Archive for the ‘Cacao – Cocoa Headlines’ Category

The DNA of chocolate has been unlocked

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The Food Network has been brilliant at showcasing the most incredible James Beard award winners for excellence. However, their latest attempt at showcasing desserts on their show “Top Chef Just Desserts” , left me a bit wary. Understanding the complexities of developing recipes on the fly for desserts, can be daunting.

For example, it has taken us almost two years to perfect our entremets, and we’ve been developing and perfecting our Spring desserts for over 6 months. Some are more difficult to develop than others, but my point is that creating dessert recipes is a fine science. It’s not just about matching flavor profiles, but understand the science behind the ingredients.

I saw this blog article and had the share the latest science behind chocolate by Jonathan Bender, Thu., Dec. 30 2010 @ 8:30AM Categories: News

 

Great chocolatiers have always been a bit like mad scientists, and now they might just have the science to begin creating the perfect chocolate bar.

Fast Company reports that a team of French scientists has unlocked the genetic code of chocolate. And not just any chocolate, but the DNA of Theobroma cacao, a species of cacao used primarily to make gourmet dark chocolate.

By sequencing the genome of a cacao tree, the scientists should be able to create bio-engineered fine cocoa that is resistant to disease. The price of cocoa would then theoretically go down. And since cocoa is one of the main ingredients used to make chocolate, we’d be looking at cheaper fine chocolate bars. That’s the reason this study was underwritten by Hershey’s Corp. and Valrhona.

An interesting question is whether there would be a differentiation between genetically engineered cocoa and naturally occurring cocoa. The chocolate market is like the coffee market, with plenty of fair-trade and small-batch companies attempting to provide a tree to chocolate store approach.

But in a world where pest-resistant and frost-resistant crops are commonly accepted, is disease-resistent cacao really such a foreign concept? Do you care if your chocolate bar is genetically engineered if it tastes exactly the same?

[Image via Flickr: EverJean]

Cocoa at 33-Year High as Demand Outstrips Supply

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The driver of record cocoa prices (Financial Times subscription required) is a classic supply/demand story. It’s also a story of what happens to hedgers and traders when they get caught on the wrong side of a market.

On the supply side, inventories at exchange registered warehouses are at very low levels. The Ivory Coast, which supplies 40% of the world’s cocoa, had a poor crop. The trees are old and disease prone, and without new investment crop production will continue to fall. Consequently, many believe that cocoa demand will outstrip supply for the fifth straight year.

Now enter the hedgers. Hedgers usually sell futures against their crop. Cocoa processors also use hedges to lock in a certain profit. As contracts expire, they usually roll them over into the next forward month. With prices hitting new highs, hedgers must pay the difference to roll their contracts forward, especially if they put the hedge on early. With prices rising, industrial processors also bought call options, which gave them the right to buy cocoa at a given price.

The one thing to remember is that industrial processors must have the product at all costs to stay in business. This was their rationale for buying call options.

Next we have the speculators. Banks love to “sell” call options. In a normal market, options expire to zero. Banks then pocket the premium on their options. However, in a raging bull market, the options keep going up instead of down. This forced banks to hedge their trades by buying futures. Such a move further exacerbated price rises.

Spot cocoa in London hit a high of 2,500 pounds per ton; July cocoa on the futures market traded at 2,558 pounds per ton.

The July spot contract expires July 15. However, even taking into account excess speculation, the supply/demand fundamentals remain intact. Greater demand for chocolate will keep prices firm.