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How Chinese Economic Growth Relates to Restaurants and Pilots
October 29, 2014
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October 31, 2014
By guest blogger Maddie Vance with Elaine Schwartz
With Halloween approaching, I decided it was time to get my candy shopping done for all the eager trick-or-treaters who would soon be knocking at my door. I picked the usual Halloween favorites like Sour Patch Kids, Blowpops, and lots of chocolate. At the check-out, I noticed the bulk pack of mini Hershey’s bars was a little more than I usually pay. The cause?
Ebola is Probably Not to Blame for Chocolate Price Hikes
In September, the price of raw cocoa was at a three-year high. The spike was due to the increased fear that Ebola could spread into Ivory Coast and Ghana. Producing more than half the world’s cocoa, Ivory Coast and Ghana are Liberia’s neighbors.
From: Politico
Why then has the price gone up since the beginning of 2013? Most analysts cite increasing demand from emerging markets like the BRICs and China (noted in econlife last February) and then a complicated set of facts on the supply side that range from weather to politics to stored beans to Ebola constraining itinerant workers.
You can see in this Nasdaq graph that the spike in the price of raw cocoa matched the heightened fear of Ebola at the end of September.
From: Nasdaq
The Bottom Line: Supply and Demand
Because changes in supply and demand are nudging the price of raw cocoa upward, mini Hersheys have been more expensive. As for Ebola, it is more likely that fear on the supply side—not the disease itself—could further affect the price of my mini Hersheys.
