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The international cocoa trade (Third edition)

Robin Dand, NYSE Liffe, UK

The international cocoa trade gives full weight to cocoa’s economic importance and has no equal as a truly practical guide for all those involved in producing, using and trading the commodity, as well as the banks that provide finance along the way.
Coffee & Cocoa International

 - provides an authoritative and comprehensive review of the cocoa trade at the beginning of the twenty-first century, and the main factors that drive and affect that business
 - examines the history and origins of the international cocoa trade, and its recent developments featuring a discussion of environmental and practical factors affecting cocoa production
 - explores issues concerning the export and trading of physical cocoa, including the actuals market, the physical contracts used and the futures and options markets
 - updated appendices provide copies of some of the most important documents used in the cocoa trade, including contracts, sale rules and world production statistics

‘An overview of the history of cocoa, the factors affecting its production and consumption as well as how the trade is conducted, various risks mitigated, and by whom. …The International Cocoa Trade is a work designed to inform all on the subject of cocoa and an essential guide for those involved in its trade.’

Dr J. Vingerhoets, Executive Director, ICCO

Cocoa is a valuable commodity, and the cocoa trade involves many different parties from growers and exporters through dealers and factories to those trading futures and options and the banks they deal with. The International Cocoa Trade provides an authoritative and comprehensive review of the cocoa trade at the beginning of the twenty-first century, and the main factors that drive and affect that business.

The opening chapter of the third edition examines the history and origins of the international cocoa trade, and its recent developments. The agronomics of cocoa production are discussed in chapter two whilst chapter three deals with the environmental and practical factors affecting cocoa production. Chapters four, five and six cover issues around the export and trading of physical cocoa, including the actuals market, the physical contracts used and the futures and options markets. In chapter seven, the international consumption and stocks of cocoa are reviewed with chapter eight discussing the issue of quality assessment of cocoa beans for international trade. Finally, chapter nine focuses on the end product, examining the processing of cocoa beans and the manufacture of chocolate. Updated appendices provide copies of some of the most important documents used in the cocoa trade, including contracts, sale rules and world production statistics.

This comprehensively updated third edition of The International Cocoa Trade ensures its continued status as the standard reference for all those involved in the production consumption and international trading of cocoa.

ISBN 0 85709 125 5
ISBN-13: 978 0 85709 125 3
December 2010
656 pages  234 x 156mm  hardback  
£160.00 / US$270.00 / €190.00

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About the author

Robin Dand is Product Manager at NYSE Liffe. He has previously worked for Gill & Dufus Limited, Holco Trading Company and as Shipping Manager at the ICCO. He is widely regarded as a leading authority on the cocoa trade.

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Contents

History and origins of the international cocoa trade
 - The beginning
 - Early production
 - Early consumption
 - Forastero cocoa and cocoa production since 1840
 - Prices
 - Recent times – 1980-2010
 - References

Agronomics of international cocoa production
 - Classification
 - The cocoa tree
 - Climatic requirements
 - Soil
 - Methods of production
 - Cocoa nursery
 - The plantation
 - Nutrients
 - Diseases and pests
 - Harvesting and post-harvest practice
 - References

Environmental and practical factors affecting cocoa production
 - Evolution of production
 - Factors affecting production
 - Environmental influences
 - Smallholders and estates
 - Setting up
 - Labour
 - Assessing production
 - Going forward
 - References

The physical market in the international cocoa trade
 - Background
 - physical market – trade associations
 - Export marketing
 - Processing at origin
 - Other participants
 - The recent past
 - References

Physical contracts used in the international cocoa trade
 - Introduction
 - Differences between the FCC and CMAA terms
 - Contract terms
 - Delivery terms
 - Weight terms
 - Contract forms
 - Price fixation contracts (PFA)
 - Cocoa products
 - Contract performance
 - Risk management
 - Disputes
 - References

Futures and options markets in the international cocoa trade
 - Introduction
 - Differences between the futures and physical markets
 - The two futures exchanges
 - Financing tools and sources of cocoa
 - Link between physical and futures markets
 - An example of a simple hedge
 - Organisation of futures markets
 - Deliveries
 - The board
 - Market participants
 - Liquidity
 - Trading techniques
 - Hedging
 - Arbitrage
 - Exchange for physicals or against actual and exchange for swaps
 - Cleared-over-the-counter (OTC) contracts
 - Options
 - Regulation of markets
 - Market behaviour
 - Conclusion
 - References

International consumption and stocks of cocoa
 - International consumption and stocks of cocoa
 - The uses of cocoa
 - Measuring consumption
 - Factors affecting consumption
 - Stocks
 - Conclusions
 - References

Quality assessment of cocoa beans for international trade
 - Introduction
 - Faults occurring in cocoa
 - Fumigation
 - Sampling
 - The cut-test: procedure, fault definition and standards
 - Bean count
 - Cut-test standards
 - The limitations of the cut-test and ideas on its replacement
 - Factors important to the butter presser
 - Factors important to the chocolate manufacturer
 - Fine or flavour cocoa
 - Achieving quality cocoa
 - References

Cocoa bean processing and the manufacture of chocolate
Introduction
 - Initial processing
 - Production of cocoa liquor or mass
 - Methods of cocoa butter and power production
 - Cocoa butter
 - Cocoa powders
 - Chocolate production
 - The end
 - References

Appendices
 - I Strategic/recorded pesticides for use in cocoa and those that must be avoided
 - Appendix II FCC cocoa bean rules for contract, weighing, sampling and quality
 - Appendix III Specific FCC sale rules applicable for cocoa beans in bags on CIF landed weights with payment by documentary credit
 - Appendix IV FCC contract rules for shipment of packed cocoa products
 - Appendix V CMAA cocoa contracts
 - Appendix VI NYSE Liffe Cocoa futures contract
 - Appendix VII NYSE Liffe: extracts from the Grading and Warehousekeeping procedures in respect of Cocoa and Robusta Coffee Futures Contracts
 - Appendix VIII ICE Futures U.S., Inc. Cocoa Rules
 - Appendix IX List of recognised methodologies of analyses for cocoa beans and products as published by CAOBISCO and ISO
 - Appendix X Information to monitor and interpret while following the evolution of the cocoa market
 - Appendix XI ICCO statistics of the world production, grindings and summary