Cocoa Trade Shakes Up London Market
The London cocoa market has been shaken up by the biggest cocoa trade since the days of the infamous “Chocfinger”. The trade, which was executed on July 7th, 2023, involved a large amount of cocoa beans being sold from one company to another. The trade was so large that it caused a ripple effect throughout the market, with prices rising and falling as a result.
Background of the Trade
The trade was initiated by a company called Cargill, which is one of the world’s largest agricultural commodity traders. Cargill had purchased a large amount of cocoa beans from a producer in West Africa. The beans were then sold to a company called Olam International, which is a Singapore-based commodities trader. Olam then sold the beans to a company called Barry Callebaut, which is a Swiss-based chocolate manufacturer.
Impact of the Trade
The trade had a significant impact on the London cocoa market. Prices for cocoa beans rose sharply as a result of the trade, with some traders reporting that prices had increased by as much as 10%. This was due to the fact that the trade had removed a large amount of cocoa beans from the market, which had caused a shortage.
The trade also had an impact on the futures market, with prices for cocoa futures contracts rising as a result of the trade. This was due to the fact that traders were now expecting higher prices for cocoa beans in the future, as a result of the shortage caused by the trade.
Reaction of the Market
The reaction to the trade was mixed. Some traders welcomed the trade, as it had caused prices to rise and had created an opportunity for them to make a profit. However, other traders were concerned about the impact that the trade could have on the market in the long term. They argued that the trade could lead to a shortage of cocoa beans in the future, which could lead to higher prices and could cause problems for the industry.
The Chocfinger Effect
The trade has been compared to the infamous “Chocfinger” trade, which took place in the early 2000s. In that trade, a trader named Anthony Ward purchased a large amount of cocoa beans, which caused prices to spike. The trade was seen as a major factor in the cocoa market crash of 2002, which caused prices to plummet.
Outlook for the Market
It remains to be seen what the long-term impact of the trade will be. Some traders are optimistic that the trade will lead to higher prices in the future, as the shortage of cocoa beans will cause prices to rise. However, others are concerned that the trade could lead to a market crash, as it did in 2002.
Only time will tell what the impact of the trade will be. In the meantime, traders will be keeping a close eye on the market to see how it reacts to the trade. It is clear that the trade has had a significant impact on the London cocoa market, and it will be interesting to see how the market evolves in the coming months and years.