This, my friends, is a chocolate toilet being offered by Bathrooms.com.
Made from 100% Belgian chocolate, this tasty throne can be yours for about $17,580.
Not only is this one of the most ridiculous things any individual could spend money on, but with cocoa futures just coming off of three-year highs, now is definitely not the time to pony up nearly $20,000 for a cocoa crapper.
A New Sheriff in Town
The largest producer of cocoa in the world is the Ivory Coast. And up until 2011, it was ruled by Laurent Gbagbo — your typical hard-line West African ruler who refused to step down after losing an election to Alassane Ouattara.
Eventually, Gbagbo was physically removed from his position. Citizens were delighted that the former leader, who has since been charged with murder, rape, persecution, and inhumane acts by the International Criminal Court, was no longer in control.
And certainly cocoa traders were thrilled, as with Gbagbo in charge, significant political volatility consistently kept traders on edge — and necessary financing at a distance.
Today, however, it’s a different story.
Since taking over, Ouattara has made big moves to modernize and legitimize the cocoa markets of the Ivory Coast. As analyst Andy Waldock reported last year:
There’s been rapid development in soil reclamation, fertilization, and education. Most cocoa is grown by individual farmers on small plots of land and is harvested by hand as it has been for hundreds of years. The application of modern agronomy techniques will cause the Ivory Coast’s cocoa production to increase rapidly over the coming years. The combination of infrastructure improvement and political stability supporting free trade, as well as modern farming practices will increase yield and depress prices once the changes are fully implemented.
The effects of Ouattara’s presidency can already be seen in the decline of volatility in cocoa prices. Major chocolate producers no longer have to worry about civil war, the government closing ports or henchmen attacking farmers on their way to collection stations to force the price higher.
Since Ouattara came on the scene, the Ivory Coast has delivered record yields, and major players like Cargill are doubling production. The groundwork of a free market without the heavy burden of extreme corruption has given the Ivory Coast a stronger foothold as it attempts to rapidly increase production.
Mao Loves Chocolate
Although U.S. demand for chocolate remains high, nowhere is it growing faster than in China. In fact, demand is so robust that it’s outstripping cocoa bean production.
As reported in the Guardian just a few months ago…
The price of chocolate could soar over the next few years as surging demand puts further pressure on the global cocoa crisis – and experts predict the demand could become unsustainable by 2020.
Experts are warning that a growing taste for chocolate in Asia – particularly in China – means cocoa farmers will need more help to provide a greater amount to export or manufacturers will be forced to use less cocoa in their products.
It is predicted chocolate prices will soar to keep up with the rising demand.
To make matters worse, heavy showers in West Africa last month sent warning signals throughout the market that harvests wouldn’t be able to meet rising demand. This region has actually seen a tripling of rainfall compared to normal, and this has increased the risk of crop diseases and quality degradation.
Yes, it’s a horrible time to be Hershey — but a great time for those who ponied up for cocoa futures last year.
Take a look…
Perhaps the easiest and most hassle-free way to play cocoa futures for most investors is through the iPath DJ-UBS Cocoa ETN (NYSE: NIB), which is up 34% since last August.
Eventually we’ll see this thing correct a bit, but over the long term, I believe cocoa futures are going to remain high.
Although it looks like cocoa producers — specifically Ivory Coast producers — are laying the necessary groundwork to supply the growing demand for cocoa, I’m not convinced it’s going to be smooth sailing from here on out.
This all depends on how sustainable these modernization actions are (soil degradation continues to be a concern, especially as producers aim to ramp things up), how long political stability can last in the region, and, of course, the threat of climate change, which some experts believe could lead to warming temperatures and changing precipitation patterns that could subsequently lead to a decline in growing conditions over the next twenty years.
Peter Laderach from the International Centre for Tropical Agriculture has actually suggested that scientists breed new crop varieties that can adapt to warmer conditions and that farmers develop new crop management techniques.
If a decline in growing conditions does unfold, I suspect both will happen, as the demand for chocolate will not go gently into that good night. And rest assured, dear reader, that a simple Hershey Bar — which is already at the low end of the spectrum in quality and taste — will cost you a small fortune.
And for those of you who won’t even consider anything less than organic 82% raw chocolate from a small, fair-trade operation where the beans are not picked and prepared by child slaves, prepare for sticker shock.
I don’t say this to sound brash. It is simply the reality of the market.
Chocolate production has a long and uncomfortable history of slavery, crop and soil destruction, and violence. But with more environmental and human rights transparency being required by importers, particularly in the highly lucrative Fair Trade segment, we could finally be looking at a transition away from an antiquated system that most folks in the Western world have no idea still exists.
Yes, this transition will also likely lead to an increase in prices, too.
My point is simple: Like it or not, the price of chocolate is only going to get more and more expensive. So you might as well try to get a piece of the action yourself, make a few extra bucks, and take comfort in knowing that no one had to be sold into slavery in order to give Nestlé a discount on its cocoa order.
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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