10 Jul 2007
The food of the gods has gotten significantly more expensive.
Cocoa futures reached a four-year peak this week, as worries about tight global supplies of the chocolate bean were compounded by renewed political violence in the
Last week, a plane carrying
Although the attack did nothing to interrupt cocoa supplies, the cocoa market -- much like the markets for crude oil and other commodities -- often reacts to violence in producer nations by driving up prices as buyers rush to secure supply.
The price of cocoa -- seed of the cacao tree, whose botanical name means "food of the gods" -- has climbed 12 percent in five weeks and is up by a third so far this year, according to Thomson Financial data.
Prices surged in 2001 as civil war broke out in the
The risk that political violence will reduce supply from the
Meanwhile, arrivals of cocoa at ports in the
Although he doesn't expect prices to return to the peaks of 2003, Hightower said "there is no reason for the market to not grind its way higher until we get a resolution: Are we going to get the crop out of the
It's not clear whether the recent run-up in cocoa futures will trickle down to the candy aisle. But the price of a chocolate bar is already poised to rise, thanks to sharply higher milk prices. Hershey Co. announced earlier this year it would raise prices 4 percent to 5 percent on roughly a third of its products. Other candy makers have announced price hikes, as well.
"Although cocoa prices get a lot of attention, they are a relatively small part of the overall cost of a chocolate bar at the supermarket," said S&P equity analyst Tom Graves. "Dairy prices have been more of problem than cocoa prices."
Source: yahoo.com
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