Cocoa Sees Price Increase After One Sale of 241,000 Tons Pushes Market

A London millionaire buys 241,000 tons of cocoa beans.

A London millionaire buys 241,000 tons of cocoa beans.

Last Friday, the largest single cocoa trade in 14 years, was made by London’s Armajaro Holdings for the benefit of Anthony Ward.  His purchase wa responsible for moving the entire global cocoa market because it was so large.  He brought 241,000 tons of cocoa beans which is enough for about 5.3 billion quarter-pound chocolate bars.

Mr. Ward, who is worth 36 million pounds, was once the Chairman of the European Cocoa Association.  He has amassed up to 15 per cent of the world’s cocoa stocks in the last decade.  Cocoa is not his only specialty as he regularly trades in coffee as well.

The fact that Mr. Ward holds such a large part of the cocoa market he could force a rise in manufacturing pricing.

While Mr. Ward lives in Mayfair in London not all of those cocoa beans are expected to be housed in London.  They are expected to be divided between his warehouses in the Netherlands, Hamburg, Liverpool, Humberside and some part in London.  The amount of cocoa bean purchased on Friday pushed the cocoa prices to rise 0.7 per cent to 2,732 per metric ton.  This is the highest seen for cocoa since 1977.

Mr. Ward probably made the deal because of the weak crops in Ghana and the Ivory Coast.  The amount harvested was short by standards from the past years in that area.  In 2002 when West Africa bought 204,000 tons of cocoa and made 40 million in tow months from the purchase.  In that time the price of cocoa rose from 1,400 a ton to 1,600 a ton.

The demand for chocolate is so large right now that not only are chocolate makers being forced to raise prices many are reducing the amount used in their recipes to hold down costs.

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