Cocoa
Cocoa is a popular commodity with growing demand, relatively stable production and wide availability through brokers. This guide will explain how to start trading cocoa, from production and consumption figures to factors that move prices. We also list the best cocoa brokers:
Top Cocoa Brokers UK
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AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for trading, alongside a comprehensive education center and multilingual customer support.
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Founded in 2002 in Poland, XTB now serves more than 935,000 clients. The forex and CFD broker combines a heavily regulated trading environment with an extensive selection of 5,600+ assets and a commitment to trader satisfaction, featuring an intuitive in-house platform with superb tools to support aspiring traders.
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Spreadex is an FCA-regulated broker that offers spread betting opportunities on an impressive 10,000+ CFD instruments including 60 forex pairs. Traders can also take short-term positions on sporting events. The brand has been around for over 20 years and has won multiple awards.
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Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for traders at all levels.
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IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
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XM is a globally recognized forex and CFD broker with 10+ million clients in 190+ countries. Since 2009, this trusted broker has been known for its low fees on 1000+ instruments. XM is regulated by multiple financial bodies, including the ASIC and CySEC.
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eToro is a top-rated multi-asset platform which offers trading services in thousands of CFDs, stocks and cryptoassets. Launched in 2007, the brand has millions of active traders globally and is authorized by tier one regulators, including the FCA and CySEC. The brand is particularly popular for its comprehensive social trading platform. Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply. 76% of retail CFD accounts lose money.
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RoboForex is an online broker, established in 2009 and registered with the IFSC in Belize. Traders can choose from five accounts (Prime, ECN, R StocksTrader, ProCent, Pro) catering to different needs with trades from 0.01 lots and spreads from 0 pips. RoboForex has also enhanced its offering over the years, adding CFD instruments and launching its stock trading platform, plus the CopyFX system.
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InstaForex is a forex and CFD broker founded in 2007. The broker offers diverse market coverage to over 7 million clients, spanning traditional assets like currencies and shares, as well as other interesting opportunities such as IPOs. Traders can also access copy trading services, PAMM accounts and investment opportunities. InstaForex is regulated by the BVI FSC.
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BlackBull is a New Zealand-based CFD broker with trading opportunities on forex, stocks, indices, commodities and cryptos. The broker supports the MetaTrader 4 and 5 platforms as well as TradingView, cTrader and a proprietary mobile app. Clients can trade with high leverage and tight spreads from 0 pips on the broker's ECN accounts.
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Founded in 2009, Vantage offers trading on 1000+ short-term CFD products to over 900,000 clients. You can trade Forex CFDs from 0.0 pips on the RAW account through TradingView, MT4 or MT5. Vantage is ASIC-regulated and client funds are segregated. Copy traders will also appreciate the range of social trading tools.
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Established in 2008 and headquartered in Israel, Plus500 is a prominent brokerage that boasts over 25 million registered traders in over 50 countries. Specializing in CFD trading, the company offers an intuitive, proprietary platform and mobile app. It maintains competitive spreads and does not charge commissions or deposit or withdrawal fees. Plus500 also continues to shine as one of the most trusted brokers with licenses from reputable regulators, including the FCA, ASIC and CySEC.
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Fusion Markets is an online broker established in 2017 and regulated by the ASIC, VFSC and FSA. It is best known for its low-cost forex and CFD trading, although its multiple account types and copy trading solutions cater to a range of traders. New clients can sign up and start trading in 3 easy steps.
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Axi is a global forex and CFD trading firm, founded in 2007 in Sydney, Australia. Highly leveraged trading opportunities plus a $0 minimum deposit make it a popular choice among 60,000+ traders worldwide. Axi also stands out for its resources, including copy trading and Autochartist.
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Founded in 2015, VT Markets maintains its position as a top Australian multi-asset CFD broker. With 1000+ tradeable instruments and support for the MetaTrader 4 and MetaTrader 5 platforms, this broker delivers a wide range of trading opportunities to over 200,000 clients worldwide. VT Markets is regulated by the ASIC, FSCA, and SVGFSA.
