Saturday, February 12, 2011

Goodbye Chocolate

Savour that chocolate while you can still afford it

"In the not-too-distant future, chocolate will become a rarefied luxury, as expensive as caviar."

"The industry has been ignoring a looming supply problem, one that’s been brought into sharp focus by a political eruption in Ivory Coast, the world’s top cocoa-producing nation.

Productivity on farms is not keeping pace with demand. Fatal diseases plague the crops. The soils cocoa grows in are depleted. Consumer demand, though, is growing. As standards of living improve in China and India, their new taste for chocolate keeps pace, feeding a worldwide consumption increase of about 2 per cent a year.

“We’re in a bit of a crisis as an industry,” said Chris Brett, vice-president of corporate responsibility and sustainability for Olam International, one of the largest cocoa-buying companies in the world, which sells beans to major chocolate producers, such as Cadbury, Mars and Nestle.

Alone, Ivory Coast produces more than a third of the world’s cocoa beans; there is some Ivoirien cocoa content in nearly every mass-produced chocolate bar on store shelves. But Alassane Ouattara, the presidential claimant in the country’s disputed November election, is using the crop as a political cudgel. His opponent, incumbent Laurent Gbagbo, has the loyalty of the army; cocoa revenues pay his soldiers. Recently, Mr. Ouattara imposed a ban on all cocoa exports, hoping it will force Mr. Gbagbo to leave office, a move which the U.S. and the E.U. support. So far, Mr. Gbagbo has refused. Fears are mounting that Ivory Coast will erupt in civil war.

The uncertainty has set off panic among global chocolate powerbrokers. Their worry is less about this year’s harvest, 70 per cent of which has already been extracted (the season runs from October to February); the concern is over next year’s crop – and the years that follow. Regardless of how much they can pay for increasingly expensive cocoa – futures hit a 30-year price high last month – there will simply not be enough produced.

Both Ivory Coast and neighbouring Ghana, the world’s second-largest cocoa producer, are on course for an ecological implosion. Their tree stocks are aging and sick; soils are depleted, temperatures are rising and rainfall is erratic. Young farmers are disinterested in growing cocoa, which is associated with poverty, and they are leaving for low-paying but more predictable jobs in the city. Those who stay in rural farm areas are struggling to keep up with demand and have little to invest in farm rehabilitation.

Few have any idea how to solve this multifaceted crisis."

Someone was really paying attention last July.

Who’s buying up the world supply of Cocoa Beans?

"The purchase was enough to move the entire global cocoa market, sending the price to the highest level since 1977, and triggering rumours and intrigue in the City.

It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years.

The cocoa beans, which are sitting in warehouses either in The Netherlands, Hamburg, or closer to home in London, Liverpool or Humberside is equivalent to the entire supply of the commodity in Europe, and would fill more than five Titanics. They are worth £658 million.

Analysts said it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market. By doing this, they would have control of the entire supply in Europe, forcing the price yet higher"

For a while I believe this is how the food crisis will go, certain items just blinking out. Mostly foreign, specialized foods that will simply become unavailable.
Aside from buying up all the Cocoa Puffs you can get your hands on, if I were to speculate on one of the next food items that will get so expensive and rare here in the US that hardly anyone would have it in his or her pantry it would be olive oil. American production is negligible, somewhere around #22 in the world, only enough to fill one percent of our demand. As the depression gets much worse, shipping will halt and since Spain, Italy, Greece and Tunisia account for 80% of world production, say goodbye to olive oil too. Too bad because it's so good for us. Far better in our diet than corn or rapeseed.
Fortunately it's still relatively cheap. If you can, forget the small, expensive bottles on the shelves in supermarkets and go to Costco. Gallon jugs were still under twenty bucks a few weeks ago. Since olive oil is the only stuff we use I stocked up.


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