The cost of cocoa butter relative to the price of beans rose in Europe last week, according to three traders with direct knowledge of the sales.
The butter, which accounts for as much as 20 percent of the weight of a chocolate bar, trades at a ratio to cocoa futures on the NYSE Liffe exchange in London. The ratio was 1.46 to 1.52 last week, said the traders, who declined to be identified because they aren’t authorized to speak to the media. It was 1.35 to 1.4 the week before.
The butter ratio in Europe has been climbing since at least June 1 as processors used up stockpiles rather than grind more beans, according to data from Commodities Risk Analysis LC, a Bethlehem, Pennsylvania-based research company. Grinders started buying butter from stockpiles after prices fell for cocoa powder, another by-product of bean processing.
Cocoa processing in Europe fell 18 percent in the second quarter, according to the European Cocoa Association in Brussels. In North America, grindings dropped 9.8 percent in the same period, according to the National Confectioners Association in Washington.
Cocoa for December delivery gained 0.4 percent at 1,637 pounds ($2,569) a ton at 12:05 p.m. on NYSE Liffe in London.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.