The new history of cocoa dates back to the 6th century with its origins in the Amazon Basin. Cocoa was first brought to Europe in the 17th century in the form of a luxury drink. It was not until the 19th century that technology facilitated the roasting and pressing of cocoa beans which resulted in the creation of eating chocolate.

The major producers of cocoa beans are based in West Africa, Latin America and the Far East. Côte d'Ivoire is the largest single producer, with an annual crop of over 800,000 tonnes. Countries such as Brazil, Indonesia, Ghana, Malaysia and Nigeria also feature as major producing countries. Annual production of cocoa stands at around 2.6 million tonnes.

The major importers of cocoa beans are the USA, Netherlands, Germany, UK and France with most cocoa products being consumed in Europe and the USA respectively.

The cocoa tree is a native of the equatorial Americas, originally flourishing in the lowland forests of the Amazon-Orinoco basin. Shaded by larger forest trees, the cocoa tree can rise to modest heights of 6-9 meters.

Light green or red in the young plants, the leaves gradually turn green as the tree matures. Buds, flowers and the fruits appear on the older, leafless part of the tree. The flowers are small & delicate, in hues of white, yellow and pink. The fruit or pod is a large berry 15-25cms long, containing 30 to 40 seeds. Five or six months elapse from the time of flowering to the development of a mature pod. Throughout the year pods at varying stages of maturity, from small and green to full-size yellow and red, can be seen side by side on the cocoa tree. Mature cocoa pods resemble muskmelons or thickly ribbed gourds. Inside their tough woody husks, embedded in a mucilaginous pulp, are the seeds which, when fermented and dried, become cocoa beans. The pods grow mainly along the main stem of the tree.

Harvesting is a hand operation in which the cocoa pods are cut down from the tree. They are then opened and the pulp-covered beans are then scooped out. Once out of the pod, each cocoa bean must be freed from the firmly adhering pulp, separation is accomplished in the curing or fermentation process. Fermentation, which takes a number of days, browns the white or purplish seed, reducing its bitterness, and hardens the seed-skin to shell. Curing, (drying of beans, mainly by the sun), the beans are spread out on raffia or palm leaf mats, which can be carried inside in bad weather. This method of drying produces a higher quality product but takes a week or two and is highly labour intensive.

The Cocoa Futures contract was originally launched in 1928. Over the years changes have been made to ensure the contract remained an effective hedge for all market participants, contributing to its success as a world leading cocoa futures contract.

The Cocoa Options contract was launched in 1987 in order to offer market participants even greater flexibility and choice in their trading activities. Futures and options volumes currently equate to approximately 7 times global production of cocoa.

Cocoa futures & options have been traded on LIFFE CONNECT® since 27 November 2000.

The major users of the contract include the international cocoa trade, cocoa processors and chocolate manufacturers, managed futures funds, institutional investors and options specialists.

The long term support of the underlying cocoa trade and industry has ensured that the Cocoa futures contract has retained its role as the premier price fixing medium for physical cocoa contracts. Complementing this, the contract's close relationship to the physical market place, coupled with high levels of market liquidity, have continued to attract an ever-increasing level of business from the international investment fund community.

For further information please contact cocoa@liffe.com