Just when you thought you knew all the consequences of the Ebola pandemic, here’s another one: it could affect the supply of chocolate. Of course that doesn’t rise to the seriousness of illness and death, but it does show how much Ebola affects trade and production.
An estimated 70% of the world’s cocoa beans come from the West African countries of Ivory Coast, Ghana, Nigeria and Cameroon. Ivory Coast is the world’s largest producer, exporting 37.8% of the world’s cocoa, according to the Wall Street Journal. (In fact, Ivory Coast just posted a record harvest and the government increased its minimum price to farmers.)
As with other crops and minerals in Africa, there are human rights and economic concerns about workers (cocoa growing and harvesting is labor intensive) being paid fairly and about children being exploited for their labor.
Now comes the specter of Ebola—which has yet to strike any of these countries. But Ivory Coast borders Liberia and Guinea which (along with Sierra Leone) have been hardest hit by the largest Ebola outbreak in history. (Liberia exports a tiny amount of the world’s cocoa—about 0.2%.)
Concerns about human rights and fair pay are probably bigger issues than Ebola when it comes to cocoa production. But there is the fear that if Ebola does spread to major cocoa-producing countries—or if the fear of Ebola spreads to those countries—it will disrupt the cocoa industry. According to a Bloomberg News report that ran in the Los Angeles Times earlier this week, cocoa prices have been rising steadily for six months. Bloomberg quotes an analyst saying the most recent upswing in demand is tied to the Ebola risk. (Consumption is up as well.)
Hedge funds are increasing their investments in cocoa, predicting that prices will continue rising due to a potential Ebola-related shortage, according to the Bloomberg report. (Maybe CalPERS shouldn’t have liquidated their hedge fund positions after all…)
But just this nervous speculation and investment fluctuation shows how a deadly epidemic can cripple commodities markets as well. Ebola could also pose a similar threat to gold production in other West African countries which, so far, have not been hit by the disease.
These are part of the socioeconomic concerns that Nkosazana Dlamini Zuma, chair of the African Union Commission, raised when she visited the editorial board of the Los Angeles Times on Thursday. Whether the Ebola fears are real or far-fetched for people in the course of commerce, what happens when it means that when ships stop docking in ports, shipments stop getting delivered, and people stop working in fields? We’re not there yet. But it’s just more reason for world government and health leaders to set up and staff more treatment centers and trace contacts of stricken sufferers.
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