Bloomberg News

European Cocoa Processing Probably Dropped 2.4% in First Quarter

April 09, 2013

Cocoa processing in Europe, the world’s biggest consuming region, probably dropped for a fifth consecutive quarter after some factories stopped reporting while others operated at slower rates.

The so-called grind, an indication of demand, was 2.4 percent lower in the first quarter than a year earlier, according to the mean estimate of 14 traders, brokers and processors surveyed by Bloomberg. Processing fell 6.2 percent in the previous three months, data from the European Cocoa Association showed. The Brussels-based industry group will report figures for the first quarter on April 17. Europe accounts for about 40 percent of the world’s global cocoa bean processing, the International Cocoa Organization says.

Processing in the continent fell 16 percent in the third quarter and 18 percent in the second quarter last year as some factories slowed bean grinding because of lower margins. Fuchs & Hoffmann GmbH, a grinder in Germany, stopped reporting its figures last year. The company is still not providing its numbers, Managing Director Olaf Reichardt said yesterday. He declined to provide the factory’s grinding capacity.

“The ECA survey probably will overstate the decline,” Steven Haws, founder of Commodities Risk Analysis in Bethlehem, Pennsylvania, said by e-mail yesterday. “January to March 2012 was a strong quarter that preceded the factory closures still with us. Further, several factories stopped reporting.”

World Grind

Cocoa bean processing in the first three months of 2012 was 353,311 metric tons, ECA data showed. A 2.4 percent decline would imply that about 344,832 tons were processed in the first quarter this year. Survey responses varied from a gain of 6.3 percent to a drop of 8 percent. World cocoa grinding will rise 1.5 percent to about 4 million tons in the 2012-13 season that started in October, the ICCO estimates.

Global chocolate confectionary sales grew 1.5 percent from September through January after being unchanged in the year- earlier period, according to earnings presentations of Barry Callebaut AG (BARN), which supplies chocolate to candy makers.

Sales in Western Europe climbed 1.4 percent in September through January after falling 2.9 percent in the same period a year earlier, the presentations of the Zurich-based company show. In Eastern Europe, sales climbed 3.4 percent compared with 5.6 percent a year earlier, the presentations showed.

Cocoa for July delivery fell 0.2 percent to 1,468 pounds ($2,245) a ton by 9:43 a.m. 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.


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