British financier buys all of Europe's cocoa

The 658 million-pound trade is the biggest in 14 years.

By Elizabeth Strott Jul 19, 2010 10:34AM

Cocoa beans (© Colin Cooke/StockFood Creative/Getty Images)There's a new Willy Wonka in England.


Anthony Ward, a commodities trader with hedge fund Armajaro Holdings, bought 241,000 tons of cocoa beans -- the equivalent of all of Europe's supply -- for £658 million, or more than $1 billion, according to British newspaper reports, the biggest single purchase in 14 years.


The purchase came as prices rose to £2,732 per ton, the highest level since 1977.


Ward now owns enough cocoa to manufacture more than 5 billion quarter-pound chocolate bars -- enough to fill five Titanics, according to Chris Skinner, chairman of the Financial Services Club.


The price of cocoa has risen because production of the beans has decreased in Africa.


Ward could also force the price of chocolate bars to rise because he has such a large piece of the market, amassing about 15% of the world's market over the past decade.


In 2002, Ward bought 204,000 tons of cocoa when West Africa, where most of the world's cocoa is grown and harvested, was experiencing poor harvests and political instability.


In an unusual twist, Armajaro, which Ward co-founded, has taken delivery of the beans, and they'll likely be held in warehouses in London, Liverpool, Humberside and Holland, according to reports.


Typically, traders exchange contracts without ever taking possession of the stock.


Ward co-founded Armajaro in 1998 and is the former chairman of the European Cocoa Association.

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