# Cocoa: Trading

Why London still trades cocoa in sterling

Source page: https://www.materialinsights.org/commodities/cocoa/trading/

What this tab covers How and where it is bought and sold: who buys and sells, exchanges and benchmarks, contract types, the big trading houses and how prices are discovered.

Cocoa futures trade on ICE Futures US in New York, in dollars per tonne, and on ICE Futures Europe in London, in sterling, a legacy of London's historic role that Geman highlights. Grinders and merchants such as Barry Callebaut, Cargill and Olam buy beans from exporters and producer-country boards. Côte d'Ivoire and Ghana sell much of each crop forward through state marketing bodies, and have added a Living Income Differential premium in recent seasons. Pirrong reports credible evidence of squeezes in cocoa futures.

#### Where it is bought (buyers)

- Grinders (Barry Callebaut, Cargill, ofi) buy beans from exporters in Abidjan, San Pedro, Tema and Guayaquil, and grind in the Netherlands, Malaysia, Côte d'Ivoire, Germany and the US
- Chocolate makers (Mondelez, Mars, Ferrero, Hershey, Nestlé) buy liquor, butter and couverture on cost-plus or forward contracts
- In India, Campco buys from farmers in Karnataka and Kerala; multinationals import beans and products

#### Where it is sold (sellers)

- Côte d'Ivoire's Conseil du Café-Cacao sells most of the crop forward, about 80% before fixing the farmgate price
- Ghana COCOBOD sells forward to international buyers
- Ecuadorian, Nigerian, Cameroonian and Indonesian exporters sell freely on differentials to futures

#### Exchanges and benchmarks

| Venue | Contract | Notes |
|---|---|---|
| **ICE Futures US (New York)** | Cocoa, 10 metric tonnes, US$ per tonne | global dollar benchmark; deliverable from US warehouses |
| **ICE Futures Europe (London)** | London Cocoa, 10 metric tonnes, sterling per tonne | legacy of London's historic role; West African origins deliverable to European warehouses |
| **India** | none | no Indian exchange lists a cocoa contract; Indian buyers hedge on ICE or price off import parity |

#### Contract types

- Forward sales of a season's crop by marketing boards
- Physical bean contracts priced at a differential to ICE futures
- Cocoa butter and powder priced as a ratio (multiple) of the bean futures price
- Cost-plus supply contracts between grinders and chocolate makers

#### Top trading houses

- Sucden
- Touton
- Ecom
- ofi
- Cargill
- Barry Callebaut

#### How prices are discovered

- ICE New York and London futures settlements
- ICCO daily price
- Origin differentials and butter and powder ratios quoted by brokers and price reporters

## Other sections

- [Summary](https://www.materialinsights.org/commodities/cocoa/index.md)
- [Overview](https://www.materialinsights.org/commodities/cocoa/overview/index.md)
- [Correlation](https://www.materialinsights.org/commodities/cocoa/correlation/index.md)
- [Extraction](https://www.materialinsights.org/commodities/cocoa/extraction/index.md)
- [Production](https://www.materialinsights.org/commodities/cocoa/production/index.md)
- [Stocks](https://www.materialinsights.org/commodities/cocoa/stocks/index.md)
- [Cycles](https://www.materialinsights.org/commodities/cocoa/cycles/index.md)
- [Movement](https://www.materialinsights.org/commodities/cocoa/movement/index.md)
- [Criticality](https://www.materialinsights.org/commodities/cocoa/criticality/index.md)
- [Characteristics](https://www.materialinsights.org/commodities/cocoa/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/commodities/cocoa/emissions/index.md)
- [Relationships](https://www.materialinsights.org/commodities/cocoa/links/index.md)