Cocoa grinding in Asia probably dropped 11 per cent in the second quarter as surging prices hurt demand for the beans used in making chocolates.
Processing fell to 143,500 metric tons in the three months ended June 30 from 161,805 tons a year earlier, the median of 10 analyst and trader estimates compiled by Bloomberg showed. Forecasts ranged from declines of 8 per cent to 15 per cent. The Cocoa Association of Asia will release data on Friday, with figures from Indonesia, Malaysia and Singapore.
Prices climbed 13 per cent in New York this year, after three annual increases, amid concern dry weather may cut supplies from Ghana, the biggest producer after Ivory Coast. The gains are in contrast to losses in most commodities including sugar and coffee and may hurt chocolate makers’ margins. Chocolate confectionery sales fell 2.1 per cent worldwide from September to April and declined 1.5 per cent in Asia, Barry Callebaut AG said 8 July, citing data from Nielsen.
“Cocoa was the last man standing in the commodity space,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “The high price level will dampen demand,” he said by e-mail on Wednesday.
Hershey Co., the maker of Reese’s, Twizzlers and Almond Joy candies, cut its profit forecast last month after struggling with slowing growth in China. Grinding generates butter, which accounts for about 20 per cent of a chocolate bar’s weight, and powder, used in ice cream and cookies.
Bloomberg News, edited by ESM
