Cocoa

Duck Won LeeJun Ho Kang

History of the trading of cocoa• Cacao tree Native to the Americas Lives in a limited geographical zone Nearly 70% of the world crop in West Africa

• Where is it produced?• Who produces this product?• Where is it traded? London & New York

• What goods are made from this primary product? Chocolate Hot Chocolate Chocolate powder

Country Amount produced Percentage of world production

Côte d’Ivoire 1.3 million tonnes 37.4%

Ghana 720 thousand tonnes 20.7%

Indonesia 440 thousand tonnes 12.7%

Cameroon 175 thousand tonnes 5.0%

Nigeria 160 thousand tonnes 4.6%

Brazil 155 thousand tonnes 4.5%

Ecuador 118 thousand tonnes 3.4%

Dominican Republic

47 thousand tonnes 1.4%

Malaysia 30 thousand tonnes 0.9%

Product pricing• Price range:Started with $600 per ton in 1970Over $3000 per ton in 2008 July

Cocoa price in 1970

Cocoa price in 2008

Fluctuations in price

World prices and production of cocoa (from 1971/72 to 2005/06)

Conditions responsible for price change• Political instability• Bad weather• Development in technology Fertilizer, spray machines

• Major increase in population Better living standard Good healthIncrease in labor days

• Education• Influence from other countries

I want to be an educated cocoa producer! Tell me

all you know about cocoa!

Well then, my friend, remember this simple equation. Cocoa = your life.

Once you fully understand this extremely confusing theory, you’ll be able to take extra care for your cacao

beans!

Case study: “Cocoa price hits 14-year high”• 2002 March, 11• Reported by BBC News• Cocoa price rose nearly

70% since 2001 Sep.• Main cause: Political instability Bad weather

• Related products affected

Industry Groups/Trade Agreements

• Industry GroupsWCF (World Cocoa Foundation)Nestle

• Trade AgreementsCocoa Protocol

Existence of speculators?• Speculators:People who buy certain goods expecting a rise in price and sell when the price increases, butmostly do not have interest in consuming

• Especially active in food markets

• London (2008 Feb, 04): Reported by AFX News Limited

Cocoa price increased by 24%

WRRRRRRRRRRRRRY

(Sinister laughter)

Websites used• "About the World Cocoa Foundation." World Cocoa Foundation. World Cocoa

Foundation. 3 Nov. 2008 <http://www.worldcocoafoundation.org/default.asp>.• Cleveland, Cutler J., ed. "Environmental change and socioeconomic factors in

Africa." The Encyclopedia of Earth. 26 Aug. 2008. 3 Nov. 2008 <http://www.eoearth.org/article/environmental_change_and_socioeconomic_factors_in_africa>.

• "Cocoa price hits 14-year-high." BBC News. 11 Mar. 2002.3 Nov. 2008 <http://news.bbc.co.uk/2/hi/business/1866978.stm>.

• "Cocoa Protocol." Wikipedia. 26 Oct. 2008. Wikimedia foundation. 31 Oct. 2008 <http://en.wikipedia.org/wiki/cocoa_protocol>.

• "Cocoa." Wikipedia. Oct.-Nov. 2008. Wikimedia Foundation. Oct.-Nov. 2008 <http://en.wikipedia.org/wiki/cocoa>.

• Ellis, Jamie. "International Effect on Cocoa Prices." Whiskey & Gunpowder. 11 Feb. 2008. 3 Nov. 2008 <http://www.whiskeyandgunpowder.com/archives/2008/20080211.html>.

• "International Cocoa Initiative." Wikipedia. 28 Feb. 2008. Wikimedia foundation. 31 Oct. 2008 <http://en.wikipedia.org/wiki/international_cocoa_initiative>.

• "Softs - Speculator buying sends coffee, cocoa, to fresh multi-year highs." Forbes. 04 Feb. 2008.3 Nov. 2008 <http://www.forbes.com/feeds/afx/2008/02/04/afx4610878.html>.