The ICCO’s Seminar on Cocoa Terminal Markets in mid-June brought representatives of a number of ICCO member governments up to date with the latest developments on the commodity futures markets.

The Seminar, which took place at the ICCO’s London headquarters from 13 to 16 June, briefed policy makers and their advisors on the important role that the terminal markets play in the world cocoa economy, by shifting price risk through hedging, by providing information for storage decisions and by acting as centres for the collection and dissemination of price information.

The Seminar took place against the background of events in July 2010, when London’s NYSE Liffe cocoa futures market was the subject of much press interest, due to a large position taken by a single market player. The incident raised concerns about the transparency, integrity and efficiency of terminal markets, and led to calls for stronger regulation of that market by the European and UK financial authorities.

In order to assist delegates to understand these market developments, the Seminar reviewed the various types of contractual arrangements used to trade cocoa, looking in-depth at futures contracts and their trading, before examining the competitive structure of the markets themselves, the role of brokers and other professionals in the markets.

ICCO Executive Director a.i., Dr Jean-Marc Anga, welcomed about 40 participants to the Seminar, which was conducted by the ICCO’s Econometrician Dr Michele Nardella and Economics and Statistics Director a.i. Laurent Pipitone. It also included presentations by speakers from both of the world’s major cocoa exchanges--Ian Dudden, Director of Commodity Derivatives at NYSE Liffe, as well as Thomas Farley, President and Chief Operating Officer of New York’s ICE Futures US—each of whom provided an insight into the functioning of their respective futures markets.

The Seminar also addressed the way fundamental factors affect futures prices, and taught delegates the importance of basis prices, spreads between different delivery months, and their connections with expected spot prices and storage costs, in order to illuminate the way the futures markets work.

The practicalities of using the futures markets, and of employing various hedging strategies to mitigate the impact of any decline in cocoa prices, comprised another section of the Seminar. Also included were a series of practical case studies, suggesting strategies for grower co-operatives, exporters and traders.

The Seminar concluded with a guided visit for the participants to the NYSE Liffe cocoa grading room in London, where they were hosted by Robin Dand, Lee Watson and Barry Readings of the Exchange.

Each participant was presented with a certificate at the conclusion of the four-day Seminar, and the positive reactions to the presentations were such that the Secretariat is seriously considering repeating the Seminar in the near future.

ICCO Secretariat

International Cocoa Organization
Westgate House
Ealing
London W5 1YY
United Kingdom

Tel:  +44 (0)20 8991 6000
Fax: +44 (0)20 8997 4372
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General Information

Further information on the ICCO, the cocoa market, statistics, meetings, or any other subject related to the world cocoa economy can be obtained by contacting the Information and Media Officer at This email address is being protected from spambots. You need JavaScript enabled to view it.