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Trade.com is a trustworthy online broker with a global presence. The broker offers 2,100+ CFDs in major markets, as well as futures, options and more. The broker offers best-in-class platforms and superior analysis tools for experienced traders. The broker is also regulated by top-tier authorities including the FCA and CySEC.
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Grand Capital is a MetaTrader broker with welcome bonuses, trading competitions and an intuitive copy trading service. Several account types and 400+ assets provide trading opportunities for various types of investors and strategies. New users can also open an account and start trading in a matter of minutes.
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IronFX is a multi-regulated forex and CFD broker founded in 2010. This award-winning firm offers 500+ markets to over 1.5 million clients across 180 countries. Traders can access various account types with competitive pricing on the MT4 platform, as well as 24/5 customer support in 30 languages.
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Ingot Brokers is a multi-regulated brokerage established in 2006. The broker offers CFD trading opportunities on 1000+ instruments including forex, stocks, indices, commodities and cryptocurrencies. The broker supports the MetaTrader 4 and MetaTrader 5 platforms and offers both raw spreads and commission-free account options.
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Dukascopy is an online broker operated by a Swiss-regulated banking group. It offers a good selection of 500+ markets, with forex, stocks, gold, ETFs, indices, bonds and cryptocurrencies available. It also offers flexible trading opportunities through the choice of CFDs or binary options. Traders will use MetaTrader 4 or a proprietary platform that is well-suited to automated trading.
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MultiBank FX is an established broker offering forex and CFD products since 2005. With 20,000+ instruments, plenty of local payment methods and 24/7 multilingual customer support, the broker is a popular choice among traders globally. New clients can also access a variety of bonus offers and access the hugely popular MT4 and MT5 trading platforms.
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Pacific Union Prime is an FSCA and offshore-regulated multi-asset broker offering competitive fees and direct market access on forex, commodities, stocks, bonds and indices. The broker supports the popular MetaTrader 4 and MetaTrader 5 platforms and a proprietary mobile app. Fees vary by account type with no commission and spreads from 1.9 pips on the Standard account and $7 commission per lot and spreads from 0.4 pips on the Prime account.
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SimpleFX is an online broker specializing in CFD and cryptocurrency trading, with multi-currency accounts, STP execution, low pricing and no minimum deposit. Bringing innovation and gaining recognition at numerous industry events since 2014, SimpleFX now caters to retail traders from over 190 countries, boasting a client base exceeding 200,000 active users.
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Errante is a Cyprus-based and regulated forex and CFD broker with leveraged trading on multiple assets, tiered accounts including a zero-spread option, and copy trading support. The broker offers leveraged trading up to 1:30 under its CySEC-regulated branch and 1:500 from an offshore branch, and supports the MetaTrader 4 and MetaTrader 5 platforms. Errante's asset list is relatively limited but it does offer fast execution and low latency, and it is a trustworthy brand.
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ActivTrades is a UK-headquartered CFD and forex broker established in 2001. The brokerage is heavily regulated with licenses from the FCA, SCB, CSSF, BACEN & CVM and CMVM. Over 1000 CFDs are available spanning 7 asset classes. Over 93.60% of orders are executed at the requested price. ActivTraders also offers a selection of leading trading platforms, including MT4, MT5, TradingView and ActivTrader platforms.
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Libertex is a well-known broker, established in 2012. The regulated brand has served numerous clients and is regulated by the Cyprus Securities and Exchange Commission with license number 164/12. Libertex offers CFD trading on 250+ underlying assets, including through an innovative and user-friendly proprietary web trader platform. Choose between CFDs on forex, cryptocurrencies, commodities, stocks, indices and ETFs, which are available with tight spreads and low commissions.
