How the ripples of a political crisis in Ivory Coast are affecting Union Square chocolate makers
The price of cocoa has soared recently yet Alex Whitmore, co-founder of Union Square-based chocolatiers Taza Chocolate, isn’t worried one bit. In fact he sees a silver lining in the spiking cocoa market, even if it means Taza will have to raise the prices of its high-end, highly addictive Mexican-style chocolate discs.**
“For us it’s not a terrible negative,” says Alex (in photo above with Taza co-founder Larry Slotnick). “Because it means more money for our cocoa farmers.”
Before chatting more with Alex about global chocolate markets, here’s the backstory on why cocoa prices are escalating.
This year, cocoa futures hit a 30 year high. Commodities like chocolate were already soaring and then Ivory Coast, which produces over a third of the world’s chocolate, began its sad descent into civil war. Alassane Outtara, the internationally recognized winner of Ivory Coast’s recent presidential election, has attempted to halt all cocoa exports in an effort to starve the coffers of Laurent Gbagbo, the incumbent president who refuses to step down. And so an estimated 475,000 tons of cocoa is sitting in Ivory Coast’s ports (some may have been smuggled into neighboring countries like Ghana). This politically-motivated cocoa embargo has hurt the cocoa market—which was already facing an emerging supply problem—and sent prices higher. (For more on chocolate as it relates to political, environmental and financial issues, see this Globe and Mail article or this Telegraph article.
So has the crisis in Ivory Coast crisis affected Taza in Somerville?
“It has already affected our financials,” Alex reports. “The commodities markets are going crazy right now—and not just cocoa. Sugar is through the roof, so is coffee. Big chocolate companies like Kraft, Mars and Archer Daniels can hedge their buying; they bought chocolate futures when it was trading at 2,700 per ton—chocolate futures recently traded as high as 3,700 per ton. They do this to offset their losses; small guys like us can’t do this.”
Yet rising cocoa prices mean better prices for cocoa farmers everywhere, including growers in the Dominican Republic, where Taza buys its chocolate. Taza already pays premium prices for its chocolate because it is certified organic and follows fair trade rules according to “Taza Chocolate Direct Trade” principles. So whereas handing over more money to cocoa farmers might have Cadbury worried, Taza isn’t fazed.
“We see the current spike in cocoa prices as an opportunity to pay our cocoa farmers more,” says Alex. “We may have to increase our product prices down the line if the current price of cocoa is sustained. Yet we have customers—especially in Somerville and Cambridge—who not only like our chocolate, they are also very focused on the social and economic mission of our company.”
To learn much more about Taza chocolate as it relates to direct trade, the environment and the global cocoa market, visit the amazingly educational Taza web site. We find that the more you learn about Taza, the better their chocolate tastes. And it was dangerously good from the get-go.
Don’t miss the next Nibble post where you’ll learn about where to buy Mexican chocolate in the square—plus an animated short featuring a Mexican chocolate whisk!
** Taza will not be raising the prices on their chocolate!