Cocoa Trading

Chocolate is enjoyed in countless forms the world over, meaning more than three million tons of cocoa beans are consumed annually. Cocoa has been cultivated for centuries (read more) and is a commodity upon which more than 20 million people directly depend on for their livelihood. Furthermore, consumption of cocoa products is on the rise.

Redstone Commodity Search work closely with Trading Houses, Merchants, Food Producers, Investment Banks and Hedge Funds within the global cocoa markets. Because of our strong understanding of the international cocoa industry, our soft commodities team is able to provide executive search solutions across the globe including Africa, Asia, Europe, USA and LATAM.

Recent hires our agriculture team has been responsible for included:

  • Head of Cocoa Trading, UK
  • Senior Cocoa Trader, US
  • Cocoa Trader, Indonesia
  • Cocoa Purchasing Manager, Switzerland
  • Soft Commodity Marketing Analyst (Cocoa, Coffee, Sugar), Singapore

Cocoa Beans

Three main varieties make up the world’s production of cocoa beans: Forastero (about 90%), Criollo (less than 3%), and Trinitario (about 12%). Typically, cacao trees grow in a zone 20° to the north and south of the equator with the majority of the world crop being grown in West Africa.

The beans grow inside pods on the cacao tree. These pods are cut down, typically with machetes, and the beans extracted to be fermented which allows the chocolate flavour to develop. Following this stage, the beans are spread out to dry and are cleaned.

Sacks of unprocessed beans are sold to grinding companies which crush the beans, remove the shells (leaving the nib), roast and grind them. The result is cocoa liquor.

Semi-manufactured Products

  • Cocoa liquor / paste (cocoa particles suspended in cocoa butter) – product of milling cocoa nibs. Used in chocolate manufacturing with other ingredients.
  • Cocoa butter – used in the manufacture of chocolate and in cosmetic products.
  • Cocoa press cake – product of pressing cocoa liquor. The product which is left after the cocoa butter has been extracted.
  • Cocoa powder (solids) – used as an ingredient in foodstuffs from flavoured drinks to desserts, cakes and biscuits.

How is Cocoa Traded?

Once the beans have been processed and dried into merchantable cocoa, they are sold by farmers to traders, transported to grinders who make semi-manufactured products. Primary growing regions are Africa, Asia, Latin America and most are grown by small, family-run farms. Approximately 95% of beans are produced on smallholdings under four hectares. Countries which produce the most cocoa include the Ivory Coast, Ghana, Indonesia, Nigeria, Cameroon, Brazil, Ecuador, and Nigeria.

Approximately 90% of cocoa production is exported in the form of beans or semi-manufactured cocoa products. The Netherlands is the largest cocoa processing country by volume while Europe holds 40% of the processing market. The USA and Europe are the largest importers of cocoa and cocoa products.

Beans are traditionally exported in jute bags but in recent years they are increasingly shipped in ‘mega-bulk’ parcels on ships or in containers.

Similarly to sugar and coffee, cocoa is also traded in futures contracts on many exchanges in order to manage price risk for consumers and for producers to secure selling or purchase prices.

Who are the Customers?

  • Animal feed manufacturers (husk of pods)
  • Chocolate manufacturers
  • Cosmetics industry
  • Food manufacturers
  • Processors – grinding beans

 

More Information:

Live cocoa trade prices

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