Copyright 2002 TecEd

Cocoa is a primary product and is the main ingredient of chocolate, along with milk. It is grown mainly in Africa and South America, with the Ivory Coast (Cote d’Ivoire) being the biggest producer. Almost 90% of production comes from small farms. Prices charged for chocolate in consumer markets are relatively stable.

Prices fluctuate on a daily basis, but the two charts below show the fluctuation in annual prices and monthly prices (during the year 2000).

Questions

1. Using the graphs, explain two problems fluctuating cocoa prices might present to a small cocoa farmer in Africa or South America. (E3/C2)
2. Using the graphs, propose and justify one policy a UK chocolate manufacturer could use to cope with these fluctating cocoa prices. (A2)

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Source:International Cocoa Organisation website www.icco.org