The commodity cocoa, refers to cocoa beans, which are the dried seeds from the, Theobroma Cacao, or cocoa tree. The tree is native to the Americas, specifically the Southern Hemisphere, and has been a major part of the area’s history, though now the vast majority of the trees exist in West Africa. In fact, cocoa beans were used as a common currency in many areas prior to the Spanish conquest. Now, cocoa is used all over the world to create chocolate, and other products such as cocoa butter. Many consume cocoa beans because of the benefits associated with them, as they are thought to have positive effects on cardiovascular health among other things. As an investment, cocoa has become a popular commodity for investors looking to cash in on the sweet gains it can provide [for more cocoa news and analysis subscribe to our free newsletter].
Investors have long been intrigued with cocoa, as this sweet commodity has surely made a name for itself in the financial universe. Although its uses are limited, the market demand for this resource is quite massive. Cocoa is primarily used in the production of chocolate, but can also be used to make cocoa butter, which is used in a number of pharmaceutical drugs. Additionally, cocoa makes an appearance in cosmetics, including various kinds of makeup, lotions, and even soap.
There may be no words to adequately describe what a chocoholic feels as he or she indulges their taste for anything and everything chocolate. Now, thanks to advancements made in the investment markets, chocoholics and anyone else can make money from the global craze for chocolate through an investment in cocoa, the main ingredient in chocolate.
This year saw a surge in popularity for commodity investing. As the years have passed, investors have seen the benefits of investing in the risky, but lucrative asset class. Commodities provide a protection against inflation as well as a low correlation to equities. One of the biggest problems within the industry was the lack of options available to investors just a few years ago. It used to be that only those with a complex futures account were able to add these securities to their portfolios. Now, there are hundreds of products to help even the smallest investor gain access to their favorite commodity investment. Below, we outline all of the commodity exchange traded products that hit the market this year [see also 12 High-Yielding Commodities For 2012].