Cocoa crumbles

Cocoa fell to the lowest in more than a month in London after bean processing in Europe, the biggest consuming region, trailed market expectations in the second quarter.

Grinding in Europe dropped 0.7% in the three months ended June 30 from a year earlier, the Brussels-based European Cocoa Association said on its website today. That compares with a 2.5% increase expected in a Bloomberg News survey of nine traders, brokers and grinders published on July 7.

“There’s no doubt that, with consensus yesterday 2 to 3% higher, to find a number that’s actually down is disappointing,” Jonathan Parkman, co-head of agriculture at Marex Spectron in London, said by phone today. “It could be that cocoa has just been ground in a different part of the world.”

Cocoa (NYBOT:CCN14) for delivery in September fell 0.3% to 1,906 pounds ($3,262) a metric ton by 1:46 p.m. on NYSE Liffe in London. Earlier prices dropped as much as 0.8% to 1,897 pounds a ton, the lowest since May 27. Futures gained 10% this year on concerns global cocoa production will continue to lag behind demand.

Bean processing in Europe was 307,938 tons in the second quarter, compared with 310,188 tons the previous year, ECA data showed. In Germany, grindings increased 9.1% in the period to 82,475 tons, the Bonn-based Association of the German Confectionery Industry said in a report today.

“There’s slow growth in Europe, Daniel V. Diez, vice chairman at General Cocoa Company, said in a telephone interview last week. ‘‘Investments from the big players are in origin countries, not in the major consuming markets.’’
 

Cocoa Processing
 

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

Barry Callebaut AG, the top cocoa processor and biggest maker of bulk chocolate , said in an earnings statement last week that the cocoa powder market was ‘‘challenging.’’ Euromar Commodities GmbH, a unit of processor Transmar Group, said last month it reduced output at its German factory because it can’t find buyers for its powder even as demand for butter is strong.

Cocoa for September delivery declined as much as 1% to $3,055 a ton on ICE Futures U.S. in New York, the lowest in two weeks. Processing in North America probably rose 2.2% in the second quarter, according to the average of seven analysts surveyed by Bloomberg News. The National Confectioners Association will release figures on July 17.

Raw sugar (NYBOT:SBN14) for delivery in October dropped 0.8% to 17.28 cents a pound on ICE Futures U.S. in New York. Unica will release figures on Brazil’s center-south harvest in the second half of June later today.

White, or refined, sugar for the same month delivery fell 0.7% to $459.10 a ton on NYSE Liffe.

Robusta coffee (NYBOT:KCN14) for September delivery rose 0.6% to $2,068 a ton in London. Arabica coffee futures for the same month delivery fell 0.6% to $1.718 a pound in New York.

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