Cocoa Price is going up: Will You Eat More Chocolate?
Valentine’s Day is today and the price of cocoa in the Ivory Coast at the opening of the market has been rising. In fact, the cocoa selling futures prices published Thursday by the Council of coffee and cocoa, at the opening session of the sales, recorded a rise in price even more than coffee that still continued its upward trend.
New research have recently showed that the battle for control of the cocoa market is reaching new grounds. The bean that was traded so far in dollars (in New York) and GBP (in London), will soon be in euros. For one of the two protagonists, Intercontinental Exchange (ICE), which already owns the US and London markets , intends to launch a third in April, still in London but with contracts denominated in the European currency through its subsidiary, ICE Futures Europe. The Atlanta-based intends to catch up – and stay ahead.
Early this year, the stock market has slightly stabilized, but the ICCO (International Cocoa Organization) sounded the alarm on 23 January. The world production of 4.365 million tons, demand in 2014 exceeded supply, so the cocoa bean stocks fell by 19 000 tonnes via le matin.
The beginning of the campaign producers guaranteed minimum prices remain unchanged with 850 CFA francs / kg for cocoa and 650 CFA francs / kg for coffee. Prices will continue to go up and all these middlemen can be at the cause of it all. Indeed, futures sales and coffee released Thursday by the Council of coffee and cocoa, at the closing of the sale session, keep an uptrend. Read more via AfricaJet
The rival Chicago CME Group, in June 2014 announced its intention to launch in Europe this year similar projects for Olam. Among the giants of the transformation of the bean, there is of course the American Cargill and the Swiss Barry Callebaut . Now There Is also the Singapore Olam Full Refocusing strategy, the Asian Group announced on December 16, the purchase of cocoa activities of the American Archer Daniels Midland (ADM), one of the historical leaders in this field.
Transaction amount: $ 1.3 billion (1 billion euros). This concerns bean processing plants in Seven Countries (Netherlands, Germany, Brazil, Singapore, Canada, Côte d’Ivoire and Ghana), with a total capacity of 600,000 tons per year, ten warehouses, innovation oven centers. More via Jeune Afrique
It didn’t surprise me but many were shocked when chocolate manufacturers had announced for more than six months that the price will go up. When you think that a meteoric rise in the value of the cocoa bean which was seen only in the highest sphere of commodity specialists, far from the caddies, seemed unthinkable years ago. But the surge of cocoa is now very real for the consumer. After Lindt last summer, it is now Nestlé that took the plunge. A Cailler plate now sells 2 fr. 30 instead of 1 fr. 95, an increase of over 15%.
Information confirmed by Philippe OERTLE, head of communications at Nestlé: “The raw materials such as cocoa butter, cocoa beans, hazelnuts, almonds were much appreciated in recent times, with growth of around 20% 30% or 100% depending on the quality and origin of raw materials”.
Last but not least, we all love chocolate, but what price are we willing to pay for this chocolate? I recently listened to this interview that takes a look at the future of cocoa. The expert is François Ruf economist International Cooperation Centre in Agronomic Research for Development, CIRAD. Check out the full interview here
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