It’s a news story that you might’ve missed, but on Friday, someone bought all the cocoa. All of it.
At least in Europe anyway: a chocotastic total of 241,000 tonnes of cocoa beans, something which sent er, ripples of chock through the galaxy, in a move that some are already dubbing the ‘credit crunchie’, honest.
There’s something very shady about all of this: someone, in the space of one day, was able to buy up the whole supply of a commodity in an entire continent. Stock-trading like this is nothing unusual in itself: it’s part and parcel of the capitalist economic system, where stock-traders and investors try to make as much money as possible by doing precisely fuck all. It’s pretty clear what the intentions of the mystery trader who bought all up the cocoa is though: to force the price high, monopolise the market, and then, yes, make lots of money. This is what we call “free trade”.
It’s already had the effect of pushing cocoa to its highest price since 1977 – which won’t take long to translate into, brace yourselves… higher chocolate prices for everyone. While a few pence extra on the price of a bar of chocolate is maybe nothing to get your snickers in a twist about, it’s scary the way the price of anything can be manipulated by nothing more than the insider machinations of a few investment bankers and stock traders who’ve never set eyes on a cocoa bean in their life. This is what we call “capitalism”.
What is unusual about this case though is that the buyers have take physical delivery of the cocoa beans – meaning that they’re now sitting in warehouses under the control of the buyers, which again can be used to force the price up by creating an artificial shortage of cocoa!
The only beneficiaries of this are, of course, the parasitical stock traders who now own the stuff. The farmers who actually grow the cocoa – largely in Uganda and the Ivory Coast, are unlikely to see any ‘trickle down’ effect, as they’ve already sold the crop at fixed prices. Prices fixed by middle-men, chocolate companies and these very same investors, you understand. It’s the curly wurly (milky) way of a (cadbury cream egg) twisted economic system.
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Bet it was Terry’s Chocolate Orange Order.
A wee while ago there were food riots in many poor countries, as a result of the price of staple crops such as wheat and maize being driven up by capitalist speculators. Check dis http://liammacuaid.wordpress.com/2010/07/03/commodity-futures-prices-and-hunger/
What’s more likely to have the Scottish working class masking-up and tossing Molotovs? Pensions or delicious chocolate? Watch this space.
Commodity traders and speculators certainly did have a role in the 2007-08 food price crisis, but it is only part of the story. The price hikes were the result of a confluence of different forces, including the collapse of a great deal of third agriculture due to economic restructuring (leading to massive scalebacks in support for small farmers), the expansion of industrial agriculture, the diverting of food crops to be used as biofuels and some crop failures in certain parts of the world. Anyone interested should read Walden Bello’s book Food Wars from last year, it’s excellent.
*third world that should read