In praise of Anthony Ward

A British financier who dramatically cornered a huge chunk of the world’s cocoa supply has been dubbed ‘Choc Finger’ by City traders.

Anthony Ward, 50, who has amassed a £36?million fortune, is a real-life Willy Wonka and now owns enough beans to manufacture 5.3?billion quarter-pound chocolate bars.

The holding is so massive it threatens to force manufacturers to raise the price of some of Britain’s most popular chocolate.

Yes, he\’s a dirty, filthy, lucre seeking speculator.

Interested in nothing but using money to make more money.

So, let us think of what his attempt to corner the market will actually mean out there in the real world.

He\’s actually taken delivery of his 240,000 odd tonnes of beans. They are now in storage. Not all that surprisingly, the price of cocoa beans has therefore risen. This means that all of those poor cocoa farmers in the Ivory Coast, Ghana and so on will now be receiving more money for their next harvest. The poor get richer. Excellent, don\’t you think?

There will also be more effort put into increasing the size of the next crop. So there will be more cocoa for us all to enjoy in the future. How lovely!

Further, given the rise in cocoa prices it\’s likely that the price of chocolate will rise. This will, other things being equal, lead to a fall in consumption. Given the obesity epidemic this is a result to be welcomed: just think of all the money that the NHS won\’t now have to pay out to treat chocoholics!

But there\’s more! By attempting a corner Ward is setting off exactly the chain of events which will, in time, make the corner fail. The rise in prices will lead to more production and less consumption: whether or not he makes money depends upon whether he can get out of his corner position before these effects are felt across a series of harvests and shrinking waistlines.

So, by being a fatcat bastard City financier, playing with money to make money, Ward makes the poor richer there and the poor healthier here: plus saves taxpayers\’ cash into the bargain.

Hurrah!

Time for a knighthood don\’t you think?

8 thoughts on “In praise of Anthony Ward”

  1. Perhaps, though, he should give some thought to what happened to Bunker Hunt before ordering a bigger yacht. 🙂

  2. If cocoa farmers do respond to this particular price signal by increasing production it would probably be a bad thing. After all, in itself, it’s not an indication that demand through consumption has increased. Therefore, any consequent increase in production would be more likely to result in a glut and a collapse in prices. For the producer who hasn’t had a great harvest this could be disastrous. So thanks for that Mr Ward!

    You seem very Panglossian about markets in foodstuffs. Agriculture is one area where their operation is perhaps most often problematic. Supply is sticky and exposed to industry-specific risks. This means price signals don’t always produce an acceptable equilibrium in an acceptable time period – and because the end product is food that can be a disaster. In the long run things are more likely to work out – but JMK’s dictum was never more accurate than in this instance: by that time the consumer may be dead.

    Hedging is obviously a huge boon to farmers and a way to address these farming-specific risks. But when the item being hedged becomes too much a financial commodity and ends up being chased all round the place by a wave of liquidity, price signals can get screwed.

  3. Motive, not outcome, is what matters to our Fabian Overlords, Tim. It matters not that poor become richer, because Choccy Fingers did it for greed (woe!). Similarly it matters not that biofuels starve people through price distortions, because the intentions were good, you see?

    The Fabians in particular have a long history of wanting to kill people for good reasons. They even invented a word for it, euthanasia – “kind killing”

  4. Pedantry corner: euthanasia does not mean “kind killing” in classical Greek, but “well death” (ie dying well)

  5. Standby for an article in the Grauniad on poor, single-mums suffering from “chocolate poverty”.

    Something must be done!

  6. So, er, “So there will be more cocoa for us all to enjoy in the future” and somehow, via an intermediate step, “This will, other things being equal, lead to a fall in consumption” which will curb obesity.

    So what are you saying is this – more chocolate is made = so there will be less obesity. Do elaborate. . .

  7. Gaw – if you think that markets are inappropriate for food then what do you think should be the substitute? The communist countries proved that central planning of food production is worse than market signals and all your stated problems are still problems under a regulatory system but worse because regulators have less information and are open to judicial review.

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