Cocoa Price

 

Quick Overview of Cocoa

✔️Explanation of cocoa ✔️History of cocoa ✔️Production cycle of cocoa - turning cacao into cocoa How to trade cocoa Factors affecting the cocoa price Main uses of cocoa  

Explanation of cocoa

The cacao tree was given the scientific name Theobroma cacao by Carolus Linnaeus in 1753. Theobroma is the Greek for ‘food of the gods’ (Theo = god and broma = food) and cacao is an adaptation of the Mayan word kakaw, describing the tree and its seeds, by the Spanish who colonised Mesoamerica in 1519. Noteworthy:

• Carolus Linnaeus (1707 - 1778) was a Swedish doctor, scientist, and professor of botany. He is also referred to as the ‘father of taxonomy,’ which is a system that was created by him in which each species of plant and animal is given a scientific (biological) name. The system is called the binomial system. He was knighted in 1758, changing his name to Carl von Linné.
• The Maya Empire was located in the tropical lowlands of what is currently known as the country Guatemala. The Maya people were one of the most dominant civilisations of Mesoamerica.
• Mesoamerica refers to the region of Mexico and Central America before it was conquered and colonised by Spain in the sixteenth century.
• Aztec refers to an Indigenous Mexican and Nahuatl speaking people who ruled a large region - what is currently called central and southern Mexico - in the 15th and early 16th centuries. The Aztec supremacy ended with the invasion of the Spaniard Hernán Cortéz and his followers.

  Is it cacao or cocoa? The way the two terms, ‘cacao’ and ‘cocoa,’ is used can be a little confusing. At times they are used interchangeably. Is there actually any difference between the two terms? The Chocolate Company Lindt describes cacao and cocoa as follows: ‘Cacao refers to the raw material: the cacao beans that are harvested from the cacao tree. Cocoa is created after the beans are finely ground into a powder and roasted and can be consumed as a drink or blended with sugar, milk, cocoa butter, and cacao to make chocolate.’ (Accentuations are by the article writer.) Hence, there is a distinct difference between cacao and cocoa: it depends on the stage of processing. Furthermore, the term ‘chocolate’ refers to anything that is made or produced from the seeds (beans) of the cacao tree. According to etymologists, the word ‘chocolate derives from the Aztec word ‘xocoati,’ indicating a bitter drink brewed from cacao beans. The cacao tree is indigenous to the Amazon and Orinoco River basin in South America, which flows from Columbia through Venezuela to the Atlantic Ocean. It is an elegant tree that grows in tropical regions within about 20 degrees of the equator and up to 600 metres above sea level. The Theobroma cacao thrives in hot (preferring a consistent temperature between 25 - 27° Celsius), and humid regions and requires regular rainfall between 1 250 and 2 500 mm per year. Farmers and growers of cacao trees typically use two methods to plant them:

• They remove old unproductive cacao plants, placing young trees between the productive older, mature plants.
• They plant young trees between and beneath other trees like banana, coconut, papaya, mango, and rubber trees.

The reason for these methods is that cacao trees need protection from too much light and strong winds. Cacao trees also need humus-rich and well-draining soil. Cacao trees are widely distributed around the world, from south-eastern Mexico to the Amazon River in South America, including South American countries such as Brazil, Ecuador, and Peru. They also occur in the Central American country, the Dominican Republic, as well as in Indonesia in Southeast Asia. In West Africa, they can be found in Ghana, Côte d’ Ivoire, Nigeria, and Cameroon.   There are more than ten varieties of the cacao tree, commonly referred to as the chocolate tree, but the three widely known varieties are:

• Forastero

Forastero, meaning ‘stranger’ in Spanish, is the most commonly grown variety of the cacao plant. It is primarily grown in West Africa, and in the South American countries, Ecuador, and Brazil. Forastero beans contribute approximately 80 percent of the global cocoa supply. It is much harder than the other varieties and less susceptible to diseases. It provides a significantly higher yield than the Criollo variety. Features of the Forastero variety are, amongst others: a bitter taste that has a short duration and is unsupported by additional flavours. They are purple-coloured. The variety comprises several subspecies such as Calabacillo, Cundeamor, and Amelonado, which is the most comprehensively planted cacao of all.

