The meltdown in the cocoa price
Fears over a shortfall of cocoa now look to have been overdone as the price plummets.
The cocoa price has fallen 14% over the past two months, following a spike in September caused by the Ebola outbreak in west Africa. The region grows around 70% of the world's cocoa, and the spread of the disease had raised fears of supply shortages.
But those worries now look unfounded. Fears over Ebola are receding. Demand is soft, especially in Europe. And harvests have been healthy: the International Cocoa Organisation says that the global surplus in 2013/2014 was 53,000 tonnes.
Cocoa is still up 10% year-on-year, but the trend seems to be down, says J Ganes Consulting, a soft commodities specialist. "High prices and shaky economics are not a winning combination for the cocoa market and this is taking the wind out of the bull sails."
Longer term, however, it could be a different story. Cocoa in west Africa is grown by small farms, who are struggling to keep up with demand growth from the $110bn global confectionery industry, according to equity research firm Hardman & Co.
"This combination of fragile upstream production with rapidly growing demand for chocolate confectionery in countries such as India, China and Russia, has raised the spectre of future chronic supply shortfalls of cocoa beans."