The summer of 2010 saw cocoa prices shoot up, much to bears’ skepticism. They said there was no fundamental reason for the move: It was just a hedge fund manipulation.
On that notion, coca prices fell from a 33-year high at over $3,400 a metric ton down to about $2,600 in September. But the bearish view proved wrong in the end.
Any intelligent observer can see the big problems brewing in the Ivory Coast. Accounting for 40% of global supplies, the country is the world’s largest coca bean producer.
That key chocolate ingredient factors in heavily to the Ivorian economy. Cocoa is its biggest source of revenue, with sweet bean sales valued at $45 billion annually.
But the country’s cocoa trees have long-term problems, not to mention major political problems. And the latter has pushed coca prices back up above $3,300 once again.
Never Mix Chocolate and Politics… at Least not in the Ivory Coast
On November 28, 2010, the Ivory Coast elected a new leader, Alassane Ouattara. But while the United Nations certifies that victory, sitting president Laurent Gbagbo refuses to leave … and he has the full support of the military.
Countries around the globe are imposing sanctions on the Ivory Coast, but Ouattara has taken that idea a step further. He has called for a 1-month ban on cocoa exports and most other nations – including the U.S. – have signed onboard.