Armajaro Cocoa Investments Driving Up Already-Rising Chocolate Prices

Financial Times:

A London hedge fund has swept up a large chunk of the world's stocks of cocoa beans, helping to drive prices of the basic ingredient of chocolate to their highest level in 33 years.

Traders said that Armajaro, which runs several commodities funds, took delivery on Friday of 240,100 tonnes of cocoa, the biggest delivery from London's Liffe exchange since 1996 and equal to about 7 per cent of annual global production.

Armajaro's bold bet on higher prices comes as cocoa prices have risen 150 per cent over the past two-and-a-half years, prompting recession-hit chocolate makers to reduce the size of their bars and increase prices.

Read the whole story: Financial Times

Comments

[themodernleader]

08:17 PM on 07/21/2010

Cornering the market on oil, grain, cocoa, orange juice, gold, silver, copper, and other rare commodities is new on the world stage. but cornering the market to become wealthy is old indeed. The great leader Wu Ti (140-87 B.C).established national ownership of natural resources to prevent market manipulation. The production of salt and iron and the manufacturer of alcoholic drinks became state monopolies. All business incomes were taxed at 5 percent. Great public works were undertaken to provide employment for millions.
There is nothing new under the sun. What is new is how leaders provide the capability and wisdom towards a direction of growth or decay.

[themodernleader]

07:42 PM on 07/21/2010

The deregulation of commodities was the death knell for the middle class of the Western World. The Chinese government is following the Robber Barons' example and cornering the market on precious metals and energy, especially oil and gas, for the Chinese people. In the more advanced Western World, the market manipulation of commodities benefits oligarchy. The people are fleeced or do with out. While the Chinese people develop confidence and competence, the people of the Weatern World learn the intricacies of printing money to make money. Guess whio is rising and who is declining.

[FredDerf]

03:06 PM on 07/18/2010

Now I'm mad as hell and can't take it anymore!

[davidwayneosedach]

12:23 PM on 07/18/2010

No more Belgian chocolate for me. I'm switching to Stella Artois: Belgian beer.

[politicscorner]

09:16 AM on 07/18/2010

Ban hedge funds. They are responsible for creating artificially high prices on many commodities that have nothing to do with supply and demand. They are the bubble makers. The rich investors make out like bandits. And everyone else is left paying for their largesse.

Hedge funds lead the extreme capitalists who are ruining the world economy for their short-term profit. They are bad for humanity.

[2garen]

10:04 AM on 07/18/2010

I so agree with you.

[msjimmied]

11:39 PM on 07/17/2010

So, it's just cocoa now? Remember when they were playing with oil and the average price was over $3 for regular? Tjat hue and cry was "Peak Oil". How about when the jacking up of food grains? Do we know how many millions had to do without while they lined their pockets?

I have no problem with commerce. However, when they create the climate to gouge the population with a "shortage" type emergency pricing, we should prosecute them like we do with profiteers when a disaster hits, especially when the disaster is of their making. Granted, chocolate is not an essential, but we have let so many instances of essentials being jacked.

I am tired of this lauding of commercialism. People are more important.;

[bigal0310]

09:57 PM on 07/17/2010

that's a lot of cocoa...crazy to think that one fund could swing market prices that much.

http://wallstblogger.blogspot.com

[littlepuffycloud]

05:43 PM on 07/17/2010

Does anyone here remember when Snickers, Hershey Bars and most other candy bars were made in two sizes...a nickel or a dime sizes. A nickel for a candy bar probably bigger than the 99 cent ones we now buy. Life savers were a nickel..my grandfather would always bring us kids life savers. This was back in the mid-60's when I was 10 yrs old..and no I didn't walk to school 5 miles uphill both ways in the snow barefoot without a jacket. But it was a long time ago.

[Bugweed]

04:50 PM on 07/17/2010

Stupid sheep. Like a candy bar is a matter of life and death.

[littlepuffycloud]

05:44 PM on 07/17/2010

I didn't read any posts that said a candy bar is a matter of life and death.

