As all of us know the big change through the food world trade, food and all kind of commodities became much more demanded than before. The fast Population growth and the high living income created a big difference in how the people live, for example, nowadays even the developing countries need more food because of the improvement of living standers and instead of depending on beans and vegetables they started also to depend on meet as a usual lifestyle. In addition, exporting and importing plays a big role in changing the prices of food and commodities. Exporting and importing leads mostly to make definite changes in prices and markets, also it may effect the consumers and producers either benefit or harm to one of the parties. In this report I will discuss specifically the rise of chocolate price by using the “Higher costs bite chocolate makers” article.
This article which I chose to discuss contains a lot of topics and the main one is (rising the price of chocolate). Chocolate ingredients which is cocoa butter and sugar has risen sharply in this year (2016) known that chocolate have the biggest sales in US. The article also shows the problems and the difficulties that faced the companies and chocolate makers specially in the way of preparing and processing the chocolate. In the end of “Higher costs bite chocolate makers” article, there is a topic discussing some future trading commission.
“Higher costs bite chocolate makers” article mainly focus on how the chocolate raised sharply and fast, this is unwelcome development. This development can let both the chocolate maker and consumers face difficulty in trading and getting the consumers them needs of chocolate. Just to clarify, trading have specific economic models to follow specially in exporting and importing operations. For example, in importing consumers get the most benefit, producers will get a smaller area in the model which make them loss, this means the prices are falling, but in exporting the opposite happens producers win and get the most benefit and the consumer stay under stress of paying more. In the article the chocolate prices increased, this is mean that the consumers should pay more to cover the shortage that will happens with the producers. In an easy way producers
will pay much more money because the main chocolate ingredients which is cocoa butter and sugar became in a higher price, so the product prices will be also high and this is will me such a kind of overload on consumers.
The research in the article said, there is 45% of the market and 88% of chocolate net sale in North America. The data clearly show that the US have the biggest sale of chocolate which is about 80%. On the other hand, in West Africa there is about 70% of the world cocoa is grown, known that the cocoa is the most important element of chocolate and it is cost 21% more than a year ago. Then the price normally will get higher. The cocoa crop in Ghana considered as the second largest producer, but in 2015 they use a chemical recourse which destroys the development of the cocoa and destroys the economy system, this let the cost of cocoa be lower in 2015, but cocoa prices get high again in 2016 and its expected to increase by 2.2%.
There is another reason of why the chocolate prices is rising up, processing and producing chocolate bars became expensive. Researches in the article believe that transportations, marketing and high taxes. Transportations do need a cost because no transportations without cars, trucks, trains and airplanes those machines need a lot of oil and the oil need a financial budget.
Here is a small discussion about problems and solutions of exporting and importing using the economic models.
if the cocoa exported to any country the cost of the chocolate will be higher because there is something called tariff. The producer will get benefit as the model show above the prices will be higher and the consumer will get suffer because of the high prices, so the price of the exported chocolate will be more expensive. On the other hand, if importing is already done in a specific country the producers will have the loss and the consumer will get the benefit, this means that the people will pay for the chocolate a lower price. There is a solution to solve the high tariff (exporting) of chocolate bar problem which is reduce exporting, decrease the cost of tariff and depend on the domestic production and importing food more than exporting.
In my opinion, importing is a good idea sometimes because there are some countries that do not have the perfect area and climate to grow some specific kind of crops and commodities.
In conclusion, I chose an article about rising up the price of chocolate and discuss it. Increasing price of crops and commodities can harm the both side sometimes (consumers and producers). Cost of chocolate have increased sharply in 2016. There is some main reason of raising the price up like exporting activities and the way of processing the chocolate bars. Chocolate makers didn’t like the huge change of chocolate prices; they will have forced to pay more for the crops then the consumer will force to pay the shortage that will happen in the consumer sector.