The Chocolate Crisis

Written by Cliff on Tuesday 21 January 2014 at 3:16 pm

Attention in Hong Kong remains focused on full universal suffrage. But a far more important issue confronts Hong Kong while the chief executive and party leaders dither: rising chocolate prices. When will the government address this terrifying crisis?

Chocolate comes from cocoa trees, which have been cultivated for thousands of years. The Europeans also deserve credit for adding sugar and milk. And then America’s Milton Hershey did what Americans always do so well: created a mass market with cheap chocolate bars. Chocolate Hershey products are ubiquitous today.

How would we live without chocolate? Yes, there are a few malcontents and deviants who claim not to like chocolate. Aliens, perhaps, from another planet. Or people just deficient in what ultimately makes us human. But that’s fine since it leaves more for the rest of us.

Now the gift from the gods is threatened. The cost of one kilogram of chocolate surpassed $12.25, up 45% in 2007, the highest ever. Explained the Wall Street Journal: “Prices are on the rise due to a shortage of cocoa beans, which are roasted and ground to make chocolate. Market experts estimate that supplies will fall short of demand this year for the first time since 2010 and dry weather is expected to hurt the next harvest in West Africa, where 70% of cocoa beans are produced.” Rabobank predicts a third consecutive cocoa deficit for the 2014/15 crop year that will see prices soar 23% from Q3 2013 levels to $3,000 per (MT) by Q3 2014.

Even a weak recovery has sparked a consumer return to the chocolate market, with consumption rising for the first time since the economic and financial crashes of 2008. Jonathan Parkman of the London commodities brokerage Marex Spectron, said sales reveal “a better-than-expected recovery in core markets such as North America and Northern Europe.”

The problem is worldwide. In Europe the cost of cocoa butter is up 70% from the end of last year. The expense of making a milk chocolate bar is up 31%. The same phenomenon is evident in Asia. “In the regions like Asia-Pacific or Latin America, we are seeing more middle class consumers buying chocolates compared with five or six years ago because they have the money to do it,” observed Francisco Redruello of Euromonitor International. In Asia chocolate prices are up 30 to 40% this year. “Most of our customers are not happy about it” said Richard Lee of Singapore-based Aalst Chocolate.

Not everyone is certain that rapid price increases will continue. Shawn Hackett of Hackett Financial Advisors complained that the current futures market reflects a “feeding frenzy” and speculators are “getting carried away.” One can only hope that he’s right. Otherwise the future of mankind will be in doubt.

The only downside in all of this is that demand is increasing fastest for dark chocolate. Chocolate manufacturers are expanding their line-ups of dark chocolate products. Admittedly darker is lower in calories and better in health. But it just doesn’t have the wonderful smooth, creamy taste of milk chocolate. It is sad to see scarce chocolate products being diverted to inferior uses.

This is a crisis. A real crisis. No nonsense about world peace, international poverty, income inequality, environmental degradation, runaway inflation, overwhelming debt, or other minor problems. Chocolate is going to cost more!

This will be bad enough for casual consumers, denying them access to the elixir of life, the nectar of the gods. It is far worse for chocolate addicts, otherwise known as chocoholics. After all, we can’t help ourselves. We are controlled by larger forces. We are helpless in the face of the taste of chocolate.

Blogger Kimi Harris offered some self-help advice, if one wants to call it that, but it included such strange ideas as “eat better chocolate, less often.” After all, “the better quality, the less you need.” Anyone who would say such things does not understand the miracle of chocolate—and certainly is not a chocoholic. Eat less? The better the chocolate, the more one wants to eat! You can never have enough chocolate. There is no such thing as too much chocolate.

It’s time for the government to act. After all, for what do we have the government if not to act in a crisis like this? Vital interests are at stake.
First, we need a Department of Chocolate. Not just an agency or bureau. A full ministerial-level department answerable to the CE.

Second, we need to create a new welfare program to ensure that everyone has access to chocolate. Social welfare isn’t enough. Hong Kong people need a guaranteed ration of chocolate, irrespective of financial need.

Third, we need price controls on chocolate, to compliment the upcoming competition law. After all, why should greedy profiteers be able to take advantage of helpless chocoholics? We have a RIGHT to reasonably-priced chocolate. Who cares about economics when it comes to something as important as chocolate?

Then we need to lobby China to exercise military prowess – we need a China-backed military policy based on guaranteed access to cocoa. The vast majority of cocoa is produced in West Africa; 43% comes from Ivory Coast alone. Forget access to African gas and Australian mines. Energy is an international market. Moreover, new alternatives are coming online all of the time. In recent years solar an nuclear have become viable alternatives.

However, we remain hopelessly dependent on foreign sources of cocoa. Indeed, there is no production in China at all. How did we allow ourselves to become so vulnerable to international cocoa disruptions and interruptions? Chocolate is far more important than oil!

We need a new chocolate “czar” to coordinate a truly effective cross-border chocolate policy. Hong Kong, no, China needs to simultaneously hold down excessive chocolate prices, ensure fair and adequate access to chocolate, guarantee the nation’s access to foreign sources of this vital good, and ultimately develop a domestic industry. Only strong multi-agency effort can deliver chocolate independence!

Indeed, the neoconservatives have long suggested that Hong Kong concoct some new grand crusade as a means of promoting foreign direct investment. How about guaranteed chocolate for all? A world-beating HK chocolate industry? Promoting a new advanced chocolate civilization? These would reflect greatness redefined!

Hong Kong’s political leaders are being laughed at around the world. But for all the wrong reasons. They bicker. They won’t cooperate. They won’t be constructive. They try to implode the property market. They are irresponsible. They represent special interests rather than the public interest. They are extraordinary morons.

All true.

But their worst political crime is failing to deal with the looming chocolate crisis. If they fail to act, future generations will never forgive them.

~ ~ ~

Leave a comment

Comments »

No comments yet.

RSS feed for comments on this post | TrackBack URI

Powered by Wordpress - Triplets Identification Band by Neuro - Adapted for use by ViperFusion,