SOURCE OF PHOTO–Hindubusinessline.com
Political Unrest in Ivory Coast; a common theme
Political Unrest in West Africa and the Disparity Of Wealth
Political unrest in the Ivory Coast is nothing new and this can often affect the cocoa market. For many west Africa residents, playing soccer and harvesting cocoa has been a staple of their life style and history for close to a century. Wages for many cocoa farmers are less than the equivalent of $200 a month! Absolutely ridiculous when you consider Donald Trump’s political cronies (up for various cabinet seats) have a net worth of more than $100 billion. Talk about the disparity of wealth?
he world’s 10 biggest corporations together had revenue greater than that of the poorest 180 countries combined in 2015-16, says a new report by Oxfam, released to coincide with the World Economic Forum that opened in Davos on Monday.
Holding out a warning that, if left unchecked, growing inequalities threaten to pull our societies apart, the report called upon world leaders to focus on a ‘”human economy” that “works for the 99 per cent”.
The report, “An Economy for the 99%”, said inequalities were leading to increase in crime and insecurity, and giving rise to widespread disillusionment with mainstream politics, in the process helping forces that fan racism and divisiveness, citing Brexit and Donald Trump’s campaign as examples.
Eight men now own the same amount of wealth as the poorest half of the world. This includes the poor country of Ivory Coast, whose migrant cocoa workers, work their tails off to bring us one of the “sweetest, most euphoric” foods on earth–Chocolate
West African Weather and Crops—-Huge Impact to the Cocoa Market
Few people realize that all the wonderful chocolate you happen to eat, probably comes from the Ivory Coast, Ghana or Nigeria, which produces 70% of the world’s cocoa.
With respect to commodities, this has been one of our best calls over the last 2 years. We first predicted the volatile, but slow increase rise in cocoa prices back during the El Nino of 2015-16, in which crop conditions tanked a year or so ago in Ghana and Ivory Coast. More recently last spring in the midst of worries about the mid-crop coming onto the market, we had a “bearish attitude” on our expectations of improved global weather heading into 2017.
You can see, for example, how much better crop conditions have been recently compared to a year ago. This reality of a possible surplus in global cocoa production this year, exacerbated by weaker North American cocoa grinds and worries over the state of the European Economy (biggest consumer of cocoa), has resulted in close to a 30% collapse in cocoa prices since late summer.
Notice the much improved crop conditions in west Africa this winter. This is something we predicted 6 months ago would happen that has been a main force in the fall of the cocoa market. The question then becomes, how much lower must prices go to foster an increase in global demand to stabilize prices?
What will prices do in the months ahead? Subscribers to our Climatelligence newsletter (available for subscription sometime later this year), will receive some longer term trading advice in this and other weather sensitive commodity options and ETF’s
SOURCE:—- NOAA Start Center for Satellite Applications and Research
