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On July 16, 2010, the NYSE Euronext Liffe Cocoa Futures Contract (Exchange Contract No. 401) price increased to £2,732 per tonne (metric ton) as the result of acquisition of 241,000 metric tons of cocoa beans by a single trader (actual purchase cost was £658 million / 241,000 x £2,732 per tonne; contract size is 10 tonnes / metric tons; actual delivery was taken for storage at one or more of Liffe's warehouses in Amsterdam, Antwerp, Bremen, Felixstowe, Hamburg, Humberside, Le Havre, Liverpool, London, Rotterdam, or Teesside). Cocoa futures contracts prices have increased during 2010 as the result of a series of weak harvests in Ghana and the Ivory Coast, and the possibility of continued rain in the Ivory Coast (results in high moisture content). The previous day in the United States, the Washington, D.C.-based National Confectioners Association indicated that cocoa grind, an indication of cocoa bean demand, Increased 12.0% in the second quarter 2010 to 117,657 metric tons, compared to the same period in 2009, after having increased by 16.0% in the first quarter 2010 compared to the same period in the previous year. Media reports identified the trade being carried out by Armajaro Asset Management LLP, which manages the soft commodities Armajaro Commodity Funds and the CC+ Fund, and is one the major cocoa traders by volume within Europe.

On July 1, 2008, the IntercontinentalExchange cocoa contract settled at $3,360 per metric ton, a 28 year high. The price then declined during 2008 in response to the growing likelihood of a recession and also in relation to the general decline in all mjor commodity prices. The price began to increase again since November 2008 in response to reported tree disease problems in both the Ivory Coast and Ghana and in response to protests in the Ivory Coast over fertilizer price increases.


Cacao Cultivation

  • The "cacao" tree (Theobroma cacao) is strictly a tropical plant, thriving only in tropical climates. Cocoa cultivation began in the Pre-Columbian western hemisphere, from Mesoamerica Mayan Mexico, Guatemala and the Central America region to the upper Amazon Basin. Cacao was eventually spread all around the world by European traders.
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  • The cacao tree can grow to a height of approximately 50 feet, however plantation trees are usually pruned to a height of approximately 20 feet. The plant is usually first cultivated in the shade of larger trees during the first several years of growth. It takes four or five years after planting for the tree to yield cocoa beans, and from eight to ten years to achieve maximum production (production declines after 25 years of age).
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  • There are several species of cacao tree but all three are able to cross polinate without problem, thus a single tree may produce non-uniform shaped fruit that reflects this hybridization.
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  • The fruit of the cacao tree are pods, which are produced by the tree all year long, thus the growing season is continuous. The shape of the pod reflects the cross-pollination hybridization of the plantation trees:
  • Criollo (light color, soft thin-skinned pod; located primarily in Ecuador and Venezuela)
  • Forastero (thick-skinned pod; the majority of producing cacao trees around the world)
  • Trinitario (hybrid of the Criollo and Forastero species)
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  • The pods grow directly from the trunk and the lower, heavier branches of the cacao tree.
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  • When ripe, these pods are cut down and opened, and the beans (seeds of the pod fruit) are removed, naturally fermented by being piled up and covered. Once the beans have fermented and turned from a purplish color to a brown color they are then dried either by being laid out in the sun or in forced hot air containers.
  •     Click on image to view larger photo Click on image to view larger photo


    Producing Nations

    The Cote d'Ivoire (Ivory Coast) is the world's leading cocoa producing nation. Ghana , Indonesia, and Brazil rank next among major world producers, followed by Malaysia, and Nigeria. Cocoa is also produced in Belize, Colombia, Costa Rica, Dominican Republic, Ecuador (the Arriba variety), Grenada, Guatemala, Haiti, Honduras, Jamaica, Martinique, Mexico (Chiapas and Tabasco), Panama, St. Lucia, Trinidad and a small amount is produced in Venezuela (in the northern Caribbean region near the village of Chuao, Sur del Lago and the Carenero and Barlovento region in Miranda State).

    The Cote d'Ivoire (Ivory Coast) produced approximately 38% of total world cacao during the 2005/2006, 2006/2007, and the 2007/2008 growing seasons (source: ICCO). Cacao tree are grown by small farmers, approximately 750,000 to one million, with each farm producing approximately 1 to 1.5 metric tons per annum. Cote d'Ivoire production is forecasted at approximately 1.3 million metric tons in 2010 / 2011 season compared to just less than 1.2 million metric ton in the 2009 / 2010 season.

