Cocoa is an important agricultural commodity used in the manufacture of chocolate bars, candy, and other products. As the global population has grown, so has the demand for cocoa-made products. Most of this demand has come from Asian countries such as China. Their middle class has grown leading to more demand for chocolate bars and other products.

The growth in demand has led to an increase in supply from cocoa farmers. The farmers have acquired machinery and better-growing seeds that have made it better to support yields. This growth led the price of cocoa beans to fall from $3000 to $1900 per tonne in 2017.

The top producers of cocoa are Ivory Coast and Ghana, who account for more than 60% of the global production. Other large producers are in Europe and in the United States. The former countries are known to plant, harvest, and export cocoa beans instead of grinding. Since most of the value of cocoa is gained after processing, these companies earn less than 5.5% of the entire $100 billion market.

According to Bloomberg, the two countries are now in the process of changing this. They will coordinate on the planning of the planting of the cocoa beans, processing of the beans, to storage of the cocoa beans. As such, the biggest producers will now be at a better position to control its pricing. In other words, the biggest cocoa producers are planning to create an OPEC of the cocoa beans.

Cocoa is the best performing commodity this year. It has gained by 23%. From January to mid-May, the price had gone up by more than 50%.

It is currently trading at $2350, which is the lowest level since 3rd March. The price is in line with the 100-day moving average and lower than the 50-day moving average. Its commodities channel index is currently at the lowest level since December. This means that the price of cocoa will likely move higher, especially if the plan by the largest producers work out.