• Criollo

Criollo is a rare variety of the cacao plant and is regarded as ‘the prince of cacaos.’ It only provides 5 percent of the world's production. It is a variety that is extremely difficult to grow due to its vulnerability to several environmental threats. It is grown in the Caribbean Islands, Central and South America, and Sri Lanka, an island southeast of India, in the Indian Ocean. Criollo is considered an important ingredient in the very finest of chocolates. Characteristics of the Criollo variety include beans that have a white to pale pink colour, and a delicate, refined, but complex taste that is low in classic chocolate flavour.

• Trinitario

Trinitario is a hybrid of the Criollo and Forastero varieties, taking the best qualities from both: the resistance to diseases, hardiness, a high yield from Forastero, and the fine flavours and aromas from Criollo. It originates from Trinidad, a small island off the north-eastern coast of Venezuela. The existence of Trinitario is ascribed to the following occurrence: A hurricane completely destroyed the Criollo crops in Trinidad in 1727. The farmers decided to replant the cacao plantations with Forastero cacao plants. The result was that a hybrid of the two varieties spontaneously appeared, which was called ‘Trinitario,’ meaning native of Trinidad, indicating its Indigenous origin. Trinitario is still grown in Trinidad, but it is also cultivated in numerous countries all over the world, namely Mexico, Venezuela, Ecuador, Colombia, Sri Lanka, Cameroon, and parts of Southeast Asia. The pods of Trinitario plants are typically different in length (long or short) and colour (red and yellow), due to Trinitario’s origin as a hybrid. Although grown and harvested all over the globe, Trinitario only contributes between 5 and 12 percent of the global production of the commodity.   Interesting facts about the cacao tree:

• The cacao tree can reach a height of approximately 9 metres (almost 30 feet).
• A mature cacao tree can produce about 250 000 flowers per year. Depending on the variety, the flowers can be white, yellow, pink, rosy, or bright red. The tiny flowers - about 1-2 cm (a half-inch) in diameter - grow directly from the trunk of the tree or off large branches.

Cacao flowers cannot self-pollinate and can only be pollinated by insects, particularly tiny flies, also called midges. However, only about 10 to 20 percent of the flowers produced by a cacao tree are successfully pollinated. Based on research, of the total number of pollinated flowers, less than 5% develop into mature fruit (Groenewald, et al., 2010).

• It takes a cacao tree approximately five years to produce its first fruit, called a cacao pod. The peak growing period for cacao is ten years, although, for some trees, the growing period can be decades.
• A cacao pod (fruit) has the following characteristics:
• It has a hard shell, about the same size and shape as a papaya, and is typically orange, yellow, red, or reddish-orange. Some people describe the appearance of a cacao pod as that of a bloated cucumber.
• Cacao pods take four to five months to grow, and an additional number of weeks to ripen.
• The size of a full-grown pod can range from approximately 15 cm to over 35 cm in length.
• A cacao pod carries roughly 20 to 70 cacao beans, which are sour and are actually the seeds of the cacao tree. Each of the seeds is 1 to 3 cm long.
• The fruits (pods) of a cacao tree grow directly from its trunk or large branches.
• The beans in the pod are embedded in a white pulp, which is edible, with a flavour that reminds of a lemon-flavoured mango. It requires hundreds of processed cocoa beans to produce one kilogram of chocolate.
• The leaves of the cacao tree are over 15 centimetres (6 inches) long.
• The cacao tree is classified as a deciduous tree, implying that it loses its leaves annually.

 

History of cocoa

The cacao plant and its fruit have a long and fascinating history. Scientists and historians debate how far back humans have started to use and consume cacao beans. Some say at least 3 000 years, others claim at least 2 000 years, and others are convinced that it might go back four millennia. An interesting fact is that for about 90 percent of the long history of chocolate, it was strictly used as a beverage, without any sugar included. The following snippets serve as illustrations of the interesting history of the ‘food of gods.’

• Around 1500 B.C. the Mayas worshipped the cacao tree and used a drink made from cacao beans in their religious rituals. They also used the beans as currency. For instance, 100 cacao beans could buy a good turkey hen.
• Cocoa Box mentions that ‘when the first Spanish explorers landed onshore in South America, chocolate didn’t suit their tastebuds - described as “a bitter drink for pigs” but once mixed with honey or cane sugar, it quickly became popular.’
• Hernán Cortéz and his followers brought cacao beans to Spain in 1528.
• Chocolate was a fashionable drink for royalty and rich people in Europe throughout the 18th century.
• However, the Industrial Revolution in the eighteenth century in Europe allowed chocolate to be mass-produced, bringing the drink to the ordinary people.
• During the American Revolutionary War (1775 - 1783), chocolate was included in soldiers’ rations and was so valued that it was used as wages.

