Costa Rica’s chocolate comeback, The journey of cocoa, from bean to bar.


Navigating the Commodity Markets with Freight and Spreads

Although cocoa is one of the world’s smallest soft commodity markets, it has global implications on cocoa importers and exporters, food and candy producers, and the retail industry. Historically, from 1960 to 2014, Cocoa has reached an all time high of $5,368/MT in July of 1977  or about $20,635/MT in 2014 money.

Credit: tradingeconomics


Weather risk plays an important role for every agricultural commodities. Observations on the cocoa field and weather stations ?

Because Cocoa has no substitutes it has a very inelastic supply. Price patterns in the 70’s suggest that if trend is higher, prices can show no caps during many years.

coffee inelastic supply

The International Cocoa Organization provides grinding, production, demand, ending stocks statistics

Regression model for cocoa ending stock/grind ratio suggests that most price volatility will arise at low ES/Grind ratio level.

cocoa price ending stock grind ratio

Credit: An Analysis of the Ending Stocks to Use Ratio in Forecasting Cocoa Prices by Brian W. Meinken…

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