Time to start hoarding
Hershey's (HSY)? Some experts in the cocoa industry say that the world could run out of affordable chocolate within 20 years,
according to The Independent.
Cocoa is headed for a shortage, they say, and eventually a single chocolate bar could cost $11 on average. The price of cocoa has already shot to an all-time high lately.
"In 20 years chocolate will be like caviar," said a conservation researcher in Ghana, a hot spot for cocoa production. "It will become so rare and so expensive that the average Joe just won't be able to afford it."
The problem is that it's becoming too difficult to farm cocoa in traditional fields in Africa. The soil is depleted of nutrients, one expert says, and a labor shortage is hurting production. That's affecting cocoa crops on the continent, although cocoa can still be grown in South America, the Caribbean and Asia.
In places like Ghana, the Independent reports, young farmers are abandoning cocoa for the more profitable rubber plant. It doesn't help that cocoa plants are getting hit with diseases.
Chocolate would never disappear altogether. But it may become an expensive treat that fewer people can afford. Cheaper alternatives such as carob could fill the void.
One recent study showed that the chocolate market is only growing in the premium, high-end sector. And fans will continue to get their chocolate fix, but at higher prices.
"Fine chocolate, like fine wine, will cost considerably more, as cocoa farmers stop leaving the land in search of better-paid jobs in the cities," the chair of the UK Academy of Chocolate told the Independent. "The result will be more careful cultivation of the crops, and a greater supply of fine cocoas."
The pressure is now on Cadbury, which is owned by
Kraft (KFT), and
Nestlé (NSRGF) to plant sustainable cocoa farms and give workers incentive to stay. Hershey also has a considerable interest as well -- although the company has started replacing the cocoa butter in its chocolate bars with vegetable oil.
The big winner in all this is Anthony Ward, the London hedge fund manager who has
bought up so much cocoa that he has all but cornered the market this year. Some say Ward now owns the equivalent of 5 billion chocolate bars.
