2,600 delegates to the Annual General Meeting (AGM) of Kuapa Kokoo elected Christina Ohene Agyare as new president of the cocoa farmers’ cooperative in Ghana. Ms Agyare is fifty-one and owns an eleven acre cocoa farm in the the Kwabeng Society in the Atiwa District, Eastern Region of the country. She is one of five women elected to the national executive of the cooperative at the AGM. She succeeds PCK Buah and her terms runs until 2014. Previously, she served as treasurer and recorder of her local society.
Ms. Agyare takes over a cooperative of 45,000 farmers that has produced and delivered 28,000 tons of cocoa. The cooperative also owns 45 percent of the fairtrade chocolate maker Divine Chocolate in the UK. For more information, check the story are Divine’s website.
Sophie Tranchell, Managing Director of Divine Chocolate said in a press release: “Ayekoo! We congratulate Christiana on her election as the first woman President of Kuapa Kokoo Farmers’ Union and very much look forward to working closely with her in growing Divine, Kuapa’s chocolate company. We would also like to thank Mr. Buah and the outgoing members of the NEC who have worked diligently for last 4 years, listening to the membership, introducing a new constitution and leading Kuapa through a challenging period., and for Mr Buah’s welcome influence on Divine business.”
Anthony Ward, founder and CEO of Armajaro who just took delivery of all that cocoa, gave an interview in January that give some insight into why he bought so much cocoa. He is clearly betting on future shortages and hopes to cash in on the likely profits.
On the other hand there are voices that claim Anthony Ward ended holding the bag (or better over 3 million bags of cocoa) after a deal went wrong. Globe and Mail author Paul Waldie claims that Ward ended up on the “wrong side of a private hedging arrangement with Swiss chocolate-maker Barry Callebaut AG.” On Monday, news surfaced that almost half of the cocoa in question had been passed on to Barry Callebaut. Since then, the London price of cocoa has dropped by almost 6 percent.
Yesterday, I mentioned that the massive purchase of cocoa that took place yesterday in London reminded me of the attempts to corner commodities markets in the late 1800s. Today, the UK’s Telegraph makes it explicit. Citing unnamed experts, the paper reports that “it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market.”
Then MSN reported that the hedge fund actually has a name. It’s Armajaro, both a global cocoa broker and the operator of several hedge funds. Later Wall Street Journal Online reported that BNP Paris Bas and nine other brokers took possession of the cocoa. Ah, confusion. That’s what a corner is all about.
Futures markets are basically places where people sell things they don’t have to people who don’t want them. In plain English, this means, traders just shuffle papers in the hopes of either averting price risk or making a profit. Positions are squared with opposite positions before the due date and nobody ever has to deal with the messy reality of the actual commodity. Only two percent of futures contracts in cocoa ever result in actual delivery of cocoa.
