rallied, following stronger-than-expected European first-quarter grind data –
although a leading broker cautioned against investors getting carried away.
grind, which is the volume of beans being processed into butter and powder,
fell by 1.6% year-on-year to 337,706 tonnes in the January-to-March period.
the weakest start to a year, in volume terms, since 2010.
However, the figure
beat analyst expectations for grind volumes to fall by 3-7%, undermined by
squeezed margins for processors
rallied on the news to one-month highs of $2,885 a tonne in New York, and
£1,976 a tonne in London, for May delivery.
The data would
appear to indicate a recovery in demand for cocoa products –the butter seen as
giving solid chocolate a "melt in the mouth" texture, and the powder
used largely in biscuits, ice-cream and drinks – and improved margins for
processors after a difficult period.
chocolate confectionery market shrank 1.5% in the September-to-February period,
according to analysis group Nielsen.
Parkman, of head of agriculture at London broker Marex Spectron, said: "It
would be folly to look at one are of the world's grinding and draw conclusions
about processing margins globally."
Cocoa is a
multinational industry, and grind demand in Europe could reflect international
dynamics, rather than a shift in consumer demand.
consumes what it grinds, and gets the top-up from Asia," said Mr Parkman.
Whispers on US demand
A clearer picture
will only emerge after the release of further quarterly cocoa grind reports,
with data on North America expected later on Thursday. A Reuters poll of
analysts showed that the data expected to show volumes at best flat year on
year and potentially down 5%.
whispers on the market today that the grind might be weaker than
consensus," Mr Parkman told Agrimoney.com.
On Wednesday the
Malaysian cocoa board announced that cocoa grinds were down 27.5% in the first
quarter of 2015, compared with the same period in 2014.
"We expect the
rest of the Asian grind to not be quite so poor, but also sharply down,"
said Mr Parkman.
London cocoa for
May stood at £1,964 a tonne in lunchtime deals, up 1.0% on the day, with New
York cocoa for May up 2.2% at $2,878 a tonne.