled Strong, patient, equity bulls. The survey found a net 80 percent of managers are overweight domestic stocks with banks and software companies as favourites. No one wants to increase their cash portions.



`&#8221;One of the most interesting things that have come out of the survey this time around is just how many more local investors have turned into equity bulls and how many more have also turned into cash bears,&#8221; John Morris, Merrill Lynch South Africa Strategist told CNBC Africa. &#8220;So that&#8217;s a sign of risk appetite. It&#8217;s a sign of confidence on other assets like your equities.&#8221;



South Africa’s economy almost tipped into a technical recession in 2023 amid the country’s worst power cuts in history, rising inflation and the highest interest rates in 15 years. Growth is expected to almost double this year after the government opened power generation to private investors and households.



The country’s central bank is expected to begin cutting interest rates from the second half of the year, reducing pressure on consumers, though fund managers in the survey picked weak earnings as one of the risks to keep an eye on in the next 12 months, alongside potential policy shifts to the left after May elections that may see the ruling African National Congress party lose its majority for the first time since 1994.



&#8220;While the rate cuts may be more shallow compared to historical trends, they still present opportunities for investors in the equity market,&#8221; Morris said.



Over the year, fund managers see equities’ total returns at 15 percent, with bonds expected to return 20 percent.



The survey revealed that around 87% of fund managers anticipate the first rate cut by the South African Reserve Bank to be implemented in the third quarter of the year, with a gradual cutting cycle expected.

JSE-Transcribe-Image

South African Fund Managers Prefer Stocks in the next year

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-820x462.jpeg" alt="" class="wp-image-470467" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A farmers holds cocoa beans while he is drying them at a village in Sinfra, Ivory Coast, on April 29, 2023. Luc Gnago | Reuters</figcaption></figure>



Consumers could start to see the effect of surging cocoa prices as the world faces the worst supply deficit in decades, with farmers in West Africa struggling against bad weather, disease and failing trees.



Cocoa futures for May delivery surged to an all-time intraday high of $10,080 per metric ton Tuesday before ending the day down 0.3% to settle at $9,622. Cocoa has more than tripled in cost over the past year and is up 129% in 2024.



Hershey CEO Michele Buck told CNBC last month that the company has a hedging strategy to manage the price volatility. The National Confectioners Association told CNBC in an email that the industry is working with retailers to “manage down costs” and keep chocolate affordable for consumers.



Though the large chocolate companies were well-hedged last year and did not have to immediately pass on high prices to consumers, there is only so much the industry can do to absorb costs, said Paul Joules, a commodities analyst at Rabobank.



The world is facing the largest cocoa supply deficit in more than 60 years and consumers could start to see the effect at the end of this year or early 2025, Joules said. The International Cocoa Organization has forecast a supply deficit of 374,000 tons for the 2023-24 season, a 405% increase from a deficit of 74,000 tons in the previous season.



“The worst is still yet to come,” Joules said. Cocoa prices will likely remain elevated for some time because there are no easy fixes to the systemic issues facing the market, he said.



Consumers could face higher prices or “shrinkflation” in the form of smaller chocolate bars, Joules said. Companies might also adjust ingredients to use less cocoa in some products, he said. The worst sticker shock would come from dark chocolate, which has a very high cocoa content, the analyst said.



David Branch, sector manager at Wells Fargo’s Agri-Food Institute, said consumers could see higher prices as soon as Easter, which is on Sunday.



“Given that cocoa prices and other manufacturing costs have been rising steadily over the past year, it is likely consumers will see a price spike on chocolate candy this Easter,” Branch told clients in a research note this month.



Cocoa prices have been on a tear due to supply disruptions in the key producing nations of Ivory Coast and Ghana, Joules said. The two countries represent about 60% of global cocoa production.



Crops have been hit by black pod disease and swollen shoot virus and many trees are past their maximum yield potential because there has not been a major round of planting since the early 2000s, Joules said.



Heavy rains exacerbated the disease issues, Branch said, and the El Niño weather phenomenon has also led to drier conditions resulting in lower cocoa yields in previous years. Seasonal harmattan winds were more extreme this year, also affecting crop yields, Branch said.



Farmers in Ivory Coast are increasingly exiting cocoa production for more lucrative crops such as rubber, Joules said. The governments of Ghana and Ivory Coast set fixed prices for the farmers at the start of the season so they are not benefiting from the currently rally, the analyst said.



The recent runup is likely due to panic among some commercial buyers rather than market speculation, Joules said. Buyers see the magnitude of the supply deficit and are trying to secure the cocoa that is available, according to the analyst.



Speculators contributed to the early leg of the rally last year as they bet on higher prices by increasing their long positions, Joules said, but they have been exiting those positions this year to book profits.



The spike in prices has hit chocolate giant Hershey, which sees flat earnings for the year. Hershey stock is down about 22% over the past 12 months, while Nestle’s Switzerland-listed shares have shed about 13% during the same period.

107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices

Cocoa prices are soaring to record levels. What it means for consumers and why ‘the worst is still yet to come’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107251051-1685980909876-IMG_0399-820x462.jpeg" alt="" class="wp-image-470431" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107251051-1685980909876-IMG_0399-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107251051-1685980909876-IMG_0399-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107251051-1685980909876-IMG_0399-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107251051-1685980909876-IMG_0399-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107251051-1685980909876-IMG_0399.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The Worldwide Developers Conference stage. CNBC/Kif Leswing</figcaption></figure>



Apple on Tuesday announced that its annual developers conference, WWDC, will take place June 10 through June 14.



The conference will be livestreamed on Apple’s website, although the company is inviting some software makers to its campus on the first day to “celebrate in person,” Apple said.



At this year’s conference, Apple could reveal its long-awaited artificial intelligence strategy and consumer features. In February, Cook said Apple was “investing significantly” in AI and teased an AI-related announcement “later this year” that many analysts believe will come at the Worldwide Developers Conference.



Apple typically reveals the latest versions of its iPhone, iPad, Mac and Apple TV software at WWDC via a “keynote” video on the first day, led by CEO Tim Cook and other Apple staff, which is also streamed on YouTube. At some past conferences, the company has also revealed new professional-oriented hardware, such as Mac laptops.



At this year’s conference, Apple also plans to reveal the first major software update to the Vision Pro, the virtual reality headset it launched earlier this year.

107251051-1685980909876-IMG_0399

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Could eVTOLs replace helicopters?

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Banks are being targeted in anti-Israel boycotts

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South African Fund Managers Prefer Stocks in the next year

Cocoa prices are soaring to record levels. What it means for consumers and why ‘the worst is still yet to come’

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