Cocoa Trading and Cacao Trading

Cocoa desks exist as small departments within large multi-product agricultural traders, as well as entire trading firms dedicated to global cocoa trading and procurement/sourcing.  Imperium Commodity Search has experience as a recruitment agency with both global trading houses and niche product specialists across Cocoa and Cacao. 

Imperium Commodity Search are well placed to assist candidates and clients alike in their personal and corporate growth within the global cocoa markets. 

What is Cocoa? 

Cocoa is a term used to describe the fermented and dried bean of the evergreen cacao tree (Theobroma cacao) and used to create cocoa butters and powders which are used in the food production industry for the production of chocolate and chocolate based products.  Cocoa is a key ingredient in chocolate but is also used in a wide variety of other applications, including cosmetics, animal feed, fertilizer/fertiliser, mulch and soft & alcoholic drinks.  The husk of the cocoa seeds are used in animal feed and the contents, or pulp, used to produce cocoa butter, powders and drinks/cosmetics.  

Similar to other soft commodities, the production and consumption of cocoa has increased steadily this century, with current annual production sitting at around 3,000,000 metric tonnes.  Cocoa production employs around 6 million people in farming globally and is produced by small family farms across over 50 countries.  There are widespread concerns around slavery and conditions in Cocoa farming and almost 2 million of the 6 million farmers involved in production are part of the Fairtrade organisation. 

There are 3 main distinct types of cocoa produced:

Forestero Cocoa

Forestero Cocoa is the most commonly grown cocoa tree, accounting for around 80-90% of global production each year.  Forestero is a high-yield form of cocoa, and is semi-resistant to a lot of infections and parasites that affect cocoa production.  

Criollo Cocoa

Criollo Cocoa is considered a delicacy globally due to the small number of farms that still produce this type of cocoa.  It is at higher risk of diseases when compared to Forestero seeds and produces a much smaller yield volume, which has lead to many countries ceasing to produce this form.  Where it is grown, prices are higher due to its sought after status. 

Trinitario Cocoa

This strain of cocoa is a hybrid of the aforementioned Criollo and Forestero varieties and originates in Trinidad.  It has the advantage of producing higher quality product than the Forestero tree’s, however produces a higher yield and is less prone to disease compared with the Criollo variety of cocoa.

Of cocoa producing countries, the list of top ten producers is dominated by African and South American countries, with only Indonesia on the list from outside these two continents.  The top 5 cocoa producing countries are: 

Ivory Coast / Cote d'Ivoire (1.5m MT)
Ghana (900k MT)
Indonesia (800k MT)
Nigeria (500k MT)
Cameroon (300k MT)


How is Cocoa traded? 

Cocoa is traded in much the same way to coffee, with a mix of small traders purchasing from farms locally and then selling the product onto larger scale traders or wholesalers, as well as cooperatives which consist of a collection of independent farms and often manage the shipment of the product into manufacturers, producers or multinational trading and grinding firms like Barry Callebaut.  Cocoa is shipped by container along truck and railroads, as well as by ship.  Like many soft commodities, Cocoa is a perishable product and has very specific shipping requirements to ensure the product does not deteriorate in transit, or begin to ferment beyond controlled levels.  To achieve this, freight forwarders, shipping companies and logistics professionals use special containers used in coffee and cocoa shipments that have vents and waterproofing features. 

Cocoa Grading happens to ensure the product sold or exported meets certain criteria, and fits into two levels.  Good and Fair fermented grading is used to determine the levels of mould or fermentation, foreign matter and slate present in the cocoa batch. 

Small Scale Traders will manage relationships with farmers locally in the country of origin, purchasing smaller quantities of cocoa in bags, warehousing these and then selling them onto larger merchants or wholesalers.  With smaller traders, it is critical that they have strong relationships on the production side so that they can source enough product to sell into wholesalers at competitive prices.  This route often leads to the farmers earning a lower margin on their product when compared to working as cooperatives or selling into large scale merchants directly.   

Trading Houses and Merchants usually work directly with shipping firms and global trading houses to source and trade containers full of bags of cocoa to a larger quantity.  These merchants will either buy in bulk from small scale traders, or have relationships with co-operatives (groups of farms within an alliance or organisation) to purchase their crop.  

Cooperatives are groups of independent farmers that have pooled their resources to secure better negotiating power on global markets, working together to avoid price discrepancies and unfair export conditions. 

Cocoa futures are traded on the ICE (intercontinental exchange) and the NYMEX (New York Mercantile Exchange) by hedgers, speculators and professional traders.  Cocoa is a fairly volatile commodity and can be an attractive trading option to risk aggressive professional traders. 

Where is Cocoa traded?  

Cocoa is used in a variety of applications and goes into products that are consumed globally.  The bulk of global cocoa production sits across Africa and Latin America. 

The largest exporters of cocoa powder (as percentage of 2.42B total annual exports) are:

Netherlands (29%)
Malaysia (12%)
Germany (11%)
Spain (6.8%)
Indonesia (6.5%)

The worlds largest importers of cocoa powder are: 

USA (14%)
Netherlands (6.2%)
Germany (5.9%)
Russia (4.7%)
Italy (4.3%)

Who are the clients? 

The majority of cocoa ends up with roasters and grinders who produce cocoa powder.  The largest countries for the production of powder are the Netherlands, Malaysia and Germany.  Once roasted and ground, the cocoa powder is predominantly sold into food production companies that make chocolate butter, bars and drinks. 

What is the Salary for a cocoa trader? 

Cocoa trader salaries vary between countries, with small scale traders in countries of origin relying on commission and margins for the own income when purchasing cocoa from small farms and selling this into exporters or trading houses.  In the Netherlands where cocoa is often traded on a back to back basis, usually purchased as a raw material and sold as powder, the average salary for a cocoa trader is around 80,000EUR with a commission or bonus attached to performance and PnL.  This figure varies based on experience and client base. 

Imperium Commodity Search – Specialist Headhunter to the global Cocoa and Cacao Trading Markets 

Our consultants have experience working with both small scale traders and multinational participants of the cocoa and cacao industry, with a track record on placing both front office traders and merchandisers as well as logistics and operations personnel across the soft commodity chain. 

To discuss finding your next role within cocoa trading, operations and sourcing, or to find out how Imperium Commodity Search can give your firm a competitive edge in a volatile market, then please call us now on +44 (0) 203 927 5090 and one of our Cocoa / Soft Commodity Consultants will contact you ASAP.

View our current cocoa / cacao trading or operational jobs or contact one of our consultants to discuss current careers / jobs in cocoa trading to discuss your needs in more detail. 

To arrange a consultation with a consultant to discuss your hiring needs / growth plans and where we can assist click here or contact one of our consultants directly here for a confidential discussion.

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