Cornering the Chocolate Market
Labeled "Chocfinger" and "Willy Wonka" in the media, British investor Anthony Ward has emerged over the last decade as the undisputed king of the global chocolate market. In 2002, Ward purchased more than 150,000 tons of cocoa, or around 5 percent of global production. He did it again in the summer of 2010, buying upwards of 240,000 tons -- enough to make about 5 billion chocolate bars -- to give him control of about 7 percent of global production. It was the largest delivery of cocoa on the London exchange in at least a decade, and Ward became the go-to source for chocolate manufacturers looking for beans. Other investors cried foul, claiming that Ward was driving up prices on a commodity that had already increased in value by more than 150 percent over the previous two and a half years.
Ward isn't just a mad chocolate fiend; he has also made a long-term bet that supply problems in West Africa will continue to push prices up. The demand for cocoa has risen about 3 percent annually over the last century and has spiked sharply during this year's political turmoil in Ivory Coast, which grows about 40 percent of the world's crop. It also turns out that demand for chocolate is countercyclical: Hershey's profits jumped 40 percent in 2009 during the global financial crisis.
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