[Kevin Atlanta]

01:49 PM on 07/17/2010

One more graphic example of why these markets must be regulated heavily. When they served a real purpose of protecting the family farm or small business from economic ruin they were an important factor in economic growth. The Corporate Fascist sociopaths have now driven famine and death with their greed in speculation on rice, corn and spiked fuel prices.
These weapons of mass financial destruction are deserving of being banned.

[MickleVonTickle]

04:52 PM on 07/17/2010

You believe commodities futures are "weapons of mass financial destruction" ?

[Kevin Atlanta]

12:45 AM on 07/18/2010

http://www.youtube.com/watch?v=18Dj8GyN4VM

Mass financial destruction, famine and crises based on pure speculation.

[menlopian]

10:10 PM on 07/17/2010

corporate fascist sociopath? famine, death, greed....wow that's some fancy language. always helps to know what you are talking about. if this hedge fund is wrong, then it will come at great ruin to them because price will collapse. If not, then price would have risen anyway. the same is true of every other commodity market. get a clue.

[Kevin Atlanta]

12:44 AM on 07/18/2010

http://www.youtube.com/watch?v=18Dj8GyN4VM

The Silent Tsunami - Hege Funds and commodity traders speculations created this famine.

Get a clue.

[mikey09]

12:26 PM on 07/17/2010

Great, can't even have a guilty pleasure anymore, well at least one I can afford

[RhiannonRings]

10:55 AM on 07/17/2010

Ha! I read the headline as "blame the Hedge Fudge."

[marylandtravelinman]

11:52 AM on 07/18/2010

Because of the rich people exploitation, that might be the only fudge we can afford, fudge made out of hedges. :)

[guveqzero]

10:49 AM on 07/17/2010

Our financial system is a failure. Speculation by hedge funds can make the price anything they want. Take silver for example, JPMorgan wants it low so they sell more silver than exists. What a sham. The casino doors are still open. Those with the largest amount of money can do anything in the casino.

[HekmagaJuximakLives]

09:07 AM on 07/17/2010

This behavior may have worked in the 20th century, but not now. It is fraud, and it must be stopped by any means necessary.

[plan-uts]

12:15 PM on 07/17/2010

How is it fraud to go on the open market, buy a contract, then take delivery of that product? If their data tells them that production is falling and demand is not, then stocking up on an item is nothing more than good economic sense. If their data is wrong they will suffer loses, if it is correct they will make profits. Please tell me where is the fraud?

[turkeywrld]

02:17 PM on 07/17/2010

A fraud is a fraud is a fraud ..you can paint it white and call it 'free market trading' or any fancy name ..and in a world where deception and phonyism is king it will wash for while ..maybe decades.. Wall st is a giant gambling institution ..period..at the core its gambling with the livelyhood of producers of goods for who'm 'free market forces' are life or death ..dependant on those pulling the 'free market' strings ...its the epitome of 'Mis placed' power...Wal st is the major player in running our Gov't next to the military .....

small, independant, localised economies are the cure ... unfortunately VERY slow to build ...and even harder to sell since it takes conscious participation.hard work (ie self responsibility and true morals) ... the 'chicago school' economic model that our leaders embrace demands a crisis in order to foment change.....apparently we havn't reached enough of a crisis ..SO FAR...

[VegasWolf]

12:45 PM on 07/18/2010

Clearly, as you say, it is not fraud per se.

My thought is this though, given a "hypothetical" economy where a tiny percentage of people control the vast amount of money in supply, then what is to stop these people from employing the rocket boys to utilize the leverage of derivatives combined with the disproportionate wealth of the backers to manipulate the commodities market thus controlling the end level prices of raw materials, foods, cottons, oil, wheat, etc.

Would this not be a means for the super-wealthy to not only make themselves even wealthier, but also a new means to control the masses?

At least, during the French Revolution, the peasants could afford cake.

[MickleVonTickle]

04:54 PM on 07/17/2010

Making a contract for a good to be delivered a future date is not a 20th century concept.

And, how are you defining fraud? What was the fraudulent activity?

[kimleehan]

08:28 AM on 07/17/2010

I just tried the new machine at the gym and OMG I got so sick from eating all those candy bars.