Hedge fund develops taste for chocolate assets
It is going to be interesting to watch how is that bet going to be played.
Are the governments around the world going to get involved?
Not that the hedge fund had done something illegal…
From FT
By Jack Farchy in London
A London hedge fund has swept up a large chunk of the world’s stocks of cocoa beans, helping to drive prices of the basic ingredient of chocolate to their highest level in 33 years.
Traders said that Armajaro, which runs several commodities funds, took delivery on Friday of 240,100 tonnes of cocoa, the biggest delivery from London’s Liffe exchange since 1996 and equal to about 7 per cent of annual global production.
Armajaro’s bold bet on higher prices comes as cocoa prices have risen 150 per cent over the past two-and-a-half years, prompting recession-hit chocolate makers to reduce the size of their bars and increase prices.
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Armajaro appears to believe that the market is going to spike significantly higher by September, traditionally the tightest period of the year as chocolatiers ramp up production ahead of Christmas and the main West African crop has not yet come to market.
Although stocks of cocoa exist in warehouses not registered on any exchange, the delivery to Armajaro represents almost all the 270,000 tonnes of available stocks at Liffe-registered warehouses.
