Armajaro, a London hedge fund that few outside of finance had heard of until last week, grabbed headlines around the world when it took physical delivery of 240,100 tons of cocoa beans from London’s Liffe exchange. The shipment is equal to 7 percent of the global annual production of cocoa.
The shipment comprises almost every bean in the stocks of Liffe-registered warehouses.
However, the fund denies that it is hoarding the beans or doing anything illegal: It simply bet that there would be a bull market in chocolate many months ago, bought cocoa futures for July delivery and then held them until expiration. Now, it says that it has agreements with chocolate makers to buy up the stock.
All the excitement in the market has helped push cocoa futures for September delivery to $2,992 per metric ton on the ICE in New York. The December contract traded even higher, at $3,015.
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