Chocolate prices have been on the rise since Easter. If you're wondering why, blame it on the hedge funds.
The Financial Times reports that a London hedge fund, Armajaro, has just cornered the market in cocoa beans, buying up a massive chunk of it . Cocoa is the basic ingredient of chocolate and the hedge fund's activities have forced the price of chocolate up to its highest level in 33 years. Cocoa prices have risen 150% over the last two years. As a result, Armajaro has bought into it and expects to make massive profits from the deal.
The Wall Street Journal reports that cocoa traders have bought $1 billion worth of cocoa so the prices are expected to continue heading north.
This is a problem. Not so much because of the price of chocolate but because it means a handful of traders can manipulate prices. We need stricter rules on how many contracts traders can hold.
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