Dec. 18, 2014, 7:02 AM
- Olam's $1.3B deal to buy rival Archer Daniels Midland's cocoa processing business may reduce liquidity in the cocoa bean trade, raising concerns about volatile prices and a potential shake-up of customer relationships.
- Olam buys around 500K tonnes of cocoa annually, and it said it will increase its processing capacity to more than 700K tonnes, or 16% of world supply, with this deal.
- This could force users supplied by Olam to look elsewhere for many of their beans, putting a strain on prices.
- Related stocks: MDLZ, HSY, OTCPK:NSRGY, OTC:BYCBF
- ETFs: NIB, CHOC
- Previously: ADM to sell global cocoa business to Olam International for $1.3B (Dec. 15 2014)
Oct. 16, 2014, 6:47 AM
- Nestle (OTCPK:NSRGY, OTCPK:NSRGF) says it's on "high alert" over the potential impact of the Ebola disease in West Africa.
- The company sources a good portion of its cocoa from Ivory Coast which is on a World Health Organization Ebola watch list.
- Cocoa future are up 16.6% over the last month.
- Shares of Nestle fell in Zurich trading after the company reported a drop in 2014 9-month sales.
- Related ETF: NIB, CHOC.
Sep. 19, 2014, 8:59 AM| Comment!
Jun. 20, 2014, 6:06 AM
- With the growing demand of chocolate across Asia, and new processing facilities in India and China, cocoa prices have shot through the roof. In the last five years, demand for the beans rose in Asia by 29%, although European demand fell by 1% for the same period.
- ICE September cocoa rose 3.2% to $3,128 a tonne yesterday, its highest level since 2011. The price on cocoa beans has soared by over 40% over the past year, with cocoa butter rising more than 70%.
- ETFs: NIB, CHOC
Apr. 29, 2014, 7:15 PM
- U.S. government forecasters predict a more than 65% chance for an El Niño weather phenomenon by the end of the year, a development that threatens to drive up prices for food and other staples.
- El Niño has a reputation for triggering sharp run-ups for prices in markets as diverse as nickel, coffee and soybeans, and commodities investors, traders and analysts are bracing for impact at a time when global supplies of many raw materials already are stretched.
- Global food prices - which at the start of 2014 were expected to be largely flat this year - could easily climb 15% to record highs in as a little as three months after an El Niño occurs, says World Bank economist James Baffes.
- But Société Générale analysts say it is miners, not farmers, who have the most to worry about; since 1991, nickel prices rose the most (13.9%) during El Niño years among commodities the bank tracks.
- ETFs: DBA, CORN, DBC, JO, JJC, RJA, JJG, WEAT, SOYB, DJP, SGG, DBB, COW, NIB, GSG, RJI, CAFE, BAL, GCC, DAG, USCI, JJA, GRU, CHOC, CANE, JJN, RGRA, AGA, JJT, RGRC, CPER, AGF, GSP, BOM, RJZ, JJU, GSC, LSC, FUD, DJCI, USAG, BOS, SGAR, JJM, DEE, BDD, UCI, LD, WEET, UAG, DYY, DIRT, BCM, CMD, DDP, NINI, JJS, CTNN, TAGS, UBC, CUPM, FOIL, UCD, ADZ, RGRI, LEDD, UBM, CMDT, BDG, SBV, USMI, DPU, LSTK, CSCB, GRWN, HEVY, CSCR
Feb. 14, 2014, 7:55 AM
- Cocoa prices continue to march higher as demand in emerging markets starts to strain global capacity.
- A new forecast from the International Cocoa Organization on production suggest prices could be elevated for years.
- Chocolate sellers will pass on some of their commodity costs to consumers, but face a tough pricing environment in many regions.
- What to watch: Companies can use substitutes for cocoa butter, but in many cases will have to relabel products and face the risk of tarnishing their brands.
- Chart: Cocoa futures
- Related stocks: MDLZ, HSY, NSRGY, ADM, BYCBF
- Related ETFs; NIB
Oct. 8, 2013, 7:24 AM
- Cocoa prices set a 23-month high on production worries as an extended rally in the market shows little signs of ending.
- Macquarie estimates cocoa production will fall 173K metric tons below the level of consumption for the new season which just began this month. Heavy rains in Ghana and Ivory Coast are partially to blame.
- Related stocks: MDLZ, HSY, NSRGY.PK, ADM, BYCBF.PK
- Related ETFs: NIB
Oct. 2, 2013, 3:11 AM
- Archer Daniels Midland (ADM) is reportedly close to selling its cocoa business to Cargill in a deal that could be worth up to $2B.
- The divestiture would further strengthen ADM's shift towards the grains industry as it completes its $3B acquisition of GrainCorp. The transaction would also reduce ADM's exposure to the lower profitability that's affecting the cocoa sector.
- The deal would create a global price-setting giant to rival Zurich-based Barry Callebaut (BYCBF.PK), the world's biggest producer of industrial chocolate products. Cargill and Barry Callebaut would account for over 50% of world capacity.
- Food producers that could be affected include MDLZ, HSY, RMCF, KRFT, NSRGY.PK.
- ETF: NIB
Sep. 27, 2013, 7:54 AM| 1 Comment
Dec. 9, 2011, 3:46 PMThere's always a bear market somewhere. Cocoa prices plunge again, continuing a 9 month skid that's the worst run for the commodity in 50 years. At $2,067/ton, the price is 45% below the March peak when unrest in Ivory Coast got bad enough French troops had to be sent in. Buy (or in this case sell) on the cannons, they say. NIB -2.7%. | Comment!
Dec. 6, 2011, 9:30 AMThe price of cocoa continues to fall back as chocolate manufacturers see demand in Europe wane with all the financial unrest. After hitting a 33-year high last year due to a supply disruption from political unrest in the Ivory Coast, prices have now retreated back 42% and look set to stay low with forecasts projecting that supplies will outpace demand for the next season. Cocoa futures -1.2%. | Comment!
Apr. 11, 2011, 9:14 AM
Apr. 4, 2011, 2:11 PM
Mar. 4, 2011, 8:59 AM
Feb. 22, 2011, 11:21 AM
Feb. 17, 2011, 12:47 PM
NIB vs. ETF Alternatives
The Dow Jones-UBS Cocoa Subindex Total ReturnSM is a sub-index of the Dow Jones-UBS Commodity Index Total ReturnSM and is intended to reflect the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills. The Dow Jones-UBS Cocoa Subindex Total ReturnSM is a single-commodity sub-index currently consisting of one futures contract on the commodity of cocoa, which is included in the Dow Jones-UBS Commodity Index Total ReturnSM.
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