Cocoa Futures

The CME Europe Cocoa product suite comprises Euro-denominated deliverable futures and a US dollar-denominated cash-settled futures contract. Together, they provide effective risk management tools for the global cocoa industry. Market participants looking to manage risks associated with trading, processing and manufacturing cocoa and cocoa-based products now have a variety of flexible instruments in one central marketplace.

The CME Europe physically-delivered Cocoa futures contract is designed to track the underlying Cocoa cash market more closely than any other futures alternative. Moreover, CME Europe’s enhanced delivery system for Cocoa allows stronger convergence between our futures contract and the cash markets, offering market participants more effective risk management vehicles.

Additionally, CME Europe has developed unique methodologies for preparing, sampling and grading of cocoa during the delivery process, which provide capital efficiencies for participants in our markets.

Cocoa Options

Cocoa options will be available for trading on CME Europe from 29 June 2015.These contracts will be denominated in euros beginning with the September 2015 listed month.

Benefits Include:

More Efficient Pricing

Contract priced against bulk and bagged cocoa, where bulk comprises as much as 70% of European imports, better reflecting the physical market.

More Effective Delivery Process

  • Delivery basis includes pre-payment of delivery out charges, improving the environment for cash market/futures price convergence.
  • Consolidation of delivery ports in Amsterdam, Antwerp and Hamburg provides a clear pricing basis for the contract.
  • Ongoing warehouse inspections create confidence in the delivery mechanism and the quality of goods received.
  • Creation, storage and management of warehouse warrants through a unique system that offers significant cost and time-saving advantages to market users.
  • Alternative Delivery Process (ADP) enhances delivery flexibility by permitting sellers and buyers to substitute cocoa if mutually agreed.

Better Sampling and Grading

  • Unique preparation and sampling methodology allows bulk parcels to be stored long-term with less deterioration in quality (US patent pending).
  • Grading practices mirror standards established by the Federation of Cocoa Commerce (FCC), bringing value from grading results closer to that of the underlying physical market.
  • Sampling and grading system based on the work involved, rather than tonnage represented by the sample, provides cost benefits to market users.
  • Improved system for parcel identity preservation and scope to offer a premium for certification reflects the evolution of chocolate manufacturer requirements.

Capital Efficiency

Margin offsets for arbitrage between the deliverable and cash-settled Cocoa contracts, a feature unique to CME Europe, offer additional capital savings.

Guides and Procedures

* Please note that these documents are for reference use only. Please contact the specific organisations who publish these documents for the most up to date versions.

Cocoa Futures Sampling Grading and Delivery Programme

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