Demand and supply in action – Will there be a chocolate drought?

Political unrest in the Ivory Coast, where 40% of the world’s cocoa beans are grown, has reduced the number of certified free trade cocoa farmers as they flee their farms because of the dangers in rural areas. See article.

“The situation is already affecting chocolate manufacturers, who are facing the highest cocoa prices for over 30 years. Prices jumped by 10 per cent this month alone.”

I blogged yesterday about factors other than PINTSWC affecting the price of cotton, and this is another example where, in this case political instability disrupts the work of cocoa farmers, shifting the supply curve to the left, raising its price and therefore the price chocolate.