Supply and Demand Assignment

3 03 2011

Rising Cocoa Prices May Leave Chocolate Fans Bitter

The price of the cocoa is rising because Ivory Coast, a West African country that produces 40% of the world’s cocoa beans is currently in a political unrest with a ban on cocoa bean exportation to the global market. This ban dramatically decreased the quantity of cocoa supply available globally and brought an increase to its price. Another factor that caused the rise of cocoa bean price is the increasing demand of cocoa bean from the global market, especially from highly populated countries such as China and India. Therefore, while the demand for cocoa is continuously rising, the supply of cocoa bean is considerably decreasing, which result in a high equilibrium market price for cocoa bean.