West Africa Cocoa Production Threatened By Ebloa

Posted by: : Paul EbelingPosted on: October 12, 2014 West Africa Cocoa Production Threatened By Ebloa

West Africa Cocoa Production Threatened By Ebloa

Ebola is threatening much of the world’s Cocoa supply coming from West Aftica

Ivory Coast, the world’s largest producer of cacao, the raw ingredient in M&M’s, Butterfingers and Snickers Bars, has shut down its borders with Liberia and Guinea, putting a major crimp on the workforce needed to pick the beans that end up in Chocolate bars and other treats just as the harvest season begins.

The West African nation of about 20-M, also known as Côte D’Ivoire has yet to experience a single case of Ebola, but the outbreak could raise prices.

The World Cocoa Foundation is working now to collect large donations from Nestlé, Mars and many of its 113 other members for its Cocoa Industry Response to Ebola Initiative.

The initiative has not yet been publicly unveiled, but the WCF plans to announce details Wednesday, during its annual meeting in Copenhagen on how the money will fuel Red Cross and Caritas Internationalis work to help the infected and staunch Ebola’s spread.

Morristown, N.J.-based Transmar Group, an international Cocoa supplier, already has pledged $100,000, and Mars has indicated its support, too.

“As a member of the WCF and a supporter of the Cocoa Action strategy, Mars is pleased to see the industry coming together to help organizations on the ground in the prevention and eradication of the Ebola virus,” the company said. “We look forward to the WCF partnership meeting in Copenhagen next week where we will learn more about the industry effort.”

Ivory Coast, which produces about 1.6-M metric tons of cacao beans per year, about 33% of the world’s total, according to data from the United Nations Food and Agriculture Organization closed its borders in August to Guinea and Liberia.

More than 8,000 have been diagnosed with Ebola, and nearly 4,000 have died in those 2 countries and Sierra Leone. Next to Ivory Coast is Ghana, the world’s 3rd largest producer of cacao beans at 879,348 metric tons per year, or 15% of the world’s total.

The market is worried.

Prices on Cocoa futures have risen from their normal trading range of 2,000 to 2,700 per ton, to as high as 3,400 in September over concerns about the spread of Ebola to Côte D’Ivoire. Since then, prices have moved down to 3,030 and then back to 3,155 in the past couple of weeks.

Commodity Units Price Change % Change Contract Time(ET)
ICE Cocoa USD/mt 3,157.00 +100.00 +3.27% Dec 14 13:30:00

Stay tuned…

HeffX-LTN

Paul Ebeling

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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