The rising demand from developing economies surprised cocoa traders, who largerly expected prices to taper off after the Ivory Coast, the largest producer of cocoa, revealed a record crop last month. Cargill Inc., one of the world’s biggest cocoa processors, estimates that global demand could outstrip supply by 100,000 to 200,000 metric tons for the crop year starting Oct. 1.

The cocoa ETNs track cocoa futures contracts. Currently, the cocoa futures market is slightly backwardated, according to Trading Charts. Exchange traded products benefit from backwardation – a state where near-month contracts are priced higher than later-dated contracts – since the investments would roll contracts at a profit. However, CHOC tracks a number of contracts with varying expiration dates, which could lessen the benefits of a backwardated market.

iPath DJ-UBS Cocoa TR Sub-Index ETN

For more information on the chocolate market, visit our cocoa category.