Under-pressure cocoa prices staged some recovery after industry data showed European consumption of the bean declining sharply, but less drastically than some investors had feared.

European cocoa processors ground 316,676 tonnes of the bean in the July-to-September period, a 16.2% slide year on year, and the lowest figure for the quarter since 2005 the European Cocoa Association said.

However, the decline was at the lower end of the range of 15-20% that analysts were expecting, and reflected a sharp improvement on the 292,551 tonnes ground in the April-to June quarter, representing the biggest decline on records going back 12 years.

"You can't call the data promising but it was at least not as dismal as some had prepared for," a London trader told Agrimoney.com.

"People have got used to setbacks on the demand front."

Prices recover - for now

Cocoa futures for December added 1.4% to £1,535 a tonne in morning deals in London, recovering from a near-three-month low set in the last session, when prices were 13% below an early-September high.

However, Commerzbank analysts cautioned against expectations of the rebound in prices extending too far.

"The economic crisis in the eurozone is leaving a noticeable mark on cocoa demand," the bank said.

With Europe such an important area for cocoa consumer, "global cocoa demand is hardly likely to increase unless there is a recovery in Europe.

"We see only limited upside potential for cocoa prices."

Running down stocks

The volume decline reflects in part a one-off hit as processors reverse last year's shift in grinding activity to Europe from Ivory Coast, the top cocoa bean producer, which was rocked in 2011 by civil unrest.

However, the drop has been accelerated by stagnant chocolate demand in Europe, which has dented margins and prompted processors, besides mothballing some capacity, to run down hefty inventories of cocoa products rather than needing to grind further beans.

Data released independently by BDSI, the German confectionery producers' group, showed the country's grind falling by 30% to 86,708 tonnes in the latest quarter.

The European Cocoa Association data is drawn from the 15 original EU countries, including Germany, plus Switzerland, from processors including Archer Daniels Midland, Barry Callebaut and Delfi.