Supply shortages and signs of growing demand are driving cocoa prices

Im not satisfied with C. They make it sound as if cocoa trees that doesnt bear fruit this year wont bear fruit the next year either. This is not true. Next year it can all be back to normal. As if more trees would be the only possible solution to gain more beans. What if the disadvantageous weather stays? Then there is nothing that more trees can do about it.

The possibility of increasing the import restrictions is the only reasonable strengthener here.

Hello, tyildirim92. Thank you for being patient. I was busy when your request came through earlier, so I am just now getting to this. In fact, I had not worked with this question before, so I took it on in the moment, just before writing this post. The question took me 1:37 to answer correctly. My breakdown:


Okay, this is a basic strengthen question. To strengthen the argument or reasoning, we have to ensure that we grasp the reasoning itself. We can start by deconstructing the passage.


Sentence 1 provides two reasons that cocoa prices are increasing: supply shortages and signs of growing demand.

Sentence 2 ties into the first reason above, namely that severe weather... has limited production.

Sentence 3 focuses on the other reason for increasing cocoa prices: stronger demand for cocoa.

Sentence 4 provides an off-the-wall consideration: apparently, grinding of cocoa beans has increased in both Europe and North America.

Sentence 5 is the conclusion, placing analysts front and center, who predict that cocoa's price will continue to rise for the time being.

The conclusion seems fitting. Supply shortages + growing demand = rising prices. We are seeking to justify the rationale that cocoa's price will continue to rise at least into the near future.


This information is loosely grounded (pardon the pun) in sentence 4. But this would present a problem. If ground cocoa beans could be stored for a long time, then perhaps the supply issue would be less of a concern. The passage seems to raise alarms at the prospect of demand increasing even as supply decreases, but a backup in stored ground cocoa beans might mitigate the issue. This is certainly not what we want in a strengthener.


Nothing about this new information reinforces the supply/demand equation above. What good is an improved processing capacity if there are no beans to process? Whether the manufacturers use the same old equipment or this new technology or technique, the concern remains, exactly as is. We need to look for information to bolster the notion that prices for cocoa products will, for the foreseeable future, continue to go up. In other words, we need a why behind the what, and this does not get us there. It merely offers another what.


An easy choice to write off if you have not practiced CR questions before, this one looks off-topic. But if current cacao trees (sorry, I am a purist when it comes to things chocolatey) are all tapped out and the industry might, in a panic, demand that more crops be planted to increase cacao yields, with this new information, we can appreciate how the issue of low supply and high demand leading to higher cocoa prices would most likely not be resolved in the near future. The current yield is not enough, that much is evident. Now we know that it is probably not going to be enough for the next few years. Provided demand for cocoa continues to rise, so, too, should the prices for cocoa products. There is nothing to find fault with in this one. This answer strengthens the reasoning of the analysts.


The problem here is that we do not know which way the coin will fall, since we have no information on the current restrictions on cocoa imports. Thus, we can only speculate on the policy changes and their likely outcomes:

1) Governments relax restrictions (to allow more cocoa imports)—There is not enough supply, plain and simple. The problem is unresolved, but there is no reason to project that current conditions will necessarily hold into the future.

2) Governments increase restrictions (to allow fewer cocoa imports)—The supply still does not change, and now demand might increase even more. You know, forbidden fruit and all. We would then expect cocoa products to increase in price. However, we cannot deduce that this will be the line the governments pursue, or for how long the governments may keep such policies, so this outcome is uncertain.

We cannot use anything less than a probable outcome of a course of action to strengthen the reasoning of the analysts, so this answer choice, in its open-endedness, is out.


GMAC™ loves these sorts of historical precedent answers, but they are almost always incorrect, and usually for the same reason: What happened in the past may not necessarily happen in the future, and that is as far as we need to pursue this answer choice. That is, there is no compelling reason to believe that the current problem will necessarily persist for the next few years. This cannot be our strengthener.

I hope that helps. If you have further questions, you need only ask. Thank you for the mention.

- Andrew

Excellent Explanation AndrewN
I have the following question on option B :
Does this option elaborate the provided premise of increased processing capacity in the first quarter?
The usage of word "several" , which means not too many.

So can we eliminate this option based on the above two reasons.
Thanks for your help.

D is also a strengthener.

If Govt. removes the restrictions on the imports that would further increase the demand for cocoa in Europe and North America.

The stimulus states 2 things -

1. Fall in supply ( Due to poor weather )
2. Rise in Demand ( North Am. & Europe - Resulting in increase in Cocoa processing)

Result of the 2 situations above will result continuation of the same in near future.....

(B) Suggests improvement in production capacity but the problem at hand is Cocoa production is less ... There can be no justification for increasing productivity when there is scarcity of raw materials..

The crucial question is whether it must be true for the two to refer to same thing in order to strengthen the reasoning—is grinding the same as processing? Are processors of cacao the same as manufacturers? Maybe, maybe not. We are not in a position to make that call. Then, you called attention to several, and I agree that this vague qualifying language, similar to some, does not present a clear enough picture for us to say that the information affects anything. If, say, the two pieces of information aligned perfectly, a best case scenario, and there were only 100 European and North American manufacturers, several could refer to 3 or to 23, and the two extremes, whatever we might set as the upper limit of several, could affect our judgment one way or the other. Thus, the information needs to be further qualified, and we cannot say that (B) strengthens the reasoning.

