Price formation on the futures market and the physical market for cocoa
This project investigates the determinants of prices for soft commodity
cocoa on the futures market and for raw cocoa on the physical markets.
The project is structured in two integrated strands. In the first
project module, financial mathematical and econometric models based on
fundamental and stock market data will be extended by data-driven
modelling and evaluated with regard to their predictive power. The resulting models will be used to simulate different scenarios in order
to investigate the effects of fundamental- and exchange-based effects on
the cocoa production chain under changing regulatory and political
conditions.
The second strand of the project focuses on marketing structures and
price formation on the physical cocoa markets. Literature-based mapping
of the production structures in Ghana and Côte d'Ivoire, two major cocoa
producers, will be verified and supplemented by qualitative and
quantitative case studies in these countries to establish the contextual background for subsequent data analysis. This is complemented by a
quasi-experimental observational study among cocoa farmers, which makes it possible to examine the determinants of producer prices and the
socio-economic context of farming operations.
The synthesis of these research results provides a comprehensive picture
of the different pricing and price formation mechanisms on the cocoa
futures market and the physical cocoa markets, thereby allowing
fundamental questions to be answered on the suitability of the cocoa
futures exchange for the risk management of relevant actors in Germany and in the producer countries.
Publications
Project start:
01. January 2019
Project end:
31. March 2022
Project management:
Prof. Colin Vance Ph.D.,
Dr. Gunther Bensch
Project staff:
Kathrin Kaestner
Project partners:
Jacobs University Bremen
Funding:
Bundesministerium für Ernährung und Landwirtschaft