Anthony Ward, manager of the hedge fund Armajaro Holdings, made a big bet on the rising price of chocolate by picking up about $1 billion worth of cocoa beans last week, but it's not business as usual, where traders trade the rights to buy or sell commodities at a certain price in the future. Instead, Ward had all 240,000 tons physically delivered, reports AOL News.
It was a stunning move- yet one in keeping with the moneyman the British press has dubbed "Choc Finger," after the Bond villain Goldfinger. World chocolate prices have more than doubled in the past two years, and poor harvests in Ghana and the Ivory Coast have further squeezed supply.
Some analysts now worry that Ward's purchase is an attempt to gain enough power to manipulate the market. "If it looks like cornering, feels like cornering, it probably is cornering," Eugen Weinberg, an analyst with German financial institution Commerzbank, told theTelegraph.
In a similar deal, Ward made a tidy profit in 2006, clearing about $60 million off a purchase of 200,000 tons of African cocoa beans. And there's nothing illegal about Ward's reputed efforts to corner the cocoa market. In Europe there are no limits on how much of a commodity one can buy.
Cocoa prices have been on the rise since 2007, and manufacturers have coped by reducing their products' portion sizes, using less cocoa, raising prices or a combination of all three. In one case, the product was changed so much even the use of the term "chocolate bar" was called into question: After replacing cocoa butter with vegetable oil in 2008, Hershey had to change some product descriptions to "chocolate candy" or just the adjective "chocolaty."