I hope that helps. Thank you for following up.

- Andrew

Hi AndrewN - a completely grammar related question

In the yellow highlight specifically , i noticed you used the adjective - qualifying (in the phrase qualifying langauge)

I looked up the phrase - qualifying lanaguage and I was surprised that the adjective meant -- vagueness / being wishy -washy / not being specific [language]

This suprised me because

In the world of the GMAT -- doesnt the phrase -- "To qualify" -- actually mean To- limit / To add conditions ? I have seen the GMAT use the phrase "To qualify a claim" / "To qualify the author's response" -- in the context of -- to limit / to add conditions to the claim / to limit / to add conditions to the answer To qualify a claim on the GMAT

Curious, how come, the same 'qaulifying' -- means vagueness / wishy washy on one hand BUT 'To qualify' means to limit / to add conditions on the other hand.

Just wondering if you could re-concile this usage

Strange question, so apologies in advance.

I have a quick question: If we were to modify Option D to say that the "Governments of Europe and North America are likely to relax restrictions on cocoa imports", it would still not be the correct answer, right? And that's because the Government relaxing restrictions would still have no impact on how much cocoa can be supplied (unless the option mentions that relaxation of such restrictions would enable suppliers to supply more cocoa compared to what is being currently supplied). AndrewN

But which option would be the correct answer if an option clearly mentions that the relaxation of restrictions would enable suppliers to supply more cocoa?

Supply shortages and signs of growing demand are driving cocoa prices upward. Unusually severe weather in cocoa-producing regions—too much rain in Brazil and too little in West Africa—has limited production. Further, Europe and North America recently reported stronger demand for cocoa. In the first quarter, grinding of cocoa beans—the first stage in processing cocoa for chocolate—rose 8.1 percent in Europe and 16 percent in North America. Analysts have concluded that cocoa's price will continue to rise at least into the near future.

Which of the following would, if true, most strengthen the reasoning above?

A. Ground cocoa beans can be stored for long periods before they spoil.
B. Several European and North American manufacturers that use cocoa have recently improved their processing capacity.
C. It takes new cocoa trees five or six years before they start bearing fruit.
D. Governments in Europe and North America are likely to change current restrictions on cocoa imports.
E. Historically, cocoa production has varied widely from year to year.


CR51141.01
OG2020 NEW QUESTION

Supply shortages and signs of growing demand are driving cocoa prices upward. Unusually severe weather in cocoa-producing regions—too much rain in Brazil and too little in West Africa—has limited production. Further, Europe and North America recently reported stronger demand for cocoa. In the first quarter, grinding of cocoa beans—the first stage in processing cocoa for chocolate—rose 8.1 percent in Europe and 16 percent in North America. Analysts have concluded that cocoa's price will continue to rise at least into the near future.

Which of the following would, if true, most strengthen the reasoning above?

A. Ground cocoa beans can be stored for long periods before they spoil.
B. Several European and North American manufacturers that use cocoa have recently improved their processing capacity.
C. It takes new cocoa trees five or six years before they start bearing fruit.
D. Governments in Europe and North America are likely to change current restrictions on cocoa imports.
E. Historically, cocoa production has varied widely from year to year.

Hi PriyamRathor,

Thanks for the tag. I hope this answer can clear things up for you as this is a very common pattern in CR questions.

Whenever you get a CR question about economics, always break it down into Supply and Demand. This question predicts that cocoa prices will continue to rise. What has to be true for prices to rise? We need a mismatch between Supply and Demand - specifically, we need Demand to exceed Supply, so that the new equilibrium price will be higher.

So, what Evidence do we have about Supply and Demand? We have the backstory on Supply problems, and we have evidence for increasing Demand in the future.
You asked about this sentence: "In the first quarter, grinding of cocoa beans—the first stage in processing cocoa for chocolate—rose 8.1 percent in Europe and 16 percent in North America."
Why is that sentence there? It's not fluff. Fluff in CR questions is rare. The prompts are short and usually every piece of information is meaningful. If a sentence seems to be pointless in CR, I would highly suggest that you re-read it and see how it connects to the sentence before and/or sentence after. (That's an RC skill as well.)

Go ahead and re-read the prompt to see how that sentence connects to the sentences around it before you read the rest of my explanation ...

That sentence is evidence to supports the previous sentence about growing Demand in Europe and North America. (The big clue is that both Europe and North America are mentioned in both sentences.)

So we have information about the current mismatch between Supply and Demand, and information about the likely future of Demand (increasing). What is missing is information about the likely future of Supply. In quick-moving industries, what usually happens as soon as Demand increases? Supply will rise to meet it - and in that case, there may not be much of a price change. If we need to support the idea that prices will continue to rise, we need information that suggests Supply will not immediately increase in response to the Demand increase.

C is the only answer choice that does this. Structurally, it is exactly what we need - it suggests a reason that the industry can't rapidly react to this year's supply problems and massively increase supply next year. (Because in other industries, suppliers would massively increase their production as soon as possible, and prices would not dramatically increase.)

B is not the strongest choice because we already have data to support the idea that demand will continue to increase. We don't need more of that.

Again, this is a common pattern in CR questions that are based on economics, so it's a great concept to nail down as you learn from this question. It's worth your time to understand it.

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