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Trading and Shipping cocoa beans. When discussing cocoa trading, a clear distinction has to be made between the actual or physical markets and the futures or terminal markets. Nearly all cocoa coming from origin countries is sold through the physical market.
ECOM is one of the world’s largest cocoa traders and processors, sourcing quality beans from over 25 countries and selling them directly to customers or processing them into cocoa mass, butter, cake and powder. We have 4 cocoa trade offices, 6 factories and 2 exclusive off-take agreements with partner factories.
- What Is Cocoa Trading?
- History of Cocoa Trading
- How to Trade Cocoa
- Pros of Cocoa Trading
- Cons of Cocoa Trading
- Cocoa Trading Strategies
- How to Start Cocoa Trading
- Cocoa Trading Hours
- Final Word on Cocoa Trading
- FAQs
The cocoa bean is a soft commodity. Before understanding how it is traded on the financial markets, it is important to understand what this means. A soft commodity is a natural resource that is grown or produced, whereas a hard commodity needs to be extracted from the earth like gold or silver. These raw materials are used in the production of cons...
An Aztec document dating back to the 1540s represents the first evidence of cocoa beans being used as a currency with one tomato equalling 1 cocoa bean.The 1600s sees cocoa powder trading increase across Europe as more drinking products are produced.In 1795 steam engines are used to grind cocoa beans, which creates significant production efficiencies. As part of the industrial revolution, the cocoa trading industry booms and many cocoa compani...Coenraad Van Houten develops chocolate powder in 1828 by designing the cocoa press, which creates butter from squeezing roasted beans.Futures
Futuresare the most popular cocoa asset to trade and are available for cocoa beans, cocoa butter and cocoa powder. Futures are contracts where the trader agrees to buy a set amount of an asset (in this case cocoa) at a set price in the future. Despite being a global commodity, only a few exchanges offer cocoa futures, such as the New York Mercantile Exchange (NYMEX), which is part of the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE). Cocoa trading contracts are als...
Options
Cocoa trading of optionscontracts is offered by both the CME and ICE. With these contracts, the trader pays a premium for the option (not the obligation) to exercise and purchase the asset in the future. Both exchanges offer options on their physically delivered cocoa futures contract. Options are either calls or puts, where the former are purchased if a trader believes the cocoa trading price will rise and vice versa.
Shares
Investors can also access the global cocoa market by trading sharesof cocoa-producing companies such as Lindt and Nestle, both based in Switzerland. Access to shares of these companies is straightforward and available to access with most brokers. The share price of such companies has a strong association with the cocoa trading price of the commodity. Some of the largest cocoa traders such as Olam, Dietz and Ecom are not public, so, despite their heavy influence on cocoa trading, they are not...
Asset Availability – Available to trade with many brokersRange Of Tradable Instruments – Many different cocoa asset types can be traded, such as futures, options, CFDs and ETFsHigh Volatility – Cocoa is volatile by nature in both the short and the long term, which makes it an attractive proposition for both position and day tradersTrade With Leverage– Investors can increase the sizes of their cocoa trades using leverage. This permits traders to execute larger positions than would be possible with their own funds. The rewards...Complex Assets– Some cocoa assets are not straightforward, which could deter newer investorsUnavailability Of Key Players – Purchasing shares of large cocoa-producing companies can be a strong way into the market, however, many large cocoa trading companies are not publically available to...External Factor Influence – Cocoa commodity trading can be heavily influenced by external factors on crop supply, such as the weather and political unrest. Changes in the supply of cocoa beans dire...Since this commodity is a popular commodity to trade, strategies used for other asset classes can be employed for cocoa trading. The value of the bean can be volatile with large intraday swings, all whilst holding a long-term trend over months, these characteristics make it suitable for both day and position traders. The type of strategy chosen wil...
Choose A Cocoa Asset To Trade
There are many types of cocoa assets to trade, the most common of which are futures contracts. Cocoa assets have a varying level of complexity, with purchasing shares of cocoa trading companies the most straightforward. Whether you want to own the underlying asset or not will also determine which instrument you choose. It is essential that traders fully understand the asset before they invest, especially if leverage is involved.
Choose A Broker
Once you have chosen the asset you wish you trade, you need to choose a broker. Most brokers will offer cocoa assets, including eToro and Plus500. Some will specialise in particular asset types, for example, IGconcentrates on leveraged CFDs and spread betting, whereas Plus500 provides a CFD trading platform with risk management tools. Several other factors should be considered when choosing a broker. Some can charge large fees for depositing and withdrawing funds, which can reduce profits. It...
Open A Trading Account
Once you have chosen your cocoa trading broker, it is time to sign up for an account. Requirements to open an account will vary amongst brokers, so check for minimum deposit limits or identification checks. Most brokers offer a demo account, where no funds are required, allowing traders to practise before committing real capital. Some brokers will also offer deposit bonuses, so be sure to capitalise on those if available.
Cocoa trading hours will depend on the market and the asset being traded. The ICE cocoa trading hours are as follows: 1. London: 09:45 – 18:30 GMT 2. New York: 04:45 – 13:30 GMT 3. Singapore: 17:45 – 02:30 GMT
Cocoa trading is an attractive proposition to speculators of all types owing to its volatility both in the short and long term. Additionally, there is a wide range of cocoa instruments available and easily accessible with many brokers, which is attractive to investors that are looking to diversify their portfolios. Follow our step-by-step guide abo...
Why Is The Cocoa Trading Price So Volatile?
The price of cocoa is reliant on the supply to global producers of cocoa-based products. External influences that can affect the supply (and therefore price) include climate change, geopolitical instability, public perception and sustainability.
What Cocoa Trading Assets Are Available?
Cocoa trading assets include futures, options, CFDs, stocks and ETFs. Cocoa futures are the most common asset to trade and are generally considered the benchmark. However, all commodity assets offer portfolio diversification opportunities.
What Are The Best Brokers For Cocoa Trading?
The best brokers for cocoa trading are dependent on the instrument and strategy chosen. Brokers should be transparent regarding any fees, trading platforms, demo accounts and regulation by a reputable financial body.
6 de abr. de 2022 · Cocoa is traded through a various financial instruments. In this guide, we’ll explain the various instruments traders have to speculate on the price of cocoa, including which brokers offer related futures, stocks, and derivatives.
- There are many reasons to expect cocoa demand to grow strongly in the years and decades ahead.
- Cocoa traders should also consider the risks involved in investing:
- The New York Mercantile Exchange (NYMEX), which is part of the Chicago Mercantile Exchange (CME), and the Intercontinental Exchange (ICE) offer a c...
- Both the CME and ICE offer an options contract on cocoa futures. The CME contracts are options on the physically delivered cocoa futures contract t...
- These financial instruments trade as shares on exchanges in the same way that stocks do. There are two ETFs that invest in cocoa futures:
- There are no pure-play global public companies engaged in the production and sale of cocoa.
In 2019, global cocoa exports were valued at approximately $6.5 billion, with over 4 million tons of cocoa beans exported from producing countries to importing countries worldwide. The top cocoa bean exporting countries include Cote d’Ivoire, Ghana, Ecuador, Nigeria, and Cameroon.
In 2022, Cocoa Beans were the world's 423rd most traded product, with a total trade of $8.29B. Between 2021 and 2022 the exports of Cocoa Beans decreased by -20.3%, from $10.4B to $8.29B. Trade in Cocoa Beans represent 0.035% of total world trade.
KANY Corp. is a family-owned international cocoa trading company, which specializes in the supply of premium cocoa beans and semi-finished cocoa products for the global chocolate and confectionery markets.
