COCOA

Cocoa History

Cocoa, popularly known for producing chocolate, is a highly traded commodity. Cocoa was used by ancient tribes as early as 600AD and exported to Europe in 1585, and it has a rich and interesting history. Today, it attracts investors almost as much as chocolate lovers, with the cocoa market reportedly worth more than $2.1B (USD).

What are the different cocoa varieties?

Cocoa varieties are three, with the most common type being Forastero which accounts for roughly 80% of production. The other two types of cocoa are Criollo, the rarest variety, and the Trinitario, a hybrid cocoa bean that ranges between average and superior quality. If the quality of the bean is high, it means it has better taste and a higher market price.

Which are the top cocoa-producing countries?

There are three top cocoa producers: West African countries like Cote d’Ivoire (Ivory Coast), Ghana, and Latin American countries like Brazil and Ecuador. The most responsible for the majority of cocoa production globally is West Africa.

What can move the price of cocoa?

The price of cocoa can be affected by factors such as changing weather conditions, distribution costs, geopolitics, global health issues and the strength of the US dollar. Also, the price of cocoa is moved by factors that relate to supply and demand.

Cocoa News

Cocoa futures traded around $2500 (USD) an ounce as traders weighed expectations of lower global demand against supply constraints. The Russian invasion of Ukraine will probably decrease the consumption of goods like chocolate and coffee as there will be restrictions on travel and airports where most of the sales occur. This follows a time when the demand for chocolate and coffee is still recovering from the COVID-19 pandemic. Additionally, farmers worry that the continuous lack of rains in the top growing regions of the Ivory Coast will damage the quality of beans and could reduce the size of the April-to-September mid-crop.