Investing in Cocoa Futures Contracts - dummies

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.

Top Cocoa Producers
Country Production (Thousands of Tons)
Ivory Coast 1,350
Ghana 670
Indonesia 445
Nigeria 170
Brazil 160
Cameroon 160

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: