Cocoa production is dominated by the Ivory Coast. About 1/3 of all supply comes from this country. Weather has not been a problem. The issue has been the presidential election. A candidate won but the incumbent president is not willing to give up the office. Countries have recognized the election and the new president, yet the old president will not leave.
A solution is to squeeze cash to invoke a change. The new president has asked cocoa buyers to stop their purchases to help oust the old president. Many traders have agreed to go along with this scheme. The result has been a very significant increase in price. This will not last, but the shock is real and will cause disruption in the supply chain.
You can guess the reaction in some parts of the country. Smuggling is on the rise. A one month halt will not have a severe impact on price , but a continued political battle may send prices off to the races.
A solution is to squeeze cash to invoke a change. The new president has asked cocoa buyers to stop their purchases to help oust the old president. Many traders have agreed to go along with this scheme. The result has been a very significant increase in price. This will not last, but the shock is real and will cause disruption in the supply chain.
You can guess the reaction in some parts of the country. Smuggling is on the rise. A one month halt will not have a severe impact on price , but a continued political battle may send prices off to the races.
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