CocoaBeans posts

Two years ago when the recession hit and hedge funds needed a place to stash their money they looked to commodities such as oil, corn and rice. Prices rose and then jumped even higher as fears of shortages spread. Then, as the global economy improved, commodity prices eased back to more sustainable levels.

Now economic jitters have returned and hedge funds need a new investment. For one London-based fund, that commodity is cocoa, and chocolate lovers are not impressed.

Cocoa prices on the London market rose to a 33-year high of £2,732 ($4,379) a tonne last week, and it's not because there was a sudden shortage in supply. Anthony Ward, a hedge fund manager at London-based Armajaro, has bought up almost Europe's entire supply of cocoa - or 7% of the world's crop - enough to manipulate market prices, according to media reports in The New York Times and the Financial Times.

So is there going to be a shortage of cocoa beans, and should you invest in cocoa?