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Admirals is an FCA- and ASIC-regulated broker with an excellent range of leveraged instruments, including forex, stocks, indices, ETFs, commodities, cryptos and more. The broker supports the MetaTrader 4, MetaTrader 5 and TradingCentral platforms. With both spread betting and CFDs available and thousands of instruments, this broker provides more flexibility than most rivals.
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Infinox is a UK-based and FCA-regulated broker that offers diverse trading products thanks to its STP and ECN account types and support for MetaTrader 4, MetaTrader 5 and a proprietary platform. Clients can also benefit from a free VPS that can support automated strategies and a social trading platform, catering to both beginner and seasoned traders.
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Amega is an offshore STP broker offering CFD trading on forex, stocks, indices and commodities with very high leverage up to 1:1000 and a zero-commission pricing structure. Traders access markets through the MT5 platform and can test the broker's services through a demo account.
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FXCentrum is an offshore broker that offers highly leveraged, commission-free trading on diverse instruments with tight spreads. Traders can access forex, equity and commodities markets via MetaTrader 5 or the proprietary FXC platform and use the award-winning ZuluTrade platform for copy trading.
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Capital.com offer CFDs on a range of markets with competitive spreads and zero commissions. The broker also offers the Investmate app, negative balance protection and leveraged trading.
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Trading 212 is a European and UK-regulated CFD broker that also offers stock investing and ISAs. It’s best known for its commission-free trading model and beginner-friendly app, which has helped it attract 2.5 million users and £3.5 billion in client assets.
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LegacyFX is a multi-asset broker offering an MT5 download & free signals.
Cocoa Trading – The Basics
Cocoa beans originate from seeds of a cacao tree known as Theobroma cacao. Processed cocoa is the main ingredient in chocolate and is used in a range of comestibles such as drinking powder and baked goods, and even in some cosmetics.
The global cocoa market was valued at around $14.5 billion in 2022 and is projected to increase to over $19 billion by 2028. The average trading price of cocoa ranged between $1900 and $2700 per metric ton between 2016 and 2023.
Cocoa demand and production are generally rising. Production is expected to reach over 5 million metric tons in the year 2022/2023. Typically, the beans are sourced in tropical countries near the equator, particularly in Africa.
Large producers include Ghana, Indonesia, Nigeria, Ecuador, Uganda, and the world’s largest producer, the Ivory Coast. In the crop year 2021 to 2022, an average of 2.1 million metric tons of cocoa beans was sourced in the Ivory Coast alone. By comparison, just over 950,000 tons were produced from South American regions during the same time frame, and Ghana, the second largest producer, clocked in around 800,000 tons. The third, Indonesia, produced around 750,000 tons.
All of the world’s top cocoa importers are Western countries, with the USA importing the most followed by Germany, Netherlands, France and Belgium.
Cocoa can be traded on London’s Intercontinental Exchange (ICE) or the New York Mercantile Exchange (NYMEX).
Futures contracts are the most popular investment products when trading cocoa. The ticker symbol on the UK exchange is CC=F.
Why Trade Cocoa?
- Chocolate – Cocoa is the key ingredient in chocolate-based products, with rising demand in recent years. The global chocolate market was valued at just over $131 billion in 2021 with forecasts expecting this figure to reach nearly $196 billion by 2029. Consumer demand for dark chocolate is also on the rise, with individuals recognising its benefits such as antioxidants. Some of the largest food giants with a heavy interest in cocoa include Nestle, Kraft Foods, Mars Inc, Cadbury, and Hershey Foods Corp.
- Portfolio Diversification – Cocoa is a soft commodity that can be introduced to trading portfolios. It is a volatile asset due to various factors influencing supply and demand, and this can bring returns to traders who perform well. The opportunity to trade cocoa futures also brings the possibility of making trades for hedging purposes.
- Wide Availability – Cocoa is offered by the biggest brokers in the UK, and you should be able to choose from several trading instruments based on your strategy. This includes CFDs, which UK cocoa brokers will usually offer leverage up to 1:10 on, as with other commodities.
