Cocoa Trade

Author: Carmen | January 14, 2010 | Chocolate

Cocoa is a commodity like gold or pork bellies (no kidding). The trading of cocoa beans is mostly done at the commodity futures exchange in New York for the North American market, and in London for the European market. Cocoa futures are traded on the basis of the last harvest and the expectations for the next two years. "Futures" means that contracts are made early, prices are agreed before the cocoa is grown or harvested. If, say, the harvest is worse than expected, the price of cocoa will rise on the market, which means the seller in the previous contract made a bad deal selling it for a lower price, while the buyer made a good deal. Climatic, but also economic and political factors have a role in determining the cocoa price.

Since 2007, demand for cocoa has risen (are you surprised?), which led to quite an increase in price since then. The demand increase is attributed to a growing interest of Asian countries in chocolate, India in particular.
Maybe we should expand there next? ;)

Cocoa Futures Price Chart


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