Cocoa is produced from the seeds of the cacao tree. The trees produce large pods that contain seeds and a sweet pulp. The seeds are then dried and fermented processed and traded as cocoa.
The weather, the rain is that the temperatures are a crucial factor for the cocoa plant. The production, therefore, is concentrated in very limited geographical areas near the equator. The major producers are the Ivory Coast, Ghana and Indonesia. Much of the global cocoa is in the hands of small farmers in developing countries, where the cocoa is a very significant factor in the local economy.
THE MARKET OF COCOA
Cocoa is traded both in London and in New York, seeds, butter and powder. The future of cocoa beans is traded on the New York Board of Trade and on the Euronext LIFFE.
The factors that affect the market price of cocoa are:
Political context: the geographic concentration also implies that the offer is sensitive to political conditions in the countries of production.
The life cycle of the cacao tree has a strong impact on the market.
The fertilizers and chemicals can significantly improve yields and reduce disease.
the fertilizers and chemicals can significantly improve yields and reduce disease.
They can affect the dynamics of demand and offer. The quality checks prior to export is increasing in many producing countries. At the same time, consumer countries are setting the standards for ingredients and quality levels allowed for chocolate.