    Political instability affects the harvest and shipment of cacao from the nation. The Cote d'Ivoire experienced a civil war in 2002 to 2003, which was settled by the Lome Agreement and the Linas-Marcoussis Agreement. These and other negotiations were supposed to lead to national elections, however they were postponed year-after-year until 2010. After elections in October 2010, and a run-off election on November 28, 2010, the administration of incumbent president Laurent Gbagbo (Ivorian Popular Front) ignored the outcome of the voting, which indicated that opponent Alassane Ouattara had won, and refused to vacate the office. The African Union, Economic Community of West African States, and the U.N. General Assembly have recognized Mr. Ouattara as the victor.



    Cacao / Cocoa Processing

     
  • The dried beans are fairly stable and can be bagged and shipped.
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  • The dried beans are not a usuable product: they first must be roasted. Roasting is conducted at various heat levels and durations depending on the characteristic of the beans (or a blend of beans from several different sources).
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  • The beans are further processed by removing a thin shell and grinding the meat of the bean. The cocoa butter, a natural fat present in the bean, liquifies during this grinding process and is extracted from the beans. This extraction is known as Chocolate Liquour, an unsweetened pure chocolate that is poured into square molds and allowed to solidify.
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  • The cocoa butter / chocolate liquor is used in a number of products, ranging from cosmetics to pharmaceuticals, but its main use is in the manufacture of chocolate candy.
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  • Cocoa to be used in baking products, beverages, or to be reconstituted later as hot cocoa results from the solidified chocolate liquor being pressed to remove a portion of the cocoa butter.
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  • Chocolate destined for consumption in the form of an edible bar or candy results from additional cocoa butter being added to the solidifed chocolate liquor (along with sugar and other ingredients such as powdered milk, emulsifiers, vanilla). The percentage of the amount of cocoa compared to the total ingredients of an edible chocolate bar or candy can range from 20% to 70%. The higher the amount of coca the darker (bittersweet) the edible chocolate confection.
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  • Edible chocolate goes through an additional processing of "Conching", which is a process of kneading and aeration of the cocoa, additional cocoa butter and other ingredients by machine for either several hours or several days in order to fully integrate the ingredients and improve the texture of the finished product.
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  • Edible chocolate also goes through a final process of Tempering: the heating, cooling and reheating of chocolate to give a uniformity and stabilization to the product.
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  • Chocolate can also be prepared and shipped in liquid form for inclusion in the manufacturing process of other food products.
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  • Cocoa is consumed predominantly in countries of relatively high income. The leading cocoa importing nations currently are the United States, Germany and the Netherlands. These countries accounted for about 50.5% of world imports. The U.S. is the leading importer of cocoa products such as cocoa butter, liquor and powder, accounting for 28% of world imports in a given year.
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  • The supply of cocoa is affected by weather conditions, disease that affects the health of the cacao trees,insects, crop care and harvesting practices. Historically, weather has played a major role in determining world supply, especially when La Niña weather conditions affect Western Africa. Cacao cultivation also requires substantial spraying of pesticides as the trees are very susceptible to pest infestation. A new grade of cacao is being marketed as "organic", which indicates it is cultivated without the use of pesticides and is also shade grown.
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  • Annual cocoa crop yield is also affected to a large extent by political and economic conditions in the producing nations. The Cote d'Ivoire (Ivory Coast) is still the world's leading cocoa producing nation (approximately 40% of total world production), however the past several years of civil strife has severely reduced production.
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  • Cocoa exchanges for determining price exist in New York (NYBOT), London (Euronext.liffe), Amsterdam and Hamburg.
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  • From time to time, the International Cocoa Organization (ICCO) forges agreements intended to support prices. The ICCO purchases large quantities of cocoa and stores it, pushing market prices upward. When the ICCO fails to buoy prices, the market often drops precipitously.


  • Chocolate Manufacturers

    The largest corporate producers of chocolate and chocolate-related products are Mars, Hershey (includes Scharffen Berger Chocolate Maker Inc., Joseph Schmidt Confections Inc. and Dagoba Organic Chocolate), Cadbury Schweppes, Nestlé, Callebaut, E. Guittard, Kraft Foods.

    Cocoa cultivation and production around the world may increase in the future due to the recent increase of demand for high quality, single source / single origin dark, bittersweet chocolate (70% cacao or more) related to research that indicates some healthful benefits of consuming high cacao content / dark chocolate:

  • Bittersweet chocolate (70% cacao or more) contains flavinoid antioxidants.
  • Another study indicates that chocolate consumption also releases serotonin, which functions like an anti-depressant.
  • A study in the Archives of Internal Medicine, published by the American Medical Association, determined that participants that consumed cocoa products (hot cocoa, dark chocolate) experienced a drop in blood pressure that would suggest it would be beneficial to include these products in diets in order to reduce the risk of strokes and heart attack. The key ingredient identified in this study are polyphenols (present in most fruits, vegetables and tea and already identified as beneficial for those persons that may already suffer from cardiovascular disease) and the form in cacao are procyanids.
  • A similar study conducted by the Departments of Pharmacology and Internal Medicine, University Hospital of Cologne, Cologne, Germany, and published in JAMA (Journal of the American Medical Association), indicated that the regular intake of small quantities of cocoa (in this case in small 6.3 gram squares of dark chocolate) reduces blood pressure, again due to the action of the cocoa polyphenols. (Effects of Low Habitual Cocoa Intake on Blood Pressure and Bioactive Nitric Oxide; JAMA. 2007;298:49-60)   http://jama.ama-assn.org/cgi/content/short/298/1/49
  • However, chocolate consumption is not entirely without problems:

