The global economic crisis has led to a sharp drop in oil prices, hitting Venezuela particularly hard.
Ahead of a vote that could see Hugo Chavez remain in power beyond his current term, he told supporters he would protect the country from a financial meltdown. Critics argue Chavez is holding the vote now to ensure a win, before the economy gets any worse, and his popularity fades.
Mariana Sanchez reports for Al Jazeera.
President Obama celebrates the passage of the American Recovery and Reinvestment Act while keeping his eyes on the tough road ahead.
If you bought your honey a sweet box of chocolates today for Valentine’s Day, you likely paid a pretty penny. While just about every commodity today is experiencing severe deflationary pressures, the one exception is world cocoa prices which continue to climb. London cocoa prices jumped by 66% last year to reach a 23-year high in December at £1,820 a tonne. New York cocoa prices, which are less dependent on African producers climbed 26% year over year but 53% over two years. The reason for the high prices is the on-going civil war in the Côte d’Ivoire which produces 40% of the world’s cocoa.
Though native to the Caribbean Basin, cocoa is now grown in more than thirty-five countries world wide. The cultivated area covers between 3.5 and 4.5 million hectares. This area yields an annual production of approximately 2.7 million tons of cocoa beans. The largest producers after the Côte d’Ivoire are Ghana (20% of world production), Indonesia (12%), Cameroon (5%), Nigeria and Brazil (4%). The world’s most highly prized cocoa (cacao criollo) comes from Colombia and Venezuela.
World trade in cocoa is asymmetrical. In international trade, the chocolate industry is segmented by 3 broad categories: raw cocoa bean farming, cocoa processing and finished chocolate manufacturing.
Even though cocoa processing and finished chocolate manufacturing companies make much higher profits than cocoa bean farmers, top cocoa chocolate exporters continue to specialize in cocoa bean production. Historically, their motivation has been the fact that most importing countries impose much higher tariffs on processed cocoa and finished chocolates. For example, the European Union charges a 7.7% tariff on cocoa powder imports and 15% on chocolates containing cocoa butter, but exempts raw cocoa beans. Similarly, Japan and the United States have no ad valorem duty on unprocessed cocoa beans but charge significant cocoa chocolate import tariffs of up to 30%.
This tariff structure prevents the development of a chocolate manufacturing sector in the developing world. It is but one more example of an asymmetry in global trade. European and American manufacturers gain the profits denied poor African nations. Happy Valentine’s Day.
From the Deutsche Financial Times:
In the golden years after Ivory Coast won independence from France in 1960, cocoa plantations were the lush engine of prosperity. Millions of migrants helped build what would become the world’s biggest cocoa industry. Skyscrapers built on the proceeds turned Abidjan, the commercial capital, into a so-called “Manhattan of West Africa”. As the cocoa pods swelled, so did the nation’s self-confidence.
Today, the industry’s prospects appear decidedly sickly. Political turmoil that followed the outbreak of a civil war in 2002 has hindered the investment needed to replace ageing trees. Cocoa-growing, formerly a source of pride, has lost its prestige.
The cloud hanging over Ivory Coast’s cocoa industry – which delivers 40 per cent of the world’s cocoa – has fuelled a gravity defying rally in cocoa prices even as the global slowdown has caused prices for other commodities to slump.
In Pakistan, military analysts analysts say US attacks targeted at alleged Taliban fighters in the northern tribal areas Thave eroded the government’s credibility and may be doing more harm than good.
Al Jazeera’s Kamal Hyder reports from the city of Peshawar, where he finds people tired of being caught up in the battle between the Taliban and pro-American government forces.
The arrival of more than 1.5 million Muslims in the last four decades has made Islam Italy’s second largest religion.