To view more information please go to Reports
Sucden is a leading and established player in the London and New York cocoa futures and options markets. The market continues to recognise active trading despite the unstable social, political and economic issues prevalent in a number of the most dominant crop regions. The intricate world of the cocoa physical market means that we are constantly looking to expand our knowledge base and refine our understanding of the commodity to extend a service to our clients that is second to none. Moreover, Sucden offers a comprehensive broking service, incorporating fundamental and technical expertise drawing on the experience of our established trading team.
Our Offering:
Sucden is at the forefront of cocoa futures trading and has established expertise in the market.
- Sucden is a driving force in the foremost Cocoa exchanges, Liffe and ICE Futures U.S, providing a wide range of statistical and research based data that complements the technically driven aspects of the market.
- We deliver a professional and efficient service to a global marketplace. This is backed by our diverse client base, which allows us to gain a broader appreciation of the cocoa market.
- With access to a variety of processors, trade, fund and smaller speculative traders, we offer a service that is tailored to the needs of our clients.
BACKGROUND TO THE COCOA MARKET
To view contract specifications
History and origins
Cocoa is thought to have been cultivated as a crop initially by the Maya, in South America, where cocoa played a large part in the religious, social and medicinal aspects of life. It was reportedly still being used as a form of currency until the 1840's. The recipe for 'Chocolat', which is literally translated as "warm beverage", was introduced into Europe by the Spanish conquistador Cortes during the 16th century. This led to Europeans adding such sweeteners as sugar and cinnamon to the drink and as its popularity grew, chocolate houses appeared alongside coffee houses throughout the 17th and 18th centuries. Consumption in the UK doubled from 250 to 500 tonnes during the 1920s. In 1828, Coenraad van Houten invented a method of pressing the fat out of the cocoa bean yielding cocoa powder and cocoa butter. This allowed the manufacture of chocolate, by mixing the cocoa mass, sugar, and cocoa butter (and also milk, in the case of milk chocolate). Van Houten also invented alkalisation, which not only neutralised unpleasant tasting acids, but also improved colour and solubility. The use of cocoa in the food manufacturing business today is widespread. Cocoa butter is utilised in the production of chocolate and cosmetics; cocoa powder is used for baking, beverages and coatings; and shell and residue for animal feedstuffs.
Production
Cocoa originates from the genus Theobroma, a group of small trees native to the Amazon basin and other tropical areas of South and Central America.
|
 |
|
|
Click here to view a sample cocoa report
Cocoa is now grown throughout the world, especially in Africa (Ivory Coast, Ghana, and Nigeria), Asia (Indonesia, Malaysia), Central and South America (Brazil), and the Caribbean.
Production levels are largely dependent on the cultivation policies of producing countries, as well as weather conditions and prices. A cocoa tree takes five to seven years to reach its full production capacity from planting. Cocoa products are made from the beans, or kernels of the cocoa fruit. There are approximately 40 seeds, or beans, to each fruit. The beans grow all year round, with thousands of small flowers, of which only 20 to 40 actually develop into fruit. Once harvested, the cocoa beans are fermented and dried. At the factory, they are cleaned, blended, and fragmented. A winnowing machine is used to remove the shells from the beans leaving cocoa nibs, which are alkalised before, during or after roasting. The fat is pressed out leaving cocoa butter and presscake - discs of fine cocoa powder.
Consumption
Consumption is generally measured in terms of grindings. World wide consumption said to be approaching three million tonnes. Cocoa is consumed predominantly in countries of relatively high income. Currently, the leading cocoa bean importing nations are the Netherlands, United States and Germany. The US is the leading importer of cocoa products such as cocoa butter, liquor and powder.
Cocoa trading
Cocoa beans are traded in tonnes, between producers, exporters, importers, trade houses, processors and manufacturers. The International Cocoa Organisation (ICCO) was set up to encourage price stability in a historically and potentially volatile marketplace. During the 1980s a buffer stock management scheme was set up to purchase cocoa in order to stem the rate of price decline. The buffer stock management scheme was not deemed to be a great success and the ICCO has now liquidated its stocks. Markets are growing as Eastern European and CIS economies in particular, start to invest in industry and manufacturing.
Futures trading
There are two main futures markets for cocoa - the London International Financial Futures and Options Exchange (Liffe), and ICE Futures U.S. in New York. The contracts are guaranteed by London Clearing House Clearnet (LCH.Clearnet) and the Commodity Futures Clearing Corporation of New York respectively. The two contracts demonstrate a strong correlation but still offer arbitrage possibilities. Both the Liffe and ICE Futures contracts are long established and represent a high proportion of trade participation. Trade houses, importers and speculators also play an important role in the futures and options market, adding to liquidity and aiding in the price discovery process. The contract in London is traded in pounds sterling per metric tonne of fermented cocoa, in bags (or in bulk from May 2000), and from a number of origins, with discounts applied to some. Since November 2000 the Liffe contract has been traded exclusively on the LIFFE CONNECT® trading system. Over 80% of world production is now deliverable against the Liffe contract. The contract in New York is traded in dollars per metric tonne of beans of any origin, so long as they meet import standards. ICE Futures U.S. has set premiums for different origins of cocoa.
|
|
|