Cocoa futures were up over 2% on Friday, and they have been flying higher this week.
Ebola is being blamed for the spike.
According to a report by The Wall Street Journal’s Alexandra Wexler and Sara Jerving, concerns that Ebola will reach either Guinea or the Ivory Coast are scaring the cocoa futures market.
Ivory Coast and Ghana produce 60% of the world’s coca, the report said, though no cases of Ebola have been confirmed in either country so far.
Ivory Coast shares a border with Liberia and Guinea, two of the countries that have seen an Ebola outbreak; most of Ghana’s western border is with Ivory Coast. Sierra Leone has also been affected by a significant Ebola outbreak.
Wexler and Jerving cited comments from Hector Galvan, a strategist at RJO Futures in Chicago, who said: “The fear people have is that once Ebola is verified in Ivory Coast … it will be pandemonium. The worst-case scenario — you lose virtually all cocoa exports out of Ivory Coast [or] Ghana for an unknown period of time.”
Here is a chart of Cocoa futures going back about six weeks, which you can see have ripped higher over the past several days.