Trading and shipping
The price on a screen in New York and the price a farmer receives in Sefwi are connected by a chain of contracts, warehouses and ships that most of the market never sees. Most of the ways the physical market surprises the futures market happen somewhere along it.
The futures markets
Cocoa trades on two exchanges: ICE Futures U.S. in New York, priced in dollars per tonne, and ICE Futures Europe in London, priced in pounds sterling. Each contract is ten tonnes. Five delivery months a year — March, May, July, September, December. Trading houses hedge physical positions here; managed money — hedge funds and commodity index funds — takes directional positions, and its weekly net position is published by the CFTC. When the market page says speculators are net long, that is the figure.
Deliverable cocoa sits in exchange-licensed warehouses in Europe and the United States as certified stock. The level of certified stock is a physical fact about how much cocoa is available to deliver against contracts, and it moves the front-month price in a way no forecast does.
Forward selling at origin
Côte d'Ivoire and Ghana do not sell their crop at the spot price. The Conseil du Café-Cacao and the Cocoa Marketing Company sell forward, typically committing the majority of the coming main crop to exporters and processors before the season opens. The average price achieved on those forward sales, less costs and levies, is what funds the farmgate price announced in October. This has two consequences the market regularly underestimates: the farmgate price lags the world price by up to a year, and a country that has sold forward at low prices into a rising market cannot pass the rise to its farmers — which is exactly when beans start walking across borders to the neighbour who can.
The physical chain
A farmer sells to a purchasing clerk at a village shed, who is funded by a licensed buying company (Ghana) or a cooperative or pisteur (Côte d'Ivoire). Bags move to district depots, are graded and sealed, and travel by truck to the ports: Abidjan and San Pédro; Tema and Takoradi; Lagos for Nigeria. There they are stored, sampled again and either shipped as beans or ground locally. The Conseil du Café-Cacao publishes weekly arrivals at the two Ivorian ports; COCOBOD publishes purchases. These are the fastest official supply data the market has, and they describe a crop that was harvested two to four weeks earlier.
Shipping
Most beans still move in jute bags of about 62–65 kg, palletised or loose-stowed in containers. Mega-bulk shipping — loose beans in the hold of a dedicated vessel or flexible container liners — has grown for the large processors because it is cheaper per tonne. The main lanes run from the Gulf of Guinea to Amsterdam, Antwerp, Hamburg and Le Havre, which handle the bulk of European imports, and to the US East Coast. Voyage time to northern Europe is two to three weeks.
The Living Income Differential
Since the 2019/20 season Côte d'Ivoire and Ghana have added a US$400 per tonne Living Income Differential to their forward sales, intended to reach farmers. Buyers have responded partly by discounting the origin premium they would otherwise pay, and the effective transfer has been contested ever since. It is the clearest example of the two governments acting as a price-setting bloc, and of the limits of doing so in a market with other origins.
Where it leaks
Administered prices next to a porous border produce smuggling. When Ghana's farmgate price is higher than Côte d'Ivoire's, beans move east; when the reverse, west; Nigerian beans flow towards whichever neighbour pays more, and some Ivorian beans reach Ghana to be sold as Grade I. None of this is published. It is inferred from price spreads, from arrivals that do not match pod counts, and from asking people who handle the bags — which is what the field panel does.