Why Are Cocoa Prices Rising

The weather has an impact on the procurement of grains and makes it very volatile.  In 1990 a poor harvest contributed to low inventories and sales volume.   Willis

Next I will need to conduct a total cost analysis to see how much it would be to purchase cocoa. The monthly cost of cocoa beans fluctuates monthly. In January, 2010 cocoa beans were being sold at their highest- $3,525.12. Currently, cocoa beans are sold for $2,730.20. It may be wise to purchase a larger amount of cocoa beans when the cost of them declines, to save

There is a high bargaining power of suppliers because of the need of the key ingredients required for chocolate manufacturing and limited number of suppliers for this industry. Since cocoa trees require tropical climate, it forces the main producers in the west to import them from countries in West Africa or other hot places

Côte d’Ivoire’s mass production practices lead to the cocoa trade becoming a highly influential economic factor (Losch, 2002, p. 210). Because of this, paired with governmental involvement in the sector, dreams of dominating the cocoa market and influencing prices naturally followed (Losch, 2002, p. 210). Unfortunately, market power is more complicated than supplying the majority of product. However, attempts to control the price of cocoa by pulling out of the market temporarily proved disastrous, ultimately aiding the other producers by reducing the competition (Losch, 2002, p. 212). Côte d’Ivoire also quickly realized that it was too dependent on the cocoa trade both economically and politically to employ this tactic for long

1. How significant (quantitatively) of a problem is the mismatch between supply and demand for L.L. Bean?

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The middle men who buy the cocoa from the farmers do not tell the farmers the current prices for cocoa, thus preventing the farmers from making a profit and enabling them to pay their workers. The chocolate companies buy the refined cocoa from these middle men, and sell finished chocolate products that were partially produced through slave labor. The consumers

The premium chocolate market has been growing at 20% annually, showing that buyers are willing to pay more for a better tasting and better quality chocolate. The declining growth of the overall chocolate market and rapid growth of the premium chocolate market is positive for current producers of premium chocolates in that the decline

Professor David Guest, claims that a worldwide shortage of cocoa should take effect in 2020. He says there are a number of reasons for this expected dearth. About 70 percent of cocoa beans come from West Africa which has had political and social upheaval in past couple of decades. In Indonesia there are pests and diseases, and farmers grow more profitable crops than cocoa beans. He says that intense labor is also a problem with growing cocoa to. A cocoa tree grows to harvest age in three years, and then you can harvest it regularly for 15 to 20 years if you take good care of it. In order to keep these trees alive you need laborers as well, this is a problem with the labor shortages. A lot of laborers are not healthy

Climate change is a major factor, that impact the growth in cocoa. Cocoa is produced mainly in the rainforest area of the country, known as the cocoa belt. The increasing rates of climate change have a major influence on the 3 stages of cocoa productions, which are the seedling phase, establishment phase and processing phase. This is a result due to the fact that most of the production is based around the climate for an instance for warming the soil, plants, air and metabolic processes solar radiation produces energy. When to plant cocoa seeds is regulated when rain starts and may become unpredictable due to climate change which may then destroy the survival of the crops. Climate change helps determine the economic value to the cocoa. Cocoa

These shifts in supply and demand would influence price, quantity, and market equilibrium because of the natural disasters, shift in prices or speculation the supply of coffee decreases, which would cause a significant product shortage for consumers. Due to a shortage, consumers would to pay higher prices in order to purchase coffee and all coffee producers would then demand a higher price in order to produce more products. Higher prices are beneficial to the producers of the product, but consumer would purchase fewer products. Lower product pricing would discourage coffee production, but would benefit consumers. Both supply and demand would balance consumption, which is demand and production, which is supply.

Figure 4b shows that as a result of a decrease in banana suppliers in the market, the supply curve shifts upwards causing the equilibrium price and equilibrium quantity of bananas to decrease. Figure 4b also depicts that at a higher

Thus, this paper would focus on the question that “ what cause the decline of Ghana’s chocolate industry in the mid-twentieth century?” Some scholars believe that the farmers could not afford the cost of maintaining the cocoa trees from pest and diseases, which lead to the decline of the cocoa industry. A better answer to this question is that the cocoa industry in Ghana was prone to the control of large organizations which were solely looking out for their own self interests. First, the government in Ghana made specific policies targeted at the cocoa industry in order to gain huge tax revenue. Moreover, the Ghana Cocoa Marketing Board manipulated the cocoa surplus from the farmer to earn a profit in their own coffers. Finally, large chocolate companies controlled the market price for cocoa to maximize their profits. The demise of the cocoa industry in Ghana is significant for understanding the vulnerability of Ghana’s economy when the country rely heavily on cocoa beans as the cash

A recent report from HSBC isn’t quite so alarming…unless you read between the lines. “World agricultural markets,” it says, “have become so finely balanced between supply and demand that local disruptions can have a major impact on the global prices of the affected commodities and then reverberate throughout the entire food chain.”

The natural environment involves Cocoa beans that are needed by Whittaker’s to produce their chocolate products. Over the next few years, the world is expected to face a chocolate ‘drought’, leading to soaring prices of cocoa beans due to insufficient consumable cocoa to chocolate manufacturers. (Western farm press, 2011)