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A bittersweet moment for the cocoa market

Christopher Werth Jan 23, 2012

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.

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