A bittersweet moment for the cocoa market
A partial view taken on November 23, 2011 in Paris shows chocolate and sweets displayed at the Mere de famille chocolate shop.
Adriene Hill: Now to one of the sweetest news stories of the day -- or maybe bittersweet, or semi-sweet. Chocolate -- the price of cocoa has started to fall.
From London, Christopher Werth explains why.
Christopher Werth: Carsten Fritsch is a commodities analyst for Commerzbank. He watches the cocoa markets closely --- and he enjoys his work.
Carsten Fritsch: Yes, I like eating chocolate.
But lately, fewer chocolate lovers are buying sweets. And there's a very simple reason for that: demand for cocoa -- the main ingredient in chocolate -- has dropped across the world, as the global downturn drags on.
And Fritsch says, with less demand, the price of cocoa has plunged.
Fritsch: So that's a visible effect of the economic crisis on cocoa demand, but I think that the main driver is the supply situation.
That is, the supply of cocoa that's grown around the world. Growers had expected a surplus of cocoa this year. But dry, dusty winds out of the Sahara now threaten crops in West Africa, the world's largest region for production -- a scenario that could send cocoa prices right back up again, and keep chocolate lovers away too.
In London, I'm Christopher Werth for Marketplace.