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Posts Tagged ‘cocoa price’Fair Trade Organic Cocoa Prices Now More StableWednesday, December 8th, 2010Foodtechnology reports that a standard new minimum price for fair trade organic cocoa was set and is to come into force in January 2011. This is great news for cacao growers around the world who are assured a minimum income regardless of price volatility in the cocoa market. Let us illustrate fair trade, organic chocolate at its best, both in taste and quality, with this sumptuous Chokola’j Assortment box: What Cocoa Production Fall's ImpactWednesday, April 29th, 2009Limited to none and here is why. The world’s largest cocoa producer, Ivory Coast, is reporting reduced cocoa input, which is to fall by about 25% in 2009 (first estimates were released at the start of the harvest season in October 2008). Although such change triggers natural upward pressure on price of cocoa on futures markets, prices have been going down ever since their highs in the first half of 2008 to reach new lows in March-April 2009. As stated in a previous post, inventory and production input have limited impact on cocoa price and today’s current events are illustrating again this fact. Speculation forces on the commodities futures market account for most of the cocoa price change. Despite an expected fall in cocoa production, its price on the commodities market is under downward pressure simply because speculators are withdrawing their positions from the market. Why Cocoa Price FallsWednesday, April 22nd, 2009After two years of inflationary prices across the globe, cocoa supply gets cheaper at last. This is a great news for many involved in the market, from producers of raw materials to end-consumers of finished chocolate products. High cocoa price penalizes producers, which are usually located in poor countries (Africa, South America), because more expensive supply means higher end-product price and lower demand, hence reduced market liquidity and stock turnover. We are committed to sourcing good value chocolate so that you can enjoy good quality chocolate at fair price. Moonstruck chocolates are the perfect illustration of a good value brand which we carry on Savorique.
The sad part of the news is that this fall in price illustrates the influence speculators have on global cocoa prices as they exit cocoa positions on the futures contact exchange (contacts for July delivery of cocoa). History has proven that sharp increase in cocoa price is not the result of cocoa bean shortage. Conversely, fall in cocoa price has not been the direct consequence of oversupply. The danger lies in artificial price volatility which obviously has a very nasty impact on soft commodities such as cocoa. It is artificial because this unwelcome volatility is triggered by investors pouring massive amount of money in futures cocoa contacts, tempted by potential gains on the commodity market. We feel it is important to make you aware of how soft commodity prices are determined so you understand why your favorite chocolate gets more expensive or cheaper (in rare instances). It is also important you spread the word and even contact the UN’s Food and Agricultural Organization (FAO) to share your concern. Staples (wheat, rice, cocoa…) should not be the subject of speculation. We know well it ends up most of the time by a price bubble, like the 2008 destructive real estate bubble. Stay positive by eating flavonol-rich chocolates!
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