Cocoa Price Today
Factors That Impact Cocoa Trading Prices
Weather & Disease
As an agricultural commodity, cocoa supply and companies rely on good weather and healthy crops, and any large impacts on the climate of the world’s major cocoa producers will hit global supply.
A lack of rainfall and sub-par tropical temperatures will reduce the exported volumes of cocoa, while a good harvest will lead to a surplus and lower prices.
Similarly, a disease affecting cacao trees will hit supply, particularly if it spreads in a major cocoa producer.
Geopolitical Events
Economic instability in the major producing countries such as Ghana and Ivory Coast may reduce supply if it reduces the country’s agricultural output or leads to political developments that prevent exports, such as sanctions.
For example, the post-election conflict in 2010 saw a reduction of around 2500 metric tons of cocoa exports from the Ivory Coast.
Lifestyle & Tastes
The demand for cocoa is linked to trends and lifestyle factors, particularly health and wellness, as chocolate-based products typically have a negative association with links to obesity.
Trends for healthy living may lower demand if they spread in large chocolate consumer countries, though customers may still seek healthier alternatives such as dark chocolate or organic options.
According to the CBI, the organic chocolate market is forecasted to grow by almost 7% between 2021 and 2028.
Fairtrade Legislations
The price of trading cocoa is influenced heavily by the cost of labour. Changes to rules and regulations from global associations such as Fairtrade International and sustainability practices implemented by processors such as Ecom and Olam aim to improve this.
In 2018, Fairtrade announced that it would increase the minimum price it pays for cocoa bean exports from $2000 per MT to $2400. This could lead to a higher supply if it encourages more cocoa farming, but it could also increase the price of the commodity.
Currency Value
The price of cocoa is typically listed in USD or GBP. Therefore, any influences on the value of these currencies can impact the price of the commodity.
For example, if the GBP gains against other currencies, cocoa will tend to become more expensive. The UK’s withdrawal from the European Union saw the GBP vs USD drop from $1.50 to $1.20.
In this same period, the Brexit agreement may have played a role in the price of cocoa futures dropping from $3200 per tonne in 2016 to $1769 per tonne recorded in June 2017.
Production Cycle
The full production cycle of cocoa from extraction to exportation can be as long as a few years. This includes transportation, quality checks, and storage. Due to this, it is not unusual to see supply shortages in relation to demand due to the lack of reactiveness.
On the other hand, there may also be periods of heavy supply which can reduce the price.
Infrastructure
Most cocoa is produced in developing countries where transport links can be poorly maintained and prone to disruptions.
Any challenges that disrupt infrastructure in supplier countries will slow the supply; on the other hand, new infrastructure products could have the opposite effect.
How To Trade Cocoa
Futures
Futures are the most popular method of trading cocoa.
A futures contract is a transactional agreement to buy or sell a specified amount of cocoa beans for an agreed price at a future date. The ICE, for example, offers cocoa futures with contract sizes of 10 metric tonnes and prices quoted in GBP.
While many commodities futures require the buyer to take physical delivery of the cocoa beans when the contract expires, cash-settled futures do not.
CFDs
Contracts for difference (CFDs) are a straightforward investment vehicle that allows retail traders to speculate on cocoa prices without owning the underlying asset. The profit or loss in a CFD is determined by the difference between the price of cocoa at the open and close of the contract, and traders can make use of leverage when trading.
AvaTrade, for instance, offers cocoa CFDs with leverage up to 1:10.
Shares
Traders who want to gain exposure to cocoa without trading it directly can invest in stocks of companies that produce, process or otherwise use the commodity. The share price of these companies may reflect the price of cocoa to some extent.
Cargill, for example, has been sourcing Cocoa beans and producing cocoa-based products in Ghana for over 40 years with an innovative processing plant launched in 2008.