  • If you are on a diet and measuring calorie content then dark chocolate is a food that should still be eaten in moderation. The calorie content of chocolate is high and the corresponding calories from Fat is high. The fat content of natural cocoa butter is high. Sometimes, additives such as oils (palm oil, coconut oil) are substituted/added, which are also high in fat content.
  • Emulsifiers are used in the preparation of some brands, for instance soy lecithin. Vanilla may be added for flavor.
  • Some companies also add refined sugar to the preparation process or evaporated cane juice (sugar).
  • Chocolate does contain naturally occurring caffiene.
  • When ccocoa prices increase, manufacturers usually do two things to compensate for the price increase: shift to upscale brands to obtain a higher premium price, or substitute vegetable oil for cocoa butter.

    Chocolate melts right around human body temperature, which is why if you hold some between 2 fingers it begins to melt (and it is even quicker when placed in one's mouth). Chocolate can be melted on the stove top for cooking purposes. The best method is to use a double boiler with the water barely simmering. The chocolate must be stirred for even melting and to ensure that it does not scorch. During this process, it is important that one does not allow any water or steam to fall into the chocolate because if it does get even a drop of water then it will stiffen (also referred to a seizing) and will then be useless for your recipe. Chocolate can also be melted in the microwave but must be done in increments and removed and stirred to avoid scorching.

    High quality, high cacao content chocolates on the market include:

  • Alprose Dark Chocolate 74%
  • Amano Artisan Chocolate Occumare 70%, Madagascar 70%, Cuyagua 70%, Dos Rios 70%, Jembrana 70%, Guayas 70%, Montanya Limited Edition 70%
  • Amdei Toscano Black 63%, 66% and 70%
  • Askinoise San Jose Del Tambo 70%, Soconusco 75%, El Rústico Chocolate Bar, Davao Dark Chocolate Bar 77%
  • Barry Callebaut 3x4 Dark Chocolate 62%
  • Chuao
  • Claudio Corallo Chocolate
  • Côte D'Or Dark Chocolate 86% and 70%
  • Dagoba Organic Dark Chocolate 59%, Conacado 73%, New Moon 74%
  • Divine Darkly Divine Chocolate 70%
  • Dove Dark Chocolate
  • E. Guittard
  • El Rey (Apamate / 73.5%, Gran Saman / 70%, Mijao / 61%, Bucare / 58.5%)
  • Endangered Species Chocolate
  • Frey Suisse Dark Chocolate
  • Ghiradelli
  • Giraudi
  • Green and Black's Organic Dark Chocolate 70% and 85%
  • Grenada Chocolate Company
  • Hawaiian Vintage Chocolate
  • Hershey's Extra Dark, Special Dark; Cacao Reserve Sao Tomé Dark Chocolate 70%, Cacao Reserve Dark Chocolate with Cacao Nibs 65%, Cacao Reserve Arriba Dark Milk Chocolate 50%, Cacao Reserve Premium Milk Chocolate 35%
  • Jacquae Grand Cru 72%
  • Lindt 70%
  • Nestle Treasures
  • Noka Vintage Dark Chocolate
  • Patric Chocolate Madagascar Sambirano Valley 67%, 70% and 75%, Rio Caribe Superior 70%
  • Rapunzel
  • Santander
  • Sarotti No. 1 Edelbitter 72% and 85%
  • Scharffen Berger Bittersweet Chocolate 82% and 70%
  • Seeds of Change
  • Taza Stone Ground Organic Chocolate 60%, 70% and 80%
  • Tcho Ghana Panama Ecuadoe 75%
  • Terra Nostra Organic Intense Dark Chocolate 73%
  • Valrhona Palmira Plantation / 64%, Gran Couva Plantation / 64%, Organic Dark Chocolate / 70%, Abinao / 85%
  • Xocai (is actually a chocolate-based product, which is blended with juice from the acai berry in a drinkable form or is combined with omega-3 acids in a bar form)


  • Cocoa Commodity Market Information & Research Resources

    Cocoa Producers Alliance (COPAL)   www.copal-cpa.org/

    Federation of Cocoa Commerce (Fédération du Commerce des Cacaos)   www.cocoafederation.com/

    International Cocoa Organization (ICCO)   www.icco.org/

     



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