Executive Briefings

Ebola Outbreak Could Disrupt Supply of Cocoa, Cause Prices to Rise

Hedge funds are betting that the price of cocoa will rise on concern that the deadly Ebola disease will disrupt supplies from West Africa, which produces 70 percent of the global supply.

Money managers raised their cocoa investments by the highest amount in 16 weeks. As governments and international organizations struggle to contain Ebola, concerns are mounting that the outbreak could spread from nations, including Liberia and Guinea, to neighboring Ivory Coast, the top cocoa producer.

Prices are heading for a sixth straight monthly gain, the longest streak in 12 years. Increasing consumption of chocolate in Asia is eroding world inventories as a percentage of demand to the lowest since 2010, the International Cocoa Organization estimates.

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Money managers raised their cocoa investments by the highest amount in 16 weeks. As governments and international organizations struggle to contain Ebola, concerns are mounting that the outbreak could spread from nations, including Liberia and Guinea, to neighboring Ivory Coast, the top cocoa producer.

Prices are heading for a sixth straight monthly gain, the longest streak in 12 years. Increasing consumption of chocolate in Asia is eroding world inventories as a percentage of demand to the lowest since 2010, the International Cocoa Organization estimates.

Read Full Article