Alternatively, you could consider purchasing shares of firms that are involved in chocolate manufacturing such as Cadbury and Nestle.
ETFs
Another option is exchange-traded funds. ETFs track a specific market segment by investing in several relevant assets – in this case, companies that produce cocoa or manufacture cocoa products.
Popular funds include the WisdomTree Cocoa ETF and the iPath Bloomberg Cocoa Subindex ETN.
ETFs focussing on the agriculture or food manufacturing sectors may also have significant exposure to cocoa.
How To Compare Cocoa Brokers
The main factors to consider when comparing cocoa brokers include:
Products
Choose a cocoa broker that offers your choice of cocoa futures, options, ETFs, CFDs or stocks.
Also check the amount of leverage available. UK-regulated firms typically cap leverage on soft commodities to 1:10.
Fees
The top cocoa brokers offer tight spreads and low fees.
Pepperstone, for example, offers spreads from 5 pips on its cocoa CFD with an average spread of 5.26. The contract size is 1 metric tonne.
Trading Platform
The platform is where you will analyse cocoa price history and plan trades. The best cocoa brokers offer a choice of platforms as well as mobile app compatibility.
Leading brokers may provide bespoke software, a selection of third-party platforms such as MetaTrader 4 or cTrader, or a combination of both.
Most traders look for an interface with custom charts, a range of timeframes, access to historical price data, technical indicators, and drawing tools. Algo trading or automated investment options such as copy trading are also popular.
Regulation
Oversight from a top-tier financial body such as the UK’s Financial Conduct Authority (FCA) is a good way to ensure the cocoa broker has tight security and offers customers protections, such as segregated client fund accounts and negative balance protection.
If you sign up with an overseas cocoa broker, check that it is overseen by a reputable regulator and research its track record.
Customer Service
Leading cocoa brokers offer accessible customer support with fast response times and several contact methods including telephone, live chat, or email. A good support hub or FAQ section can also be useful.
XTB, for example, provides local customer support for UK traders including a toll-free telephone number and live chat, available 24/5.
Trading Hours
Cocoa trading hours vary between markets and brokers.
ICE London, for instance, offers trading opportunities between 9:45am and 6:30pm (GMT).
Bottom Line On Cocoa Trading
Cocoa trading can be used to bet on chocolate demand, manage risk, and diversify portfolios. The best cocoa brokers offer a choice of trading products, including CFDs and futures. However, cocoa prices can be severely impacted by climate change and supply issues in major exporter countries such as Nigeria, Ghana, and the Ivory Coast. As a result, only risk what you can afford to lose.
FAQ
How Can I Trade Cocoa?
UK brokers offer several cocoa trading instruments, including futures, CFDs, ETFs, and shares in companies involved in the production, processing and sale of related products. Trading cocoa futures is particularly popular, and available on the ICE and NYMEX exchanges.
Which Are The Best Brokers For Trading Cocoa?
The best brokers for trading cocoa will depend on your trading strategy, investment goals, and personal requirements. However, look for low fees, FCA oversight, a stable platform and app, plus fast execution speeds.
What Are The Largest Exporting Countries Of Cocoa?
The largest exporters of cocoa include the Ivory Coast, Ghana, Indonesia and Nigeria. Any political, economic, or climate changes in these countries can have a major impact on the supply of cocoa and therefore the price of the commodity.
Is Cocoa Trading Safe?
No trades are guaranteed to make a profit and cocoa is a volatile commodity. Keep an eye on key price influences such as supply news from major producing countries and worldwide demand for cocoa products like drinking powder and chocolate bars. Also trade with regulated brokers and trading platforms.
What Are The Intercontinental Exchange (ICE) Cocoa Trading Hours?
ICE London cocoa market opening hours are 9:45am and 6:30pm (GMT).
Article Sources
Cocoa Industry Facts (Statistica)
Global Cocoa Market Report (EMR Insights)
Cocoa Farming Practices (Fairtrade)