Investing in Cocoa Futures Contracts
Cocoa trade is dominated by African countries, although the first cacao tree is said to have originated in South America. Cocoa is a fermented seed from the cacao tree, which is usually grown in hot and rainy regions around the equator.
|Country||Production (Thousands of Tons)|
Source: International Cocoa Organization, 2006 figures
The New York Board of Trade (NYBOT) offers a futures contract for cocoa. Here is some useful information regarding this cocoa futures contract, which is the most liquid in the market:
Contract ticker symbol: CC
Contract size: 10 metric tons
Underlying commodity: Generic cocoa beans
Price fluctuation: $1.0/ton ($10.00 per contract)
Trading months: March, May, July, September, December
Like coffee, the cocoa market is subject to seasonal and cyclical factors that have a large impact on price movements, which can be pretty volatile.
For more details on the cocoa market and the companies that control it, you can check out these resources on the Web: