Ebola Could Affect Availability of Important Ingredient in Chocolate

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Oct 17, 2014
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The Ebola crisis seems to affect everything it touches – or could have touched. Stocks in airlines, which carried the original patient to the United States and transported one of that patient’s nurses from Cleveland to Dallas earlier this week, largely went down; stocks related to the production of material used in the medical handling of specimens from Ebola patients went up. Well, some did and some did not.

Recently, following the revelation that a nurse who treated the first patient to be diagnosed with Ebola in the United States was on a Carnival (CCL, Financial) cruise – reportedly, she has been quarantined aboard ship since learning that the Centers for Disease Control and Prevention required active monitoring of people who may have been exposed – the price of Carnival’s stock declined 8% compared to its price in September.

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Current odds might be against the likelihood that you or someone you know will die from Ebola, but, back in West Africa, where the outbreak began and rages still, Ebola could be on the verge of affecting consumers in unexpected ways.

When people feel frightened and overwhelmed by events, they often turn to so-called “comfort foods,” and one of the most popular such foods is chocolate – but Ebola could keep those who prefer chocolate from finding the comfort they seek.

Rick Newman of Yahoo! Finance reports that Ebola poses a direct threat to the world’s chocolate supply.

“The two largest producers of cocoa beans – the magic ingredient that makes chocolate chocolate – are Ivory Coast … and Ghana, which combined provide about 60% of the world's supply,” Newman writes. “Neither country is suffering an Ebola outbreak, but they’re in the same part of West Africa that includes Liberia, Sierra Leone and Guinea, which are basically ground zero for the killer virus that has claimed more than 4,000 lives so far.”

If that isn’t enough bad news for chocolate lovers, Newman reports that Nigeria, which produces another 6% of the world’s cocoa beans, has had about two dozen cases of Ebola within its borders.

Newman reports that cocoa production hasn’t been halted, but the Ivory Coast has sealed its borders. Since some of the workers who harvest the beans enter the country from elsewhere, there is a real potential for production to be severely restricted.

Newman says the World Cocoa Foundation, a trade group, has persuaded chocolate companies, like Mars and Nestlé (NESN, Financial), to contribute to efforts to fight Ebola; commodities traders warn that cocoa prices could double if Ebola spreads to those cocoa bean-producing countries that border on the afflicted ones.

What could that do to stock prices?

Well, Mars is a privately held company – the third-largest in the United States, according to Forbes. Nestlé is based in Switzerland; its price has gone down 7% since September, when chocolate prices spiked briefly, and the price of a share in Nestlé was, temporarily, at its highest level.

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The Hershey Co. (HSY, Financial), the largest chocolate manufacturer in North America, has seen a slight increase in the price of a share of its stock since last month, but it is still below the company’s high-water mark set in March of this year.

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Ebola should not affect either the price or the availability of Halloween candy, Newman assures readers; it remains to be seen, however, whether it will affect chocolate supplies for Christmas or Valentine’s Day or Easter – and how that, in turn, might affect stock prices.