Via The Wall Street Journal: Cocoa Surges on Ebola Fears. Excerpt:
The deadly Ebola virus spreading through West Africa is sparking fears in the market that supplies of cocoa, one of the region's top exports, could be disrupted.
Prices for the key chocolate ingredient have surged 6.3% this week, settling just shy of the highest level in more than three years on mounting concerns that the outbreak will reach the Ivory Coast or Ghana, which produce about 60% of the world's cocoa. No cases have been reported in either country. But Ivory Coast shares a poorly policed border with Liberia and Guinea, two of the countries hardest hit by Ebola.
Even a small number of Ebola cases in Ivory Coast could have a sweeping impact in the cocoa market, analysts say. Cocoa is grown on tiny plots, with growers selling their beans to middlemen who ride from farm to farm on motorbikes gathering the crop to transport to the coast for export. The travel restrictions and quarantines used to contain the disease could quickly isolate millions of farmers, choking off supplies to the world's chocolate makers.
"The fear people have is that once Ebola is verified in Ivory Coast ... it will be pandemonium," said Hector Galvan, senior market strategist at RJO Futures in Chicago. "The worst case scenario—you lose virtually all cocoa exports out of Ivory Coast [or] Ghana for an unknown period of time."
The last time exports were halted out of Ivory Coast, during a period of postelection civil war in late 2010 and early 2011, cocoa futures spiked to 32-year highs. Any interruption to cocoa exports would be devastating for Ivory Coast, which is heavily reliant on the income generated from agriculture.
A disruption would also quickly radiate through the global market, where record demand for chocolate is squeezing supply. Cocoa futures are up 20% this year and hit a three-year high last month.