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European Cocoa Grind Seen Rising on Higher Chocolate Demand

Published on Jul 7 2014 8:52 AM in Supply Chain

European Cocoa Grind Seen Rising on Higher Chocolate Demand

Cocoa processing in Europe probably rose in the second quarter following signs of more chocolate demand.

Grinding rose 2.5 per cent in the three months ended 30 June from a year earlier, according to the average estimate of nine traders, brokers and buyers surveyed by Bloomberg. Processing climbed 0.4 per cent in the first quarter, according to the European Cocoa Association. The Brussels-based group is scheduled to publish second quarter data on 10 July.

The price of cocoa butter rose last month to the highest since about 1985 while powder prices fell, according to KnowledgeCharts, a unit of Commodities Risk Analysis. Cocoa processing generates powder, used in ice cream and cookies, and butter, which accounts for as much as 20 per cent of a chocolate bar’s weight.

“You see the cocoa butter so high in price that everybody would like to grind more,” Javier Almela, chief purchasing officer at grinder Natra SA in Valencia, Spain, said by phone on 3 July. “Sellers need to compensate for the low price of powder.” Natra buys 35,000 tons to 40,000 tons of cocoa a year.

A 2.5 per cent increase in grinding would amount to 317,943 tons, the most for the second quarter since 2011, according to ECA data.

Cocoa prices rose 11 per cent in London this year to £1,924 ($3,298) a ton today.

Bloomberg News edited by ESM

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