This is a bit of old news, it appeared in July, however the whole context of this kind of information is not new. For centuries greedy people want to keep hold of all the stocks of a certain commodity in order to push prices up and then become rich quickly or plainly to stay very rich. According to the Financial Times, Armajaro a London based hedge fund, has bought 240 100 tonnes of cacao beans, which is about 88% of available stocks at Liffe-registered warehouses (Source: Financial Times 16/07/10).
It does not require a large brain to realise what will happen soon… our beloved chocolate, food of ancient Kings and loved by All, will become just that: A very expensive commodity.
Who benefits from this? Armajaro, who describe themselves as a ‘progressive and successful commodities and financial services business‘ , claim to have ‘traceability and sustainability programs in Africa, that assist growers to improve their profitability and working conditions’. (Source http://www.armajaro.com 11/08/10)
It is interesting that they seem to provide plenty of support so that growers can ‘enhance the returns they receive for their crop’ (Source http://www.armajaro.com 11/08/10). Does this mean that if Armajaro gives support so that a grower can produce a lot of cacao; and if the market price for cacao will rise as a consequence of Armajaro’s buying most of the stock available, then the beneficiaries would include those who grow the cacao in the first place? Lets wait and see what happens… I don’t know but somehow it seems to me that the champagne will flow in the City of London and not in the Côte d’Ivoire… but maybe I am a cynic.
On the other side of the coin, there is Mr Mark Green, founder of the Grenada Chocolate Company , who started his company with the aim of making ‘high quality Organic dark chocolate in Grenada’ (Source http://www.grenadachocolate.com’).
This company is not concerned with buying large stocks of raw material to sell later on, in fact they have a cooperative of cocoa growing farms on an area of over 150 acres of certified organic land. The produce travels one mile to a small factory and it is there where they make chocolate bars:
As you can see, the solar powered small factory follows old-fashioned methods for producing chocolate, and the workers are local people who get paid a fair fee for their skills.
Somehow it seems to me that the direct beneficiaries are the growers and producers of the product, as well as the customer who is ensured a treat when buying and delecting from one of these bars of equisite delight!
According to the company: ‘The original impetus and principle of our cooperative company is to revolutionize the cocoa-chocolate system that typically keeps cocoa production separate from chocolate-making and therefore takes advantage of cocoa farmers. We believe that the cocoa farmers should benefit as much as the chocolate-makers’. (Source http://www.grenadachocolate.com 11/08/09)
This is the mission behind the company in pictures:
In the end, this seems to be an issue of dependency, the Grenadan producers are more able to control their destinies through their work whilst the people who produce for Armajaro seem to be dependent on market forces that –remains to be seen; might benefit from the future high cost of cocoa beans… lets hope that Armajaro is progressive enough to think of those who grow their crops and that the inflated price of chocolate that we all are most likely to pay in the near future benefits the producers, as it happens for those who work at the Grenada Chocolate Company. If this happens, then the word progressive will be rightly applied to the said hedge fund, if not then there is nothing new under the sun.
An expensive chocolate Easter egg