Be aware that chocolate inflation is about to hit home.

Speculation is now so rife that a group of European cocoa trading companies have taken the rare step of making public a complaint about the extent of the speculation on the London cocoa market and demanding tighter regulations. In a letter, leading cocoa industry figures claim there is clear “manipulation… which is bringing the London market into disrepute”. They accuse the market of lacking “transparency and control”. They warn that unless action is taken to stop “big players from cornering the market” they will quit London. Fair-trade activists and anti-poverty pressure groups are calling for government action to curb financial speculators from inflating food prices. They warn that unless urgent moves are taken to clamp down on the hedge funds and other financial groups behind the speculation there could be shortages, death through starvation and outbreaks of civil unrest in poorer countries.

Barbara Crowther, of the Fairtrade foundation said: “Fairtrade’s experience is that people are willing to pay a little more for chocolate, if this supports cocoa farmers in poor countries to improve their own standard of living. But consumers would be very angry if this is simply helping rich and powerful financial speculators to line their own pockets.” Julian Oram, Head of Policy & Campaigns at the World Development Movement, said: “It has profound consequences for the world’s poorest people by pushing up the price of basic foods like wheat and corn. Governments really need crack down on the banks and hedge funds that are gambling on what is a basic human need.” He warned that market instability affects farmers in developing countries, particularly in West Africa, the dominant cocoa-growing area by making it harder to plan.

via Arbroath