 

The production cycle of cocoa - turning cacao into cocoa

As already mentioned, the difference between cacao and cocoa depends on the stage of processing. The cacao beans in their raw form go through certain processes to eventually become the product that is described as cocoa. Simply put, the object of the production cycle is to turn cacao into cocoa. The production of cocoa is mostly performed by hand, which makes it a highly labour-incentive process. According to Mondeléz International, one of the largest chocolate makers in the world, ‘90% of the world’s cocoa (sic) beans are harvested on small, family-run farms with less than two hectares - about 5 acres - of land and an average yield of just 600-800 kg per year.’ The production cycle of cocoa starts with the following actions (steps), namely harvesting, fermenting, and drying.

• Harvesting

Most cocoa-producing countries in the world have two peak production periods per year: The main harvest and a smaller harvest. Harvesting starts when the cacao pods are ripe and ready to be harvested. The pods need several months to grow and ripen. Checking the ripeness of the cacao pods is a difficult, but essential, task. Under-ripe cacao beans will not have developed all their flavours and aromas. Conversely, over-ripe pods will start to germinate. The trees are checked several times during the harvest season because the cacao pods do not ripen at the same time, even those on the same trees. The harvesting is done manually. Machines are not used because they are not able to determine the ripeness of the cacao pods. Furthermore, machines could damage the soft bark of the trees or the clusters of flowers as well as the pods that grow from the trunk. The harvesters use machetes, specialised knives, or hooked blades mounted on long poles to remove the cacao pods from the trees. The harvesters collect the cacao pods in baskets and take them to a place for further processing. The pods are cracked open and the cacao beans, with the pulp still clinging on, are extracted, ready for the next step in the production cycle - fermentation.

• Fermentation

ThoughtCo

describes fermentation as ‘a metabolic process in which an organism converts a carbohydrate, such as starch or sugar, into an alcohol or an acid.’ Fermentation, which takes three to seven days, is crucial to enhance and intensify the chocolate flavour and aroma. The process also prevents unwanted germination. The cacao beans are packed into fermentation trays or wooden boxes with holes to allow the pulp dripping from the beans, to go through. Cacao farmers estimate that they lose about thirty-three percent of their wet cacao weight during fermentation. The beans are covered with banana leaves or mats in wooden boxes or trays. During the fermentation process workers periodically stir the beans up with plastic or wooden shovels to ensure that the beans are equally fermented.

• Drying

After the fermentation stage, the cacao beans are ready to be dried. Another crucial step is to enhance the cacao flavour. The beans are dried in wooden boxes, on trays, platforms, bamboo mats, or patios. Workers turn the beans several times a day during the drying process which takes three to seven days. The turning of the beans is necessary to ensure that they dry evenly and to enhance the flavour and quality of the beans. The beans can also be dried indoors with artificial hot air and in rotary driers. However, sun-dried beans taste the best. The drying process results in cacao beans that weigh about 50 percent less before drying. After the drying process, the dried cacao beans are packed into sacks and transported to central collection sites, where the farmers of the surrounding area are allowed to sell their harvest of cacao beans. The beans from the different farms are mixed and put in jute bags of 200 pounds (approximately 90.7 kilograms). The bags are then transported to an exporting company where the bags of beans are inspected and stored until they will be transported to a shipping centre where they will eventually be loaded onto ships. Cacao beans are being increasingly transported in bulk quantities, which reduces transportation costs. The precious cacao beans will then be shipped to countries, such as the Netherlands, USA, Germany, France, Switzerland, and Belgium, which are major producers of chocolate and manufacturers of semi-manufactured cocoa products. The cocoa products are manufactured after processes to roast, winnow (extract), and grind the cacao beans.   Producers The majority of the global production of cacao beans comes from West Africa. According to Statista*, the top eight cacao-producing countries are:

*Estimation as of February 2026 for the crop year 2026/2022. **In 1 000 metric tonnes.   Consumers Some of the countries that are considered major consumers of chocolate and other cocoa products are, amongst others: The Netherlands, Switzerland. Germany, Austria, the United Kingdom, Belgium, and Sweden.  

