Cacao Beans

Description

Cocoa beans from Ghana are traditionally shipped and stored in burlap sacks, in which the beans are susceptible to pest attacks. Fumigation with methyl bromide was to be phased out globally by 2015. Additional cocoa protection techniques for shipping and storage include the application of pyrenoids as well as hermetic storage in sealed bags or containers with lowered oxygen concentrations. Safe long-term storage facilitates the trading of cocoa products at commodity exchanges.

Cocoa beans, cocoa butter and cocoa powder are traded on futures markets. The London market is based on West African cocoa and New York on cocoa predominantly from Southeast Asia. Cocoa is the world’s smallest soft commodity market. The futures price of cocoa butter and cocoa powder is determined by multiplying the bean price by a ratio. The combined butter and powder ratio has tended to be around 3.5. If the combined ratio falls below 3.2 or so, production ceases to be economically viable and some factories cease extraction of butter and powder and trade exclusively in cocoa liquor.