How to trade cocoa

The main exchanges where cocoa is traded are the Intercontinental Exchange (ICE) in London, the NYSE Liffe (part of the New York Stock Exchange (NYSE), and the New York Mercantile Exchange (NYMEX). The prices in New York are based on the South-Asian market and prices on the ICE in London are based on prices in Africa. Cocoa can be traded in futures contracts and via contracts for difference (CFDs). CFDs are complex trading instruments, coming with a high risk to lose money quickly due to leverage. Brokers point out that between 74% and 89% of retail investor accounts lose money when using CFDs in trading. Generally, the intention of cocoa futures contracts is not to secure the supply of cocoa beans, but rather to counteract the risk of adverse price movements. To trade the commodity cocoa via futures and CFDs, an investor needs the professional advice of a professional, trusted, and regulated commodity broker, such as AvaTrade.  

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Factors affecting the cocoa price

Cocoa is classified as a soft commodity, meaning it is grown and cared for, and not mined or extracted from the earth’s crust. Due to the regions where cacao trees are grown, it is also called a tropical commodity. Although cocoa is one of the smallest soft commodity markets in the world, it plays a major role in the food and retail industries. With the global annual consumption of cacao beans estimated at over 4.5 million tonnes, cocoa is a key commodity in world markets, a significantly useful commodity considering all the products made from the cacao bean, such as various types of chocolates, cocoa liquor, cocoa powder, and cocoa liquor. Therefore, it is important to take note of factors that can affect the production (supply) of and demand for cocoa, which eventually affect the price of cocoa. Factors such as:

• Climate and weather conditions

The production of cacao beans requires favourable weather conditions, specifically temperature and rainfall. Cacao trees need warm temperatures and regular rainfall. Harsh weather conditions, such as long and severe droughts can cause the pods to dry out, while heavy rains can cause the pods to rot. Climate change, global warming, and unfavourable weather conditions can negatively affect the production of cacao. Consequently, the supply of cacao beans will decrease, and the price of the commodity will likely rise.

• Political unrest and labour issues

West African countries produce more than 60 percent of the world’s cacao beans. Countries like Côte d’ Ivoire, Ghana, and Indonesia often experience political unrest and labour disputes. Uncertainty about political changes, wage wars, and the elimination of child labour, are factors that can affect the supply and the price of cocoa.

• Plant diseases

Plant diseases such as black pod, witches’ broom, and frosty pod rot contribute to a decline in the production of cacao beans globally. They have a severe impact on the harvest, leading to a reduced supply and consequently increasing prices.

• Low pollination rate

For a tree to bear fruit, its flowers have to be pollinated. Based on research, only about 10 to 20 percent of the flowers produced by a cacao tree are successfully pollinated, of which only less than 5 percent develop into mature fruit.

• Transportation costs

Moving cacao beans from small cacao producing farm in a developing country to manufacturers of cocoa products and chocolate makers in European countries requires a lot of effort. Also, the beans have to be transported and shipped over long distances, involving high transportation costs. With the current war between Russia and Ukraine causing extremely high oil prices, transportation costs are rising, causing the price of cocoa to increase.

• Change in lifestyle

Living standards

in countries such as China and India are improving, resulting in an increasing demand for luxury products such as chocolate and cocoa-related products. In several countries in the western world, the demand for and consumption of dark chocolate are rising, due to health considerations. Dark chocolate requires more cocoa to produce than milk chocolate, implying an increase in the demand for cocoa.  

Main uses of cocoa

The primary use of cocoa is to produce chocolate that is available in numerous food products, such as numerous types of sweets, cakes, chocolate milk, and cereals, to name a few. Cocoa is also used to manufacture cocoa products such as:

• Cocoa butter - a component of chocolate and cosmetic products.
• Cocoa liquor/paste - a product of milling cocoa nibs and used in the manufacturing of chocolate along with other ingredients.
• Cocoa press cake - the product after cocoa liquor has been pressed and the majority of the cocoa butter extracted.
• Cocoa powder (solids) - used as an ingredient in different foodstuffs like desserts, cakes, biscuits, and flavoured drinks, to name a few.

In addition, cocoa is also a key component in the production of pharmaceuticals. It forms the basis for lotions and suppositories and lotions. Cocoa butter, also known as Theobroma Oil, is used to treat stretch marks and bruises. It is also highly effective as a moisturiser.   Note: This article does not constitute investment, financial or trading advice. Please obtain the advice of a professional and regulated commodity broker before making trading